Ed has always been a terrific public speaker and he seems to enjoy putting his skills to
use on the FOX channels.
Fmr. McDonald’s CEO: ‘Fight for $15’ movement is falling apart, they are a bunch of socialist, fascist hypocrites as far as I’m concerned.”
.
May 30, 2017
May 27, 2017
McDonald's Operator Comment of the Week
"Comeback? Talked to my accountant today about Vision 2020 and EOTF. They are
a medium sized Northeastern firm , with about 600 McD stores as clients. He told
me that based on the McD plan (requirements) they are advising 15% of their
clients owning 86 stores to refuse McD demands or face BANKRUPTCY. Modern
and progressive, partners INDEED !"
.
a medium sized Northeastern firm , with about 600 McD stores as clients. He told
me that based on the McD plan (requirements) they are advising 15% of their
clients owning 86 stores to refuse McD demands or face BANKRUPTCY. Modern
and progressive, partners INDEED !"
.
May 25, 2017
May 24, 2017
May 23, 2017
On Vision 2020
One of the big McDonald's Operator CPA firms is sending around an E-mail concerning
V2020 suggesting that Operators coordinate with their CPA and their bankers on
developing a plan.
That's great advice. But what about an Operator's legal advisers?
If McDonald's is trying to get Operators to make changes to their existing franchise
agreements shouldn't Operators have someone look at the impact on the contractual relationship?
As we've discussed before - this is a great opportunity for the more powerful party to
sneak in substantial changes to the franchise.
McDonald's Operators could be walking into a legal buzz saw.
But if changes are coming to the franchise it's likely that 90% of McDonald's Operators
will not have sought legal advice when McDonald's executives demand they "sign here".
.
V2020 suggesting that Operators coordinate with their CPA and their bankers on
developing a plan.
That's great advice. But what about an Operator's legal advisers?
If McDonald's is trying to get Operators to make changes to their existing franchise
agreements shouldn't Operators have someone look at the impact on the contractual relationship?
As we've discussed before - this is a great opportunity for the more powerful party to
sneak in substantial changes to the franchise.
McDonald's Operators could be walking into a legal buzz saw.
But if changes are coming to the franchise it's likely that 90% of McDonald's Operators
will not have sought legal advice when McDonald's executives demand they "sign here".
.
May 22, 2017
RBC Capital Studies Big vs. Small Restaurants
Analyst David Palmer discusses some of the advantages privately held In-N- Out,
Chick-fil-A, and Culver's have over larger chains.
Understandably, David doesn't' mention the biggest advantage these three chains
have - they don't have Wall Street leading them around like a dog on a leash.
And he should have mentioned Chick-fil-A's "operator on premise" policy.
RBC Capital's report on restaurant consumer attitudes
.
Chick-fil-A, and Culver's have over larger chains.
Understandably, David doesn't' mention the biggest advantage these three chains
have - they don't have Wall Street leading them around like a dog on a leash.
And he should have mentioned Chick-fil-A's "operator on premise" policy.
RBC Capital's report on restaurant consumer attitudes
.
May 19, 2017
May 17, 2017
More On EOTF and the Four Percent Myth
When I first heard that McDonald's management was proposing a change to the 4% advertising requirement I assumed it was because of the Oak Brook management team's
lack of knowledge of McDonald's.
But now that the idea is moving forward I'm beginning to wonder if this isn't a huge
scam on McDonald's Operators. Lower the franchise agreement advertising percentage
but raise OPNAD?
As we've discussed before, the 4% is meaningless since most McDonald's Operators spend
far above that percentage in advertising and promotion.
As a comparison - Let's say you have a store that's been paying percentage rent for years.
Base rent and base sales are merely numbers in your lease, the important line item is the
rent percentage you pay every month.
McDonald's comes to you and offers to lower your base rent if you do such and such. Your percentage stays the same. How did adjusting your base rent benefit your business? Or
make any difference at all?
This proposal is/would be the same, a meaningless change to the terms of your franchise.
Since I'm not an attorney I can't give contract advice but I understand negotiations. If
there's a deal in place, whether a handshake or a rock solid franchise agreement, once
you open it up for changes, anything goes. Both sides can ask for changes to unrelated
terms. And the more powerful party usually prevails.
Renegotiating the contract carries a big risk for McDonald's Operators. The language
about advertising is short and pretty simple and wide open on how an Operator should
spend the 4%. There's no mention of Co-Ops or any kind of advertising funds. These
things developed organically over the decades. But they could be cast in concrete by
messing with your current agreements.
I'm not so worried about reducing the number of Co-Ops and agencies. That can all
be normalized after this management team is gone. But negotiating changes to your
existing franchise agreements in any way? Don't do it.
===================================================================
Of course there are huge gaps in my knowledge about EOTF because I don't attend your meetings but, I keep hearing about "votes". If those votes are related to changing the advertising percentage in the franchise agreement, I don't see how that's possible. Co-Op
votes are valid because membership is voluntary and members use a democratic process
to decide on contribution rates, expenditures, etc. You're operating as a homogeneous
body in a cooperative manner, hence the term "Co-Op".
But your franchise agreements are between you as an individual and McDonald's. The
other Operators in your Co-Op or OPNAD are not a party to your franchise agreements.
They can't vote to change them.
That's why I now think this is a scam to get more control over the individual Operators
(what's new) and getting rid of Co-Ops and agencies is the biggest power grab in the
history of McDonald's.
.
lack of knowledge of McDonald's.
But now that the idea is moving forward I'm beginning to wonder if this isn't a huge
scam on McDonald's Operators. Lower the franchise agreement advertising percentage
but raise OPNAD?
As we've discussed before, the 4% is meaningless since most McDonald's Operators spend
far above that percentage in advertising and promotion.
As a comparison - Let's say you have a store that's been paying percentage rent for years.
Base rent and base sales are merely numbers in your lease, the important line item is the
rent percentage you pay every month.
McDonald's comes to you and offers to lower your base rent if you do such and such. Your percentage stays the same. How did adjusting your base rent benefit your business? Or
make any difference at all?
This proposal is/would be the same, a meaningless change to the terms of your franchise.
Since I'm not an attorney I can't give contract advice but I understand negotiations. If
there's a deal in place, whether a handshake or a rock solid franchise agreement, once
you open it up for changes, anything goes. Both sides can ask for changes to unrelated
terms. And the more powerful party usually prevails.
Renegotiating the contract carries a big risk for McDonald's Operators. The language
about advertising is short and pretty simple and wide open on how an Operator should
spend the 4%. There's no mention of Co-Ops or any kind of advertising funds. These
things developed organically over the decades. But they could be cast in concrete by
messing with your current agreements.
I'm not so worried about reducing the number of Co-Ops and agencies. That can all
be normalized after this management team is gone. But negotiating changes to your
existing franchise agreements in any way? Don't do it.
===================================================================
Of course there are huge gaps in my knowledge about EOTF because I don't attend your meetings but, I keep hearing about "votes". If those votes are related to changing the advertising percentage in the franchise agreement, I don't see how that's possible. Co-Op
votes are valid because membership is voluntary and members use a democratic process
to decide on contribution rates, expenditures, etc. You're operating as a homogeneous
body in a cooperative manner, hence the term "Co-Op".
But your franchise agreements are between you as an individual and McDonald's. The
other Operators in your Co-Op or OPNAD are not a party to your franchise agreements.
They can't vote to change them.
That's why I now think this is a scam to get more control over the individual Operators
(what's new) and getting rid of Co-Ops and agencies is the biggest power grab in the
history of McDonald's.
.
May 16, 2017
The Founder - The Movie
I've watched "The Founder" a couple of times and have to
say I enjoyed it, at least the first half.
I've heard or read the stories about Ray Kroc and the McDonald brothers a few thousand times so it was fun to see the story dramatized on film. Ray doesn't come across as a saint but as a normal, hard working salesman.
The second part of the movie is a desperate attempt to
make the movie interesting and is a mess. I don't know if I was around McDonald's when Ray met Joan. But, because I started in Minneapolis, I eventually knew all the folks portrayed in "The Founder". The writers pretty well messed up individual roles and much of the historical timing of those years.
So it's not historically accurate and it's certainly not a documentary. For those interested in McDonald's history, pick up a copy and watch it until the scenes with the screaming matches between Ray and the brothers. That's where the fantasy kicks in.
But is it an anti-McDonald's film like "Supersize Me"? Not at all. I think McDonald's veterans will enjoy the first part and will get a good chuckle out of the way they try to re-enact the kitchen operation.
.
May 15, 2017
WSJ Article Update
Well, nuts: I used to be able to tell if an article was available to non-WSJ
subscribers by signing out of my WSJ account and then trying to access
the article. They must have changed the way their cookies work because
on all three of my systems I can see the entire article while I'm signed out.
Sometimes when an article is behind the paywall on the WSJ site they
publish the entire thing free at marketwatch.com, a WSJ subsidiary.
But not this time.
Anyway, here's a couple of other publications' take on the WSJ article.
From Hayley Peterson at Business Insider
QSR mag - McDonald's opening the checkbook for franchisees
Investopedia - McDonald's desperate to modernize franchisees
Again, a big high-five to the Operators who participated in the writing of
this article.
McDonald’s Boosts Its Payout for Franchise Upgrades - WSJ
.
subscribers by signing out of my WSJ account and then trying to access
the article. They must have changed the way their cookies work because
on all three of my systems I can see the entire article while I'm signed out.
Sometimes when an article is behind the paywall on the WSJ site they
publish the entire thing free at marketwatch.com, a WSJ subsidiary.
But not this time.
Anyway, here's a couple of other publications' take on the WSJ article.
From Hayley Peterson at Business Insider
QSR mag - McDonald's opening the checkbook for franchisees
Investopedia - McDonald's desperate to modernize franchisees
Again, a big high-five to the Operators who participated in the writing of
this article.
McDonald’s Boosts Its Payout for Franchise Upgrades - WSJ
.
May 12, 2017
WSJ Creates a McStir About MCD $$$ to Operators
Kudos to those McDonald's Operators who worked with the WSJ on this article.
McDonald's Is Desperate to Modernize Its Franchisees - Investopedia
.
McDonald's Is Desperate to Modernize Its Franchisees - Investopedia
.
May 11, 2017
When Did the McDonald's Franchise Become a Suicide Pact?
Operator comment:
Anonymous said...
As to the delivery economics, Uber will pay the driver the $4.99 delivery fee per order. UBER will charge the McD store a 15% service fee. McD will collect full rent and service fees on everything but the delivery(driver) fee. Uber WINS. McD WINS. Operator LOSES. Thanks to the NLC for endorsing this profit losing program. This was CONFIRMED at the Gallery Walk by our NLC rep.
Anonymous said...
As to the delivery economics, Uber will pay the driver the $4.99 delivery fee per order. UBER will charge the McD store a 15% service fee. McD will collect full rent and service fees on everything but the delivery(driver) fee. Uber WINS. McD WINS. Operator LOSES. Thanks to the NLC for endorsing this profit losing program. This was CONFIRMED at the Gallery Walk by our NLC rep.
May 10, 2017
Unions Support Board Seat For McDonald's Operators?
Another example of how the SEIU has no understanding of the McDonald's system.
Interestingly, the letter currently being sent to McDonald's Operators bears the address of
the "Owner Operator Information Center". Turns out this address is in lower Manhattan.
Do they have several floors in a Wall Street high rise? Nope, it's a UPS Store mailbox.
$19.95 a month
.
Interestingly, the letter currently being sent to McDonald's Operators bears the address of
the "Owner Operator Information Center". Turns out this address is in lower Manhattan.
Do they have several floors in a Wall Street high rise? Nope, it's a UPS Store mailbox.
$19.95 a month
.
May 8, 2017
May 6, 2017
Just Trying to Figure Out a Few Things
* Heard it on the Internet - It is rumored that
Martin-Brower is going to begin doing distribution
for Chick-fil-A. Talk about sleeping with the enemy!
* Is it true that the third party food delivery companies
will charge the customer a delivery fee and also retain
a % of the food total, paying less than 100% to the Operator?
1) Where's the Operator's profit in that transaction?
2) Do Operators pay rent and service fees on 100% of the order?
Comments? ... Clarifications?
.
May 4, 2017
Caution! Union Thugs in the Area
I've delayed mentioning this for two days because the idea that organized labor could
do anything for franchisees is ridiculous. And there's no need to lecture franchisees
about the dangers of working with unions. If there are franchisees who would do
so - they're beyond help.
Everyone's heard the parable about the camel getting his nose inside your tent.
But here it is anyway
McDonald's accused by SEIU of gouging franchisees on rent - Chicago Business Journal
.
do anything for franchisees is ridiculous. And there's no need to lecture franchisees
about the dangers of working with unions. If there are franchisees who would do
so - they're beyond help.
Everyone's heard the parable about the camel getting his nose inside your tent.
But here it is anyway
McDonald's accused by SEIU of gouging franchisees on rent - Chicago Business Journal
.