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Many Drug Cartels Have the McDonald's Touch

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McDonald’s Restaurants, like some other fast food chains we’ve mentioned, are frequently hot beds of crime. A quick news search finds stories of fights, robberies and an occasional pickup truck shot through the front window, all over the past few days.

Well, apparently, McDonald’s isn’t just an easy target for criminals. According to a recent article from In Sight, a publication dedicated to researching organized crime in the Americas, it may be a source of inspiration as well.

The article puts forward the hypothesis that drug cartels, and specifically the Zetas, operate less like a hierarchical unit and more like a franchise. Cartels consist of huge networks of loosely connected nodes. Each node operates independently with the blessing, paid for in one way or another, of the overall cartel.

McDonald’s only operates about 15% of its restaurants and leaves the rest to independent contractors. Under In Sight’s theory, different gangs join up with the Zetas in a similar fashion because it is a “recognized quality brand name.”

Individual franchises can, by and large, determine their own activities, and many diversify their operations. For the cartels, this often means a move into kidnapping or extortion. For some McDonald’s, it means a move into the wedding industry.

There are a few problems with running a complicated franchise network. For starters, networks can be difficult to manage on a large scale. The Zetas have also seen issues with counterfeiters and copycats. It seems that there is very little risk for a criminal in pretending to be a Zeta. Of course, it’s important to remember that no one is immune to counterfeiters.

It is also important to remember that this franchise model is not exclusive to McDonald’s. Wendy’s, Burger King, Dunkin’ Donuts, and many others operate in the same fashion.

Still, fast food franchises provide an interesting and informative comparison to the drug cartels, although it is a little scary to think of legitimate and illegal businesses being so similar. Of course, there’s always the -- somewhat unfair -- idea that both sell an addictive and harmful product.
POSITION:  No positions in stocks mentioned.