McDonald's investors and analysts have been salivating over the equity in McDonald's real estate portfolio for decades.
Many think that McDonald's should follow the lead of other companies and spin off their
real estate assets into a real estate investment trust (REIT). Theoretically investors would
buy shares in the REIT thereby "monetizing" McDonald's unrecognized McDonald's real estate values.
During the November 2015 meeting with analysts McDonald's management told investors
they had wisely decided there would be no REIT and as it just wasn't a good fit for the
system. However, management did disclose that by the end of 2015 the company will have
sold four McDonald's locations for about $130 million. This may be the first time in history
that McDonald's has publicly discussed such transactions. I assume past transactions were
detailed in financial disclosures but the specifics were not broadcast.
When Ray Kroc and Harry Sonneborn developed their approach to McDonald's real estate
it was with the intention that there would be a McDonald's store at any specific location in perpetuity. They knew they couldn't build much of a chain if established stores were to come and go every 20 or 30 years. They either bought the property or secured leases with extensive options.
This strategy had an added benefit - franchises could be bought and sold with the buyer confident they were acquiring a long term business - creating more equity for the seller.
But a real estate formula that's worked well for 50 plus years is changing and Operators
should be aware of this evolution.
I won't try to predict what McDonald's management will do but I know how Wall Street analysts think and MCD shareholders are pretty predictable. Going forward analysts will
be expecting a certain amount of activity in McDonald's real estate sales. The substantial
sale prices of the four locations in 2015 will be the baseline. If management doesn't
produce a comparable annual line item analysts will ask "why not?".
Individual McDonald's shareholders will now drive-by their local McDonald's wondering if
that location shouldn't become a mixed-use office tower.
And the REIT issue will not disappear. When McDonald's share price has a downturn or is merely flat or dividends don't grow investors will again want to revisit the REIT idea. A management team and board of directors who are not getting results for shareholders
might be unable to resist.
This not meant to alarm all McDonald's Operators since it will not involve a lot of stores.
At least in the saturated USA McDonald's can't build total sales and income by shutting
down stores in large numbers. And, while many McDonald's properties have increased in value, there will only be a few where the resale value exceeds the future income stream
as a McDonald's restaurant. But, things are gradually changing.
2016 should be the year that McDonald's Operators become more involved and more know-ledgeable about the properties they are renting. Nothing could be worse for an Operator's equity than questions about a store's long term existence. Nothing could be worse for a store's cash flow than having the owners of an independent REIT making decisions about store rent and other occupancy costs.
Discussion?
Bloomberg reports on the November meeting HERE
.
December 31, 2015
December 30, 2015
December 29, 2015
December 28, 2015
Subway's Franchisees - "Stop the Discounting"
As for those "Five Dollar Footlong" ads, Mr. Carroll said the marketing at one time
"made that offer so amazingly attractive: I'm getting an $8 sandwhich for $5." But,
he added, "after a while you convince consumers that it's really only a $5 sandwich
and so that's really what it's worth."
Behind Subway's New Post-Jared Strategy - AdAge
.
"made that offer so amazingly attractive: I'm getting an $8 sandwhich for $5." But,
he added, "after a while you convince consumers that it's really only a $5 sandwich
and so that's really what it's worth."
Behind Subway's New Post-Jared Strategy - AdAge
.
December 24, 2015
Delivery Still Hot Topic
party in-between a franchisee and their customer.
Sounds like lots of opportunities for finger pointing.
Delivery was the buzzword of the year for restaurants in 2015
.
December 23, 2015
December 22, 2015
December 21, 2015
December 19, 2015
December 18, 2015
December 17, 2015
December 15, 2015
December 14, 2015
December 12, 2015
December 10, 2015
December 8, 2015
McDonald''s All-Day Breakfast Is Luring in Customers ?
At this point in time all this study shows is that million$ in advertising expenditures
can change consumer behaviors - temporarily.
McDonald''s All-Day Breakfast Is Luring in Customers, Study Finds - NASDAQ.com
.
can change consumer behaviors - temporarily.
McDonald''s All-Day Breakfast Is Luring in Customers, Study Finds - NASDAQ.com
.
December 7, 2015
Chipotle Mexican Grill to Tighten Food Safety Standards
I've always considered McDonald's to be the world's safest place to eat because of the
relatively small number of closely controlled suppliers. The idea of a large restaurant
chain "sourcing locally" sounded risky - and for Chipotle it has been.
In addition, Chipotle does not have an army of locally based franchisees helping to keep
an eye on the suppliers, it all has to be done from the corporate office(s).
Chipotle Mexican Grill to tighten food safety standards for produce
.
relatively small number of closely controlled suppliers. The idea of a large restaurant
chain "sourcing locally" sounded risky - and for Chipotle it has been.
In addition, Chipotle does not have an army of locally based franchisees helping to keep
an eye on the suppliers, it all has to be done from the corporate office(s).
.
December 4, 2015
December 3, 2015
November 24, 2015
November 23, 2015
The Founder - The Ray Kroc Story
While still a year from its release Ray Kroc's bio-pic will surely be another
exaggerated, antibusiness Hollywood product. But, McDonald's veterans might
be interested in which actors are playing important figures in McDonald's history.
The Founder (2016) - Full Cast & Crew - IMDb
.
exaggerated, antibusiness Hollywood product. But, McDonald's veterans might
be interested in which actors are playing important figures in McDonald's history.
The Founder (2016) - Full Cast & Crew - IMDb
.
November 19, 2015
November 17, 2015
Said It Before and Will Say It Again ...
... McDonald's should buy CKE Restaurants just so they could make Andy the CEO of the combined company.
Andy Puzder on minimum wage, GOP debate - Fox
McDonald's Operators Approved ‘McPick 2′ ?
For the first time in McDonald's history Oak Brook is eager to publicly discuss internal
Operator "votes". Is this because of Operator survey results and other comments by
current and former Operators?
‘McPick 2′: McDonald’s new deal to replace Dollar Menu - AP
.
Operator "votes". Is this because of Operator survey results and other comments by
current and former Operators?
‘McPick 2′: McDonald’s new deal to replace Dollar Menu - AP
.
November 15, 2015
November 13, 2015
November 11, 2015
McDonald's Analyst's Day
The dust from Tuesday's Analyst's Day has settled so for those McDonald's Operators interested in knowing more about management's plans for the future of the company ...
The take from NRN is HERE
Crain's Chicago Business reports HERE
Yahoo Finance recaps what the analysts are saying HERE
A replay of the webcast is HERE
The Q&A with the analysts is always the most interesting part of the webcast.
The take from NRN is HERE
Crain's Chicago Business reports HERE
Yahoo Finance recaps what the analysts are saying HERE
A replay of the webcast is HERE
The Q&A with the analysts is always the most interesting part of the webcast.
November 10, 2015
McREIT or not to McREIT
McDonald's Operators may hear some discussion from today's analyst meeting about
doing something with the McDonald's real estate empire in the form of a Real Estate Investment Trust. While having a third party influencing the real estate side of the
franchise relationship would be disastrous for McDonald's Operators - not to worry.
The ongoing activities of the supplier owned REIT - System Capital Corporation - will
prevent any real transparency into McDonald's real estate and the topic will fade
away as it always has.
.
doing something with the McDonald's real estate empire in the form of a Real Estate Investment Trust. While having a third party influencing the real estate side of the
franchise relationship would be disastrous for McDonald's Operators - not to worry.
The ongoing activities of the supplier owned REIT - System Capital Corporation - will
prevent any real transparency into McDonald's real estate and the topic will fade
away as it always has.
.
November 7, 2015
McDonald's Is Poised to Rule Fast Food Again
Much of this is a rehash of survey comments but it's always cute when a PR person
speaks for the entire Operator community from her cubicle in Oak Brook.
"We’re working to turn around our business with the support of our 3,100 independent
franchisees, who are excited about sales drivers like all-day breakfast (which they
overwhelmingly passed in a strong majority vote)," McDonald's spokeswoman Heidi
Barker said. "We understand that they are reassured by our willingness to co-invest in
future growth drivers."
Edward Jones analyst Jack Russo says: "There is change taking place and he franchisees
don’t like that," Russo said. "McDonald’s is asking them to reinvest back in their
business, in wages and labor, and they are not happy about that. But change had to
happen at the company and they’ll be happy again at some point."
McDonald's Is Poised to Rule Fast Food Again - Business Insider
.
speaks for the entire Operator community from her cubicle in Oak Brook.
"We’re working to turn around our business with the support of our 3,100 independent
franchisees, who are excited about sales drivers like all-day breakfast (which they
overwhelmingly passed in a strong majority vote)," McDonald's spokeswoman Heidi
Barker said. "We understand that they are reassured by our willingness to co-invest in
future growth drivers."
Edward Jones analyst Jack Russo says: "There is change taking place and he franchisees
don’t like that," Russo said. "McDonald’s is asking them to reinvest back in their
business, in wages and labor, and they are not happy about that. But change had to
happen at the company and they’ll be happy again at some point."
McDonald's Is Poised to Rule Fast Food Again - Business Insider
.
November 6, 2015
People Still Like Fast Food
Oak Brook has convinced the press that the McDonald's menu has been simplified.
Says Jonathan Maze at NRN
.
Says Jonathan Maze at NRN
.
November 5, 2015
Higher Prices At Wendy's Bring Sales Increases
"The company explained that franchisees were “more aggressive” in menu
pricing, suggesting that the comp increase wasn’t the result of more customers
coming to Wendy’s."
Wendy’s: Check Rise; Customer Traffic Dip - βurgerβusiness
.
pricing, suggesting that the comp increase wasn’t the result of more customers
coming to Wendy’s."
Wendy’s: Check Rise; Customer Traffic Dip - βurgerβusiness
.
November 4, 2015
The Roller Coaster Ride at Famous Dave's
At less than 200 locations Famous Dave's is no threat to anyone but McDonald's
veterans will be interested in former McDonald's guy Ed Rensi's involvement.
How investors took Famous Dave's for a ride - NRN
.
veterans will be interested in former McDonald's guy Ed Rensi's involvement.
How investors took Famous Dave's for a ride - NRN
.
November 3, 2015
There's Nothing Fast About Fast-Casual Restaurants
I've made more than my usual number of visits to "fast-casual" restaurants this fall.
If one listens to the business media you'd think that Americans were flocking to
Five Guys, Chipotle, and other non-QSR restaurants by the millions leaving
McDonald's and Burger King locations vacant.
Maybe there's some of that happening if only because, as compared to a decade ago,
there are a lot more fast-casuals out there. But it appears that fast casuals have put
a huge limitation on themselves - the service and wait times are atrocious.
I submit there are only a limited number of customers who will stand around waiting
forever for their food. This leaves a huge competitive advantage for traditional QSRs
because there are millions more customers who will forgo slow food for a quick grab
and go in the drive-thru or at the counter.
Any QSR brand that thinks they can drag those drive-thru customers inside to stand
around waiting for ten minutes after ordering does not understand their customers.
The felony dumb statement of 2015 was uttered from Oak Brook IL when a McDonald's spokesperson said, about Create Your Taste, "If they know we're making it especially
for them people don't mind waiting".
There are a few such customers out there but not enough to justify destroying a
restaurant system by being a copycat.
.
November 2, 2015
November 1, 2015
Reporter Going to McDonald's Instead of Starbucks
Another good argument for Dual-Point:
I started going to McDonald's instead of Starbucks for my coffee
.
I started going to McDonald's instead of Starbucks for my coffee
.
October 28, 2015
October 26, 2015
October 24, 2015
Best Case Ever For Secret Co-Op Ballots
I've always resisted postings and comments on this website that discuss upcoming
promotions and marketing plans assuming that's proprietary information and discussing
it here might give competitors some advantage. But, since Nation's Restaurant News and Crain's have already reported on the "Pick 2"idea it's out of the bag.
In that light, I received mail from a McDonald's Operator asking that we try to generate
some discussion about "Pick 2" on this website. While I can't republish the entire E-mail
but will kick things off by posting bullet points from the Operator E-mail.
_______________________________________________________________________
* Please focus your blog on this Pick 2 plan that is terrible for the O/Os.
* I have spoken to a lot of O/Os who are afraid to speak up. I am not sure of what they are afraid. Does anyone want another restaurant at this point?
* Regardless, this OPNAD plan, overall, is terrible and will lead us back down the dollar
rabbit hole.
* NRN has an article about it right now, but O/Os are voting.
* It is crazy on who is voting yes and no.
* Anything we can do to kill this terrible plan is a first start.
* I can’t believe that McDonald’s wants to run it this way, but more importantly, why would you (as an O/O) not see it as your own small business.
* Why worry over what McDonald’s thinks? We are the ones up against tremendous debts (due to McDonald’s) and meeting payroll.
* O/Os need all the votes they can get. They need to know that a lot of Co-Ops have failed
this terrible plan, but not enough.
.
promotions and marketing plans assuming that's proprietary information and discussing
it here might give competitors some advantage. But, since Nation's Restaurant News and Crain's have already reported on the "Pick 2"idea it's out of the bag.
In that light, I received mail from a McDonald's Operator asking that we try to generate
some discussion about "Pick 2" on this website. While I can't republish the entire E-mail
but will kick things off by posting bullet points from the Operator E-mail.
_______________________________________________________________________
* Please focus your blog on this Pick 2 plan that is terrible for the O/Os.
* I have spoken to a lot of O/Os who are afraid to speak up. I am not sure of what they are afraid. Does anyone want another restaurant at this point?
* Regardless, this OPNAD plan, overall, is terrible and will lead us back down the dollar
rabbit hole.
* NRN has an article about it right now, but O/Os are voting.
* It is crazy on who is voting yes and no.
* Anything we can do to kill this terrible plan is a first start.
* I can’t believe that McDonald’s wants to run it this way, but more importantly, why would you (as an O/O) not see it as your own small business.
* Why worry over what McDonald’s thinks? We are the ones up against tremendous debts (due to McDonald’s) and meeting payroll.
* O/Os need all the votes they can get. They need to know that a lot of Co-Ops have failed
this terrible plan, but not enough.
.
October 23, 2015
October 21, 2015
Sonic Says - ADB? - Not So Fast
Breakfast sales outside the morning daypart are “not material to our
business at all,” Clifford Hudson, Sonic’s CEO, said in a conference
call with analysts.
Nation's Restaurant News Reports
.
business at all,” Clifford Hudson, Sonic’s CEO, said in a conference
call with analysts.
Nation's Restaurant News Reports
.
October 20, 2015
Yum Brands to Spin Off China Business
This restructuring at YUM is already generating discussion about McDonald's doing
something with its real estate.
China Business - LA Times
.
something with its real estate.
China Business - LA Times
.
McFake Twitter Account on All Day Breakfast
Oak Brook has numerous fake social media accounts but the most amusing is on
Twitter with the handle "McD_Truth" who is trying to spin things for analysts.
With only a week under ADB's belt he is already claiming that:
ADB has increased the average check, lowered food cost by .50%, generated a
huge sales increase, and Operators are 95% behind ADB.
.
Twitter with the handle "McD_Truth" who is trying to spin things for analysts.
With only a week under ADB's belt he is already claiming that:
ADB has increased the average check, lowered food cost by .50%, generated a
huge sales increase, and Operators are 95% behind ADB.
.
Must McDonald's Always Be Politically Correct?
With all the challenges McDonald's faces - they have to waste resources on phony initiatives that will only raise operating costs.
McDonald's signs on for Obama's 'American Business Act on Climate Pledge'
.
October 16, 2015
October 15, 2015
NRN's Jonathan Maze on McDonald's Value
This is a great opportunity for McDonald's Operators to comment at the end of the article
or send Jonathan an E-mail.
By the way, Oak Brook has a bunch of "anonymous" people trolling the Internet
commenting on articles and posting fake tweets. Anyone who does not agree with the
Oak Brook party line is called a "hater". Is OPNAD paying for this activity?
For this purpose there's nothing wrong with creating your own identity.
Did shifting away from the Dollar Menu hurt McDonald's?
.
or send Jonathan an E-mail.
By the way, Oak Brook has a bunch of "anonymous" people trolling the Internet
commenting on articles and posting fake tweets. Anyone who does not agree with the
Oak Brook party line is called a "hater". Is OPNAD paying for this activity?
For this purpose there's nothing wrong with creating your own identity.
Did shifting away from the Dollar Menu hurt McDonald's?
.
October 14, 2015
Oak Brook Says McDonald's Is Fixed
Proud of the team! Breakfast finally pulls McDonald's out of its funk http://cnb.cx/1LtTpGF
.
October 13, 2015
Let McOpCo Test CYT
Comment of the week - so far.
CYT - "Also the cost of converting/remodeling our kitchens, the added labor needed, and
the increased complexity and food costs will make this a poison pill for all but the most
foolish operators to follow. Let McOpCo do it for 3 years FIRST."
Discussion is HERE
.
CYT - "Also the cost of converting/remodeling our kitchens, the added labor needed, and
the increased complexity and food costs will make this a poison pill for all but the most
foolish operators to follow. Let McOpCo do it for 3 years FIRST."
Discussion is HERE
.
October 12, 2015
October 9, 2015
October 8, 2015
October 6, 2015
October 5, 2015
Maybe Michelle Will Be On The McDonald's Board?
Most veterans of the Clinton White House went on to Wall Street or broadcasting.
It appears that many Obama administration types will end up in Oak Brook.
Robert Gibbs hires former White House crony
.
It appears that many Obama administration types will end up in Oak Brook.
Robert Gibbs hires former White House crony
.
Deborah Wahl Spills the Beans to AdAge
Some pretty good commercials here:
McDonald's U.S. CMO Discusses All Day Breakfast Effort - Advertising Age
.
McDonald's U.S. CMO Discusses All Day Breakfast Effort - Advertising Age
.
Great News For McDonald's and Burger King !
Wendy's is putting an accountant in as Chief Executive Officer.
We know that rarely works out well.
Wendy's CEO Emil Brolick to Hand Reins to Finance Chief
We know that rarely works out well.
Wendy's CEO Emil Brolick to Hand Reins to Finance Chief
October 3, 2015
Wal-Mart Raises Pay Rates, Then Has to Lay Off 450
"The cuts come as the world's largest retailer struggles to shore up its profit margins,
which have been weighed down by a $1 billion investment announced earlier this year
to increase wages for half a million store-level workers and other cost pressures. The
company's stock is down 26 percent so far this year."
Wal-Mart to cut hundreds of jobs at Arkansas headquarters
.
which have been weighed down by a $1 billion investment announced earlier this year
to increase wages for half a million store-level workers and other cost pressures. The
company's stock is down 26 percent so far this year."
Wal-Mart to cut hundreds of jobs at Arkansas headquarters
.
Why McDonald’s All-Day Breakfast Was Years in the Making
A website with a silly name buys the silly notion that McDonald's Operators made the
decision to serve breakfast all day - silly website.
From a website named "Eater"
.
decision to serve breakfast all day - silly website.
From a website named "Eater"
.
October 2, 2015
Burger King Marketing - Getting By On The Cheap
While OPNAD wastes a billion here and a billion there.
September 30, 2015
September 29, 2015
More on Mobile Payments
The press continues to discuss mobile pay and mobile order as though they are
the same thing. Most of their information comes from companies selling the apps
and technology. And those companies buy advertising in restaurant magazines.
Mobile payments continuing to grow in QSR - QSRWeb
.
the same thing. Most of their information comes from companies selling the apps
and technology. And those companies buy advertising in restaurant magazines.
Mobile payments continuing to grow in QSR - QSRWeb
.
September 28, 2015
CYT Dialogue
Before it goes too far down-screen McDonald's Operators should revisit the post titled
"On CYT", we've had some great Operator comments.
Or, go back to the post HERE
Or make a comment about CYT on this post .
.
"On CYT", we've had some great Operator comments.
Or, go back to the post HERE
Or make a comment about CYT on this post .
.
Wisdom From One of the Original McDonald's Operators
My first gig as a McDonald's store manager was with the partnership of Zien-Heller in Minneapolis. I didn't know much about the structure of the partnership except that they
had the rights to develop McDonald's in the City of Minneapolis and they controlled the
real estate. We knew we worked for both men but reported directly to Jim Zien, he was
in the restaurants frequently, Sim Heller occasionally.
One day Sim Heller made an unannounced visit to my restaurant and was especially
interested in a contractor who was tiling walls in the back of the kitchen, walls that had previously been painted. I was excited about the upgrade - him - not so much.
Sim wiped his hand across the 4x4 salt and pepper tiles and just said, "I hope Zien can
afford it".
Today's McDonald's Operators should emulate the very wise Sim Heller and when asked
to get involved in questionable initiatives respond with, "I hope Easterbrook can afford it".
had the rights to develop McDonald's in the City of Minneapolis and they controlled the
real estate. We knew we worked for both men but reported directly to Jim Zien, he was
in the restaurants frequently, Sim Heller occasionally.
One day Sim Heller made an unannounced visit to my restaurant and was especially
interested in a contractor who was tiling walls in the back of the kitchen, walls that had previously been painted. I was excited about the upgrade - him - not so much.
Sim wiped his hand across the 4x4 salt and pepper tiles and just said, "I hope Zien can
afford it".
Today's McDonald's Operators should emulate the very wise Sim Heller and when asked
to get involved in questionable initiatives respond with, "I hope Easterbrook can afford it".
September 25, 2015
September 24, 2015
What Would McDonald's Do Without a Strategy VP?
The WSJ describes McDonald's as "a company long known for preferring
internal candidates" ... well, history tells us that's not entirely true.
When McDonald's has a CEO who lacks an operations background, such as
Greenberg or Easterbrook, the CEO tries to flush the top management people
who have "ketchup in their veins" and bring in people who know nothing about
running a McDonald's or the McDonald's culture.
Anyone remember Alan Feldman?
McDonald's appoints strategy chief - Marketwatch
.
internal candidates" ... well, history tells us that's not entirely true.
When McDonald's has a CEO who lacks an operations background, such as
Greenberg or Easterbrook, the CEO tries to flush the top management people
who have "ketchup in their veins" and bring in people who know nothing about
running a McDonald's or the McDonald's culture.
Anyone remember Alan Feldman?
McDonald's appoints strategy chief - Marketwatch
.
September 22, 2015
Putting the New Starbucks App to the Test
Let's just say it didn't go particularly well.
Starbucks’ new order-ahead app review - Business Insider
.
Starbucks’ new order-ahead app review - Business Insider
.
McDonald's Cage-Free Egg Pledge
"McDonald's, the world's biggest restaurant chain, on Sept. 9 said it will switch to
cage-free eggs by 2025 in the United States and Canada. However, the company
does not plan to raise prices on its menu."
Oh yeah? ... Who says?
McDonald's cage-free egg pledge pressures farmers, squeezes supply - Yahoo
.
cage-free eggs by 2025 in the United States and Canada. However, the company
does not plan to raise prices on its menu."
Oh yeah? ... Who says?
McDonald's cage-free egg pledge pressures farmers, squeezes supply - Yahoo
.
On CYT - Seeking Your Comments
Any evidence there is an actual business case for Create Your Taste.
What are the hard numbers for remodeling, equipment, and implementation?
What are CYT's increased operating costs after implementation?
What is the actual (not dreamed about) increase in traffic?
Responses can be left as comments here or sent to adams at fegroup.com
.
September 17, 2015
McDonald's Looks Outside for New Chief Strategy Officer
Not too sure what a "Strategy Officer" is but I've got your strategy right here >
Get serious about simplifying the menu and restaurant operation so you can serve more customers!
Julie Jargon from Dow Jones reports
.
Get serious about simplifying the menu and restaurant operation so you can serve more customers!
Julie Jargon from Dow Jones reports
.
September 16, 2015
Good For Both McDonald's Operators and Oak Brook
Good news for McDonald's Operators since activist investors want to fiddle with
the McDonald's franchise business model.
Good news for Oak Brook since it would be a PR disaster if investors were allowed
to examine the McDonald's real estate portfolio and the secret REIT(s) that have
been created over the years.
IRS questions tax-free real estate spinoffs; could affect restaurants - NRN
.
the McDonald's franchise business model.
Good news for Oak Brook since it would be a PR disaster if investors were allowed
to examine the McDonald's real estate portfolio and the secret REIT(s) that have
been created over the years.
IRS questions tax-free real estate spinoffs; could affect restaurants - NRN
.
McRevolt: The Frustrating Life of the McDonald’s Franchisee
McDonald’s Operators are probably weary of negative press concerning the brand
but this Bloomberg article tells the story of an actual Operator’s career - Al Jarvis -
former Michigan Operator.
I ribbed the reporter for quoting a college professor who likely knows nothing about
the real business world and sent him this scene from a Rodney Dangerfield movie:
Back To School
He sent me back this scene from a Woody Allen movie:
Annie Hall
Bryan Gruley and Leslie Patton report for Bloomberg
.
but this Bloomberg article tells the story of an actual Operator’s career - Al Jarvis -
former Michigan Operator.
I ribbed the reporter for quoting a college professor who likely knows nothing about
the real business world and sent him this scene from a Rodney Dangerfield movie:
Back To School
He sent me back this scene from a Woody Allen movie:
Annie Hall
Bryan Gruley and Leslie Patton report for Bloomberg
.
September 15, 2015
Taco Bell to Open Upscale ‘Cantina’ Restaurants
As Taco Bell tries to go upscale to
compete with Chipotle will they be
silly enough to try to sell "premium" alongside their $1.00 offerings?
Wall Street Journal reports
Taco Bell press release
September 14, 2015
Andy Puzder on Minimum Wage
make Andy CEO of the entire new company.
Minimum wage jobs give people opportunities to climb ladder of success. However, $15 minimum wage is already crushing jobs and dreams.
.
Fast Casual Consumers Want Food Quality
Note that only five percent of customers were concerned about "Gluten-Fee".
Fast Casual Consumers Want Food Quality - QSR magazine
.
Fast Casual Consumers Want Food Quality - QSR magazine
.
September 12, 2015
September 10, 2015
September 8, 2015
September 6, 2015
September 4, 2015
Why Launch Breakfast Now?
ally, it would have been a better plan to launch breakfast all day in January instead of launching at the beginning of one of busiest periods of the year.
There is an explanation - Oak Brook management needs good news NOW - and can't wait for next year.
Launching in early October gives them something new to talk about on the October 22nd conference call with Wall Street analysts. That will then carry them through their Oak Brook meeting with analysts in November. Then things go quiet until the January 21st conference call discussing Q4 2015 with analysts.
During the first weeks of October analysts and reporters will wander through McDonald's restaurants observing people eating breakfast at all hours. Of course many of the menu
items being consumed will be obtained for free by way of coupons (print or digital) paid for
by McDonald's Operators. MCD watchers won't know that and will be impressed with
what they see.
So there will be something exciting to discuss on the late October call and chances are good
that results for the fourth quarter will please shareholders when announced in January because:
* The massive amount of advertising against breakfast.
* National and local couponing discounting efforts.
* Sales in the USA went negative in the fourth quarter of 2013 so there's a good chance that
"lapping" these two years of soft sales will produce some positive results for Q4 2015.
The more sophisticated analysts will understand this lapping but some won't and reporters definitely won't write about it so in late January there may be headlines proclaiming that McDonald's USA has been "turned around".
And, since Oak Brook no longer releases monthly sales results this perception could give management cover through the spring conference calls and the 2015 shareholders meeting.
As the T-shirt says, "The time is now" - no matter what happens in the restaurants.
.
September 3, 2015
National Labor Relations Board Franchise Decision
A few have asked why there's been no discussion here about the NLRB ruling.
I have no good answer except the board's position on the franchisor/franchisee
relationship is so far from reality it's difficult to discuss.
Keep in mind, this isn't about McDonald's, it's about all franchised business. Like
minimum wage increases such rules and laws won't just apply to quick service
resaurants but would impact muffler shops and haircut chains. If left to stand this
would effectively put most franchise chains out of business. Since the corporate
side is the deep pocket they'd be responsible for everything that happens to a
franchisee's employees. Not even McDonald's could afford to pay that bill.
Under those conditions why would any company sell franchises? Given the chance
of having their business unionized, why would any person buy a franchise?
We can expect a battle royal in the courts and in congress and it's probably going to
happen very quickly. But this will actually be decided in the 2016 election.
Here's an interesting article sent in by a McDonald's Operator:
How to fix regulation without representation | TheHill
Here's an excellent opinion piece on the ruling:
How This New Government Ruling Destroys the Franchise Business Model
.
I have no good answer except the board's position on the franchisor/franchisee
relationship is so far from reality it's difficult to discuss.
Keep in mind, this isn't about McDonald's, it's about all franchised business. Like
minimum wage increases such rules and laws won't just apply to quick service
resaurants but would impact muffler shops and haircut chains. If left to stand this
would effectively put most franchise chains out of business. Since the corporate
side is the deep pocket they'd be responsible for everything that happens to a
franchisee's employees. Not even McDonald's could afford to pay that bill.
Under those conditions why would any company sell franchises? Given the chance
of having their business unionized, why would any person buy a franchise?
We can expect a battle royal in the courts and in congress and it's probably going to
happen very quickly. But this will actually be decided in the 2016 election.
Here's an interesting article sent in by a McDonald's Operator:
How to fix regulation without representation | TheHill
Here's an excellent opinion piece on the ruling:
How This New Government Ruling Destroys the Franchise Business Model
.
September 2, 2015
September 1, 2015
August 31, 2015
RIP Max Cooper
Those who didn't know Max Cooper missed out on a big part of McDonald's history.
Birmingham McDonald's pioneer Max Cooper dead at 99
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Birmingham McDonald's pioneer Max Cooper dead at 99
.
August 26, 2015
August 25, 2015
August 24, 2015
Wal-Mart's Turnaround - Going to Take a Long Time
Maybe huge companies can't be turned around in a few quarters?
Wal-Mart's turnaround is going to take a long time - Business Insider:
.
Wal-Mart's turnaround is going to take a long time - Business Insider:
.
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