Union membership among McDonald's George St and Great King St staff has dropped from 75% to just under 20% in the past month.
It followed a union protest outside the North Dunedin restaurant on May 12, in which a picketer was hit by a motorist in the drive-through.
The sharp decline prompted Unite South Island organiser Sharna Butcher and Auckland McDonald's employee Sean Bailey to spend this week in Dunedin.
They claimed employees were being bullied by senior colleagues to leave the union, or not to join.
Ms Butcher and Mr Bailey spoke to Dunedin McDonald's staff in a bid to recruit union members and better understand the recent membership decline.
They threatened to initiate legal action against franchise owners for any alleged breaches of the collective agreement between McDonald's and Unite as well as the Employment Relations Act.
A McDonald's George St employee, who asked to remain anonymous, told the Otago Daily Times she was made to feel uncomfortable about joining the union.
She said a McDonald's manager told her the union would take money from her and offer nothing in return.
There were no direct repercussions when she joined the union ''but I could tell they [her employers] were not happy about it'', she said.
McDonald's George St and Great King St franchise owner Justin Stonelake said the union's allegations were false and he believed staff were leaving the union for a combination of reasons.
He employed about 45 people at the George St McDonald's and about 55 at the Great King St restaurant.
Most worked part time.
Mr Stonelake said he was not surprised, but disappointed, by the union's claims.
''The [union] membership has been declining for more than a year, although I don't know the exact figures. I do know that over time our guys have got to know us and respect us as employers, and enjoy working with us.''
He said late last year the union changed its fee structure, which perhaps had a bearing on membership numbers.
Mr Stonelake said last month's protest at the Great King St restaurant may have also turned staff against the union.
''I know some of our employees who were there working that night were upset about what happened and did not like how the protest was run,'' he said.
The union had not raised any employment concerns with him, nor had staff, he said.
''We are very good employers, we look after our people and possibly that's why [union membership is declining]. Unite has not come to us about anything we have done wrong,'' Mr Stonelake said.
As a franchise owner, he had an ''open door policy'' for staff to raise any concerns.
''They can come to us any time. We do a lot for them. Isn't that what the union wants?''
He said unions were ''there for a good reason'' and his staff knew they were free to choose.
''We wouldn't stop anyone from doing it [joining] and let them know they've got that right.''
