"Entrepreneurship is about disruption, changing the world order and doing things no one else thought possible."
--Shaun Rein, founder of the China Market Research Group, writing in Forbes
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3 comments:
Anonymous
said...
“I am perplexed by the degree of greed that has crept into corporate policy. A few years ago we were saddled with ERCCs (equipment related construction costs). This was a way for corporate to pass 39% of the electrical and plumbing costs of a new restaurant onto the operator.
Now we have a ‘brand review fee’ that is being added to the bill to insure that each remodeled restaurant has complied with corporate ‘branding’ elements. This, of course, is in addition to the outrageous architectural bills that are being charged, again to the operator. These are either charged direct or ‘hidden’ in the rent, the goal being to drive the rent into a higher percentage. One would think, with the success of the system in this very difficult economy that the tendency would be to not gouge the operator at every opportunity. Then there is the rebuild policy that is a ticking time bomb for every operator.
When it dawns on the operator base that they have worked all of these years developing the business, and a corporate bureaucrat announces that it is rebuild or you are history, there is no or very little residual value in the franchise to be sold, with rebuild costs exceeding $2 million. Corporate policy is killing the golden goose.”
There are lots of costs coming to the operators. New POS 6, major remodels, rebuild restaurants to get a new lease, etc. It has always been McDonald's policy to make owner/operators remodel McDonald’s-owned buildings but we are now down to spending most all of our equity (retirement)on these remodels
Mutual love is abundant during good times and I’ve experienced nothing to shed a negative light on future sales and profits. However, franchisee equity may be a hidden problem which won’t surface until or if you decide to leave the system.”
3 comments:
“I am perplexed by the degree of greed that has crept into corporate policy. A few years ago we
were saddled with ERCCs (equipment related construction costs). This was a way for corporate to
pass 39% of the electrical and plumbing costs of a new restaurant onto the operator.
Now we have a ‘brand review fee’ that is being added to the bill to insure that each remodeled restaurant has complied with corporate ‘branding’ elements. This, of course, is in addition to the outrageous architectural bills
that are being charged, again to the operator. These are either charged direct or ‘hidden’ in the rent, the goal being to drive the rent into a higher percentage. One would think, with the success of the system in this very difficult economy that the tendency would be to not gouge the operator at every
opportunity. Then there is the rebuild policy that is a ticking time bomb for every operator.
When it dawns on the operator base that they have worked all of these years developing the business, and a corporate bureaucrat announces that it is rebuild or you are history, there is no or very little residual value in the franchise to be sold, with rebuild costs exceeding $2 million. Corporate policy is killing the golden goose.”
There are lots of costs coming to the operators. New POS 6, major remodels, rebuild restaurants to
get a new lease, etc. It has always been McDonald's policy to make owner/operators remodel McDonald’s-owned buildings but we are now down to spending most all of our equity (retirement)on these remodels
Mutual love is abundant during good times and I’ve experienced nothing to shed a negative light on
future sales and profits. However, franchisee equity may be a hidden problem which won’t surface until or if you decide to leave the system.”
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