Bernstein's Strategic Decisions Conference Webcast
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May 29, 2015
May 28, 2015
McDonald’s to Stop Reporting Monthly Sales Data
This is a good move since the media and Wall Street make far too big a deal
out of monthly fluctuations due to trading day adjustments, weather, etc.
McDonald’s to Stop Reporting Monthly Sales Data
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out of monthly fluctuations due to trading day adjustments, weather, etc.
McDonald’s to Stop Reporting Monthly Sales Data
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MCD Management Publicly Discuss Ops Details
If a McDonald's Operator shared such information they'd be threatened
with the termination of their franchise.
McDonald's targets bun toasting and burger searing
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with the termination of their franchise.
McDonald's targets bun toasting and burger searing
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May 26, 2015
Burger King Overtakes Wendy's
The management of Burger King is getting a lot of accolades but what they've done
is to strip the Burger King system down to the bone. Short term the results will be
impressive - for a while. Long term they will have damaged the brand and BK will
drift back to its previous mediocrity.
Burger King overtakes Wendy's - Business Insider
.
is to strip the Burger King system down to the bone. Short term the results will be
impressive - for a while. Long term they will have damaged the brand and BK will
drift back to its previous mediocrity.
Burger King overtakes Wendy's - Business Insider
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May 21, 2015
CNBC on McDonald's Shareholder Meeting
This first video was recorded before today's shareholder meeting and the second
video was recorded after the meeting staring an interesting group of experts with wide
ranging opinions. They even included Mr. Wonderful from Shark Tank!
In both discussions concern is expressed for McDonald's franchisees. Ten or twelve
years ago that would have never come up on Wall Street . We can thank the Operators
who participate in our surveys for letting McDonald's investors know you're alive.
Taking McDonald's to the next level - CNBC
Interesting discussion by some "experts" - CNBC
.
video was recorded after the meeting staring an interesting group of experts with wide
ranging opinions. They even included Mr. Wonderful from Shark Tank!
In both discussions concern is expressed for McDonald's franchisees. Ten or twelve
years ago that would have never come up on Wall Street . We can thank the Operators
who participate in our surveys for letting McDonald's investors know you're alive.
Taking McDonald's to the next level - CNBC
Interesting discussion by some "experts" - CNBC
.
McDonald’s Must Win Over Franchisees
“If more of the corporate people would take their lunch hour and work the
line and
in the kitchen, we wouldn’t be in the position we’re in today,” says
Don Boodel,
McDonald’s Must Win Over Franchisees to Escape Slump - Bloomberg Business
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May 20, 2015
Union Thugs Helping Franchisees?
Most have heard about the Service Employees International Union's (SEIU) intrusion into
the franchise business by pretending to care about the interests of franchisees. The SEIU
has somehow involved itself in the proposed franchise legislation in California.
Make no mistake, the SEIU is not interested in the welfare of franchisees of any brand.
All the SEIU wants to do is organize and rip-off the employees of franchisees.
Therefore, Franchise Equity Group and this website will have nothing to do with any legislation, lobbying, or advocacy in which the SEIU or any branch of organized labor is
also a participant.
What might have been a good idea 100 years ago has devolved into the evil underbelly of
our economy and culture. The SEIU, organized labor, or their friends will find no support
here.
.
the franchise business by pretending to care about the interests of franchisees. The SEIU
has somehow involved itself in the proposed franchise legislation in California.
Make no mistake, the SEIU is not interested in the welfare of franchisees of any brand.
All the SEIU wants to do is organize and rip-off the employees of franchisees.
Therefore, Franchise Equity Group and this website will have nothing to do with any legislation, lobbying, or advocacy in which the SEIU or any branch of organized labor is
also a participant.
What might have been a good idea 100 years ago has devolved into the evil underbelly of
our economy and culture. The SEIU, organized labor, or their friends will find no support
here.
.
May 19, 2015
May 17, 2015
Could McDonald's USA Run Out of Operators?
There will be an interesting confluence of events over the next few years that could strain
the domestic Operator community.
To a McDonald‘s Operator attending a turnaround summit or worldwide convention it
probably seems like the number of Operators is infinite, but it’s not. And the number of
expandable Operators has been reduced due to financial pressures and will be further
reduced by corporate bullying.
In the near future expandable Operators will be needed for:
* Buying stores from Operators who are being forced out of the system.
* Buying McOpCos as part of the “refranchising” effort.
* Buying stores from Operators who are not being rewritten.
The rewrite issue could be a big deal. McDonald’s veterans will remember an initiative
from the late 1990s called the “Convenience Strategy”. In the 1970s and 1980s McDonald’s USA opened about 300 stores a year. In the early 1990s the number slowed to 160-170 a
year. To impress investors management tried to accelerate the growth of new stores by a
factor of three in years '96, '97, & '98.
Not all of those stores exist today, some were SPODs that have been closed as well as some conventional stores. And some have already been rewritten for other reasons. But, it’s easy
to assume that the number of rewrites up for consideration is going to double or triple in
the last half of this decade.
It’s also easy to assume that, due to expandability issues, there will more than the normal number of rewrite denials. In most cases a pending denial of rewrite causes the Operator to
sell the store before the end of the term (or they sell all of their stores).
And a potential shortage of McDonald's Operators won't be solved by recruiting new
Operators because McDonald's is in the business of reducing the number of Operators,
not adding new people.
There are some multiple Operators reading this and rubbing their hands together thinking “Goody, more stores for me”. Be careful what you wish for because that’s exactly what many Operators did 20 years ago when they heard about the upcoming "Convenience Strategy".
.
the domestic Operator community.
To a McDonald‘s Operator attending a turnaround summit or worldwide convention it
probably seems like the number of Operators is infinite, but it’s not. And the number of
expandable Operators has been reduced due to financial pressures and will be further
reduced by corporate bullying.
In the near future expandable Operators will be needed for:
* Buying stores from Operators who are being forced out of the system.
* Buying McOpCos as part of the “refranchising” effort.
* Buying stores from Operators who are not being rewritten.
The rewrite issue could be a big deal. McDonald’s veterans will remember an initiative
from the late 1990s called the “Convenience Strategy”. In the 1970s and 1980s McDonald’s USA opened about 300 stores a year. In the early 1990s the number slowed to 160-170 a
year. To impress investors management tried to accelerate the growth of new stores by a
factor of three in years '96, '97, & '98.
Not all of those stores exist today, some were SPODs that have been closed as well as some conventional stores. And some have already been rewritten for other reasons. But, it’s easy
to assume that the number of rewrites up for consideration is going to double or triple in
the last half of this decade.
It’s also easy to assume that, due to expandability issues, there will more than the normal number of rewrite denials. In most cases a pending denial of rewrite causes the Operator to
sell the store before the end of the term (or they sell all of their stores).
And a potential shortage of McDonald's Operators won't be solved by recruiting new
Operators because McDonald's is in the business of reducing the number of Operators,
not adding new people.
There are some multiple Operators reading this and rubbing their hands together thinking “Goody, more stores for me”. Be careful what you wish for because that’s exactly what many Operators did 20 years ago when they heard about the upcoming "Convenience Strategy".
.
May 16, 2015
Operator Comments
We've had some good discussion due to the "Op/Ed By Veteran McDonald's Operator" -
they are in two places:
Some are HERE
And then some are HERE
Please feel free to chime in!
.
they are in two places:
Some are HERE
And then some are HERE
Please feel free to chime in!
.
McDonald's Downgraded by Moody's
McDonald's credit rating continues to suffer as it borrows money to accelerate
shareholder returns. Moody's downgrade follows same by S&P and Fitch.
McDonald's Credit Downgraded by Moody's - 24/7 Wall St.
.
shareholder returns. Moody's downgrade follows same by S&P and Fitch.
McDonald's Credit Downgraded by Moody's - 24/7 Wall St.
.
McCashing In
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On May 13 McDonald's VP David Hoffmann sold 510 shares
of MCD for $9,755.
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May 15, 2015
May 13, 2015
Congratulations McDonald's Operators!
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You built HAVI into an industry powerhouse and they are now servicing your competitors.
Denny’s Corporation Selects HAVI Global Solutions as Supply Chain Systems Partner
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May 11, 2015
McDonald's Operator Op/Ed
We received a great, lengthy
comment from a McDonald's
Operator but due to format
restrictions on this site it had to
be broken up in three comments.
A full length version is now posted HERE
.
Breakfast All Day
So the fact that late-night comics joked about all day breakfast at McDonald's is
justification for the change?
.
justification for the change?
.
May 9, 2015
Related to the "Comment of the Week"
Analysts and reporters are asking, "How much leverage does McDonald's Corp. have
to force franchisees to go along with their reinvention plans".
My response is usually, "Very little".
Ten or fifteen years ago they had many levers to pull - but today - not so much. Really,
all Oak Brook has is bullying and threats. They don't have the money to pay for the
initiatives. They can't make every Operator unexpandable. Rewrites are an issue (more
on that later) but that's a long term problem and won't have much impact in the next
few years.
Terminate some franchises? Oh, they can send out nasty letters and make threats in
Operator reviews but that's private communication. Actually terminating a franchise
is a messy, public ordeal.
On one hand Wall Street wants franchisors to be able to boss franchisees around but
no investor wants to hear about a bunch of embarrassing litigation. It would illustrate management's incompetence and says bad things about the future of the brand.
.
to force franchisees to go along with their reinvention plans".
My response is usually, "Very little".
Ten or fifteen years ago they had many levers to pull - but today - not so much. Really,
all Oak Brook has is bullying and threats. They don't have the money to pay for the
initiatives. They can't make every Operator unexpandable. Rewrites are an issue (more
on that later) but that's a long term problem and won't have much impact in the next
few years.
Terminate some franchises? Oh, they can send out nasty letters and make threats in
Operator reviews but that's private communication. Actually terminating a franchise
is a messy, public ordeal.
On one hand Wall Street wants franchisors to be able to boss franchisees around but
no investor wants to hear about a bunch of embarrassing litigation. It would illustrate management's incompetence and says bad things about the future of the brand.
.
Comment of the Week
The operators need to take care of ourselves. "Just Say NO!" Don't do one thing that is not required in the license agreement. We have allowed them to do this to us hoping it will allow us to expand or to avoid being impacted by a new store going to another operator. It is time to stop. They need to get the message loud and clear. If we allow it they will continue to abuse us. Don't rely on operator leadership. Do it yourself. Take items off the dollar menu and raise the price, stop all reinvestment unless it is your best interests. Regardless, of what they say or want get your debt manageable and make money for yourself. This doesn't mean you have to be confrontational just explain that you are not in a position to borrow more money and that is your judgment to make not theirs. If we bend over and spread our cheeks they will continue to ram it to us. They simply don't care. Its not their name on all those financing agreements. Stop thinking this is the MCD of the past where the concept of the three legged stool was real. The three legged stool is now a myth. Take care of NUMBER ONE!!
.
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May 7, 2015
McDonald's Should Fear Its Franchisees
"Unfortunately, Easterbrook’s turnaround plan made almost no mention of the franchisees
that are the public face of the company."
McDonald's Should Fear Its Franchisees - Bloomberg
.
that are the public face of the company."
McDonald's Should Fear Its Franchisees - Bloomberg
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May 6, 2015
May 5, 2015
May 4, 2015
Well, Today Was A Dud!
Today’s McDonald’s events were supposed to excite investors and spike the
price
of McDonald’s shares. Instead, Wall Street was underwhelmed - the longer
Easterbrook talked the more it hurt the stock, ending off $1.67. Everything that
was discussed today could have been revealed on the quarterly conference call 10
days ago or distributed by press release. And McDonald’s Operators didn’t need to
be misled into thinking there would be news today, left to wait for another web
cast next Monday.
of McDonald’s shares. Instead, Wall Street was underwhelmed - the longer
Easterbrook talked the more it hurt the stock, ending off $1.67. Everything that
was discussed today could have been revealed on the quarterly conference call 10
days ago or distributed by press release. And McDonald’s Operators didn’t need to
be misled into thinking there would be news today, left to wait for another web
cast next Monday.
Nation's Restaurant News covers the day
As does Reuters/BusinessInsider
.
