From today's investor conference call:
McDonald's USA President says, "there is no concerted effort to change the franchisee
base.” But, he added, the chain does have expectations for performance. “Running
better restaurants is expected,” he said, “and we've outlined an exciting, ambitious
growth plan — one that requires investment. As you put those two together, the
performance expectations and the investments, we’re seeing some owner-operators
who say that now is a good time to exit the system.”
Stated by an accountant who's never run a business and certainly never a restaurant.
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13 comments:
Concerned that many good Owner/Operators are being forced out due
to the cost of Vision 2020. There is a rush to get out, more and
more stores are up for sale. Sad to see McDonald’s becoming something
entirely different than founder Ray Kroc’s vision. McDonald’s stores
will become very expensive to purchase in the near future and very
hard to make the returns we enjoyed in the past. A McDonald’s will
become affordable only to those with big bucks. But maybe there will
be a shortage of people who have the operating skills to be successful
and make McDonald’s the darling business it was just a few years ago.
The kiosks that I have seen are not being used by great numbers of
people as projected and will become very expensive billboards, as many
people still prefer to place their orders with live people. And many
staff and crew are leaving McDonald’s due to the complexity of the job
and the pressures placed on them by McDonald’s to do more, faster. Even
customers are getting upset due to the mistakes in their orders and the
longer wait times. All this pressure to upgrade the lobbies and the
seating areas, when more customers are ordering food from mobile apps, etc.?”
We are doing so much, so fast and we aren’t doing any of it properly. Combine that
with our staffing problems and we might be close to breaking McDonald’s.
They have carved the Heart & Soul out of this business and ATE it.
They want more kid business, then Fire Ronald McDonald
They want faster D/Ts, then add to the McCafe menu and Add fresh beef.
They want higher Cash Flow, then add Labor to the Dinning room to teach
people how to use a Kiosk.
They want better Operations, then let Operators grow to 20, 30, 40 & 50 Stores.
They want us to give Gold Standard everything, Yet their Communication &
Technology is No Standard
They want us to give Table Service, yet I would be happy to have people
just to give Service.
They want Better Ads, but Creates an Ad Agency from 2 Old Dryed Up ones.
I am sure my fellow Operators can add more to this list.
I am afraid I might have missed my best Window to Sale and retire.
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They want us to sell McCafe drinks then bring McCafe into every retail outlet on earth to compete against our restaurants.
Agreed with that last comment...
But also, they talk about guardrails with this $1, $2, $3 so that "we" can adjust but have already stated that they won't even look at it until 3 months in and certainly won't make any changes until at least 6 months in (which really means 2019 at earliest). If this thing falls on its face (the competition has known for months), we'll be modernly and progressively losing our shirts.
https://www.buzzfeed.com/venessawong/mcdonalds-cheap-value-menu?utm_term=.trqW75pGl
When they told the operators that they were going to put McCafe in grocery stores back in 2011-12, only a couple operators at my Co-Op meeting spoke out; the rest, I assume, were afraid to. When I did object, the response from the VP was "well Starbucks and Dunkin' do it." Then I said that Starbucks is not franchised, and he responded "Well, Dunkin' does it." That was the end of the conversation. All I can say is that you reap what you sow.
Every day the restaurants become more difficult to operate, and every day we have a
tougher time finding employees.
We need to strip the menu back by at least one-third. Instead we’re adding products
and complexities.
As you put those two together, the
performance expectations and the investments, we’re seeing some owner-operators
who say that now is a good time to exit the system.”
I call BS. I'm leaving because the price is as high as it will ever be for reinvested well run restaurants
Dunkin does sell Dunkin' Donuts coffee in grocery, but DNKN splits 1/2 of the revenue from that business with its franchisees.
Got no problem running better restaurants makes sense; Chris K why don't you help us out by running a better technology and IT department so our managers can spend more time running the restaurants?
Not sure why #1 says stores will get more expensive, if anything the excessive reinvestment mandates are driving down prices and equity
I assumed that person was thinking of opening new stores. There's no way, in the current environment, that stores will increase in resale value. Too many sellers, reinvestment requirements, decreasing number of domestic Operators, constantly changing expandability requirements, etc. etc.
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