Why all the arm twisting to get OPNAD back in the discounting and price fixing business?
In about forty days McDonald's USA is going to be up against one of the balmiest, warmest, zero snow winters in recorded history. Management knows that a normal or even a mild
winter could send sales negative. As usual the only Oak Brook answer is more discounting
and couponing.
Can OPNAD stand up to the pressure?
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13 comments:
You know the answer, opnad lays down for everything. The big question is can your coops stand up for themselves!
Who in the corp is going to push this? I hear there is a big wave of "retirements" coming next week. You know what happens when the rats start to jump off the ship? You're left with the slow dumb ones!
Of course, we know now what the company will want to do. The key is to have an operator plan to present before the company presentation. The best change that can be made in OPNAD is for the OPNAD representives to become more proactive or act to get what we want rather than react to their proposal's. I understand that they are going to propose that all sizes of coke be offered for one dollar as part of a more comprehensive beverage program. The operators need to understand if they don't already how much subsidy to food cost that drinks contribute to each order. Selling a sandwich with a near 40% food cost and then reducing the price of a coke will be very costly per transaction. Do the math! MCD and Coke have always had a very tight relationship. Coke was for many years number one in beverage sales around the world solely due to MCD. My belief is that led to a relationship that was not always in the operators best interests. Remember those coke rebate checks?
Good luck. That's why Mcd's is getting out of the restaurant business. The only time in recent memory that OPNAD pushed back was the ridiculous hamburger/cheeseburger promo.
The line between Coke and McDonald's Corp. was erased during the Schrage years.
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"The key is to have an operator plan to present before the company presentation."
I got your o/o plan right here...just say NO! to EVERYTHING! Whatever the new USA pres wants, do the opposite. Obviously they think they can steamroll us, just shows they don't understand the U.S. franchise model.
With all due respect, I don't think operator leadership in OPNAD is to commit to saying "NO" and doing the opposite of every thing asked for by the company. I think the real problem with OPNAD is that there is only little operator leadership. If we are just going to say no as a policy position why have OPNAD at all. Just say no when the promotions arrive at the store level. With weak operator leadership and easily accepting every thing asked for, that is not them steamrolling us. It is weak leadership by Opnad representives. I never know when Opnad meets. I have asked that before going to an opnad meeting that our reps tell the operators the agends so that we can give them direction as to what position we want them to take on various issues. I have had no success with that request. Our reps come back and simply report what we will be doing. I'm not unaware of the influence corporate marketing can have on opnad. They can provide so many facts and opinions that you feel stupid by not agreeing with them. There needs to be much better communication all the way around.
Many moons ago I was an opnad rep. I use to send out communication to the operators in the region. The big problem was we did not have a lot details especially prior to arrival. I never understood how these programs were always being put together at the last minute. ALWAYS. Often we would have meetings the day before opnad and the company would still not have all the details. From what I hear, it's only gotten worse.
The biggest issue is opnad reps are of the mindset to send it out to the system rather than kill it at the meeting. There also never seems to be a backup or alternate plan, it's basically take it or leave it. If we ran our coops as poorly as opnad is run we would never get a promotion done.
If beverage value is sent out to the coops as a national program I hope we have enough common sense to kill it. This program should be a coop program, not an opnad one.
We've had heated discussions on the question - is OPNAD Mandatory or Voluntary? Let's go to the ultimate source - McDonald's Corp. This is what the franchising website says:
"To continually maintain and take advantage of our leadership position, each restaurant is required to spend a minimum of 4% of gross sales annually for advertising and promoting the business. Owner/Operators work with local agencies to place advertisements and, in some cases, produce their own creative material. In addition, through a voluntary U.S. cooperative of McDonald's Owner/Operators known as the Operator's National Advertising (OPNAD) Fund, the Company and its Owner/Operators combine to purchase national television advertising."
Here's the link:
http://corporate.mcdonalds.com/mcd/franchising/us_franchising/why_mcdonalds/service.html
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If the following comment looks familiar it's because it was posted about a month ago.
I'm re-posting it since it's germane to this thread.
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OPNAD is a lot more than just marketing. Ask your OPNAD rep about it. In the mid eighties MCD was really pushing this region to do a lot of things in marketing and in other areas that were just too much to ask. Every co-op meeting turned negative. As co-op President I met with our leadership and the result was that I then met with the regional manager and informed him that I had the votes to take the co-op contribution from 3% to 1%, this was before they made us sign pledge cards and I think our action caused some of it. It was like magic. Their whole approached changed. The pledge cards were presented the following year.
OPNAD is no different. Control all that cash going into OPNAD and you control MCD. It would take OPNAD reps with balls bigger than Big Mac's to do it and I don't think there are any. I don't advocate trying to do it but I do think there should be candid discussion about the source of the OPNAD funds and OPNADS accountability to the operators for its expenditure. The issue is like many other issues in that Corporate bureaucrate's take the revenue and the operators for granted. If there was a credible threat to significantly reduce OPNAD's revenue stream even if the money was put into escrow until issues were resolved there would be all kind of actions to appease the operators. But, first the number of Blue suits belonging to lawyers would be too many to count in the co-op meetings.
8/29/2016
i don't know how many operators are part of or read or even agree with posts on this site however I believe it to be a VERY small minority.
Our latest ROA was dominated by brainwashed and smartly dressed 2nd Gens who are being rewarded for singing from the company's song sheet. These are the operators who are growing because they are being offered stores, sometimes before they hit the market. The older, wiser operators are being drowned out of conversations, sidelined and encouraged to find a door. These guys- the ones who SHOULD be driving the discussion- mostly because they know how to solve problems are not in leadership positions therefore the lunacy continues.
I do believe that one solution is an association of some sort- I haven't been around long enough to see one, that serves to provide an outside balance of power. We are separated from the herd and silenced in various and often nefarious ways. I have read about this here for years but am now seeing it quite clearly.
I won't pretend to know how to start such an entity or what could be accomplished if anything however the rats that are left are indeed steering the ship, at least at the regional level- and these rats are NOT in it for our best interests. Operator leadership is simply following commands and growing their personal holdings regardless of what happens in their stores or organizations. Someone said that QSC doesn't matter- they are right, if you want to grow, play the game. Go to meetings and loudly follow what the remaining rats tell you to do.
The company is most definetly running us and this will not change from where I sit. In fact, it is growing faster than most realize. We are simply made busy implementing their ideas rather than owning and operating anything.
The regions are the hired guns of the change that is coming. These peoples lives and career's depend on following direction from higher up. However, it is easy for them. There are no real independant thinker's or much business understanding in the regions, in my opinion. If you want to have any effective advantage at all your debt must be low with a strong cash position. Struggling operators are like shooting fish in a barrel to them.
There are a lot of things being done by this new team that are not all bad. They seem to understand that the company bloat must go. Traditional thinking and relationships will have much less influence. The way things were going over the past several years it was just a matter of time before some shareholder group would reconize the bloat, declining market share,melting cash flow and lower dividends. That situation is energizing to hedge funds and takeover talk would so appear. If successful the operators really would be in a world of hurt. Look to see Easterbrook lavish lots of dividends on the shareholders.
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