$3.5 BILLION in dividends - more than $100,000 per location in financial assistance that could be rendered - or a even simplier WIN/WIN with the demise of the $1.00 ANY SIZE SOFT DRINK.
But Mr Penny, it isnt about the system - its about Stock Option, Stock Price and the ever important Dividend. "Its not Ray Kroc's McDonald's any longer", didnt you get THAT memo? Some would say, McDonald's is getting scarce in its franchise pool of operators. Hinging on breaking the franchise model in the name of revenue generation. The preverbalial "cutting out the middle man", you'd say. "But McOpCo ran crappy restaurants", you'd say. Well, for some organizations under the protective umbrealla - corporate is already running those stores under the guise of a franchise tag.
Unable to understand pre-debt verse post-debt cashflow - McDonald's looks at the riches of the operator field to line their pocket. Failing to recognoize, they themself never ran the P&L to deliver such results. Never mind, cause even if they could capture that for a cycle - think of the Stock Options in that cycle. Enough to cash out, then bail out? Perhaps with a lover and a golden parachute? But, I digress...
McDonald's will say they "stepped up to the plate" with consistent reinvestment assistance to the operator. Like all the SITE IMPROVEMENT, BUILDING IMPROVEMENT and other assistance to help reinvest into the mega-real estate investment holdings of the firm. I mean, "partnering with their franchisees", whom also paid on those real investments - and then paid rent - some even higher rent.
So you see Mr. Penny, this isnt a one off event. Its the ending to a long list of atrocities to the franchise model. Can't fight the Arches?! McDonald's is the last of a long list of brands whos model has run its course. Currently led with new leadership that no longer has "ketchup in its veins". Just simple greed in its pocket. The motto, "we aren't just on your corner, but in your corner" is long gone. Oh, you'll find remnents in small pockets here and there. Operators giving back, fostering the image, "shining the arches". But as technology takes away the local store marketings and COOPS soldifiy around a NATIONAL strategy. The "MY TOWN" McDonald's grasp its last breath, along with it the final glimpse of era gone by, as its softly lowered next to a grave already marked Ronald McDonald.
The past few comments on the last 2-3 articles that are posted are accurate
I will not add anything because they are all well written
The comment I will write is to the operators with the CATSUP IN YOUR VEINS / the MCD we know is dead we might as well accept it - it makes me very depressed & I could just cry -
I pray that all of you get thru this - The people that will help you the most are your family & your fellow operators
It is clear to me that joe E. was not the author of 100% of the letter. At one time the USA President would have written the letter and its content would have been much different. In recent years letters like this are turned over to staff using the management term "completed staff work" written for an executive to sign. The language and phase's used are from angry and jealous staff who think they own MCD. MCD has its own "Deep State" and are making decisions and statements they should not be doing or making. Chris K. is as clueless as he was on his first day on the job. What is the problem with the BOD??? The operators and our customers deserve better. The system grows weaker every year. Everything is at arms length. This will lead to outcomes no one wants. Re investments dreamed of by management will no longer be possible.
Today would be day 2 of World Wide - where we would collectively spend millions on flights - rooms - meals ECT ECT ECT - time away from family and restaurants
2 years ago STEVE (no longer with us) said there will be a lot of cost cutting in our labor and efficiencies
I am well aware of the COVID-19 - - - HOWEVER - I am certain these plans were wrapped up before all this hit - WHEN ARE WE GOING TO HEAR ALL THESE PLANS?
MCD has GREAT ideas for WW - where are they?
Or do we wait another year & spend the money
This makes me wonder “WHY DO WE NEED A WORLD WIDE convention?
I don't think Howard will get invited on any more trips. Sad really that a journalist has more experience in and a better understanding of the workings of our system than the current so called Leaders.
Each of us should email our thanks to Mr Penney for stepping up and courageously writing this. Would love to be a fly on the wall when Clueless Chris or the corrupt BoD reads this!
HPenney@hedgeye.com
On Twitter: @HowardWPenny
PS- rumors out of MHQ say Chris has been unusually irritated lately !
you know, I saw his (Chris K) interview recently about our "thank you meal." and there was not a single item in the shot of his office that would let you know it's McDonald's..... there was some duke basketball and family pictures. No arches, no Ronald, nothing. for a company that brands everything, you would think we could do better.
And I know Howard reads this blog. In short, Thank you Howard!
Howard is spot on. He knows infinitely more about restaurant operations than any suit at MCD. That's a sad state of affairs when a stock analyst would make a better restaurant operator than the MCD management team
There are restaurants that should never re-open their lobbies and stay drive Thru only, but even those will be forced to borrow hundreds of theoisands of dollars to "upgrade" them and add labo cost. Where is my escape hatch. I'm not even asking for a golden parachute like every inept suit at MCD HQ has, I just want OUT!
14 comments:
WOW. This guy hits a home run. Chris K and Joe E should be "retired". They are destroying the McFamily. Thanks howard
Short sell the stock? Nice work gentlemen!
$3.5 BILLION in dividends - more than $100,000 per location in financial assistance that could be rendered - or a even simplier WIN/WIN with the demise of the $1.00 ANY SIZE SOFT DRINK.
But Mr Penny, it isnt about the system - its about Stock Option, Stock Price and the ever important Dividend. "Its not Ray Kroc's McDonald's any longer", didnt you get THAT memo? Some would say, McDonald's is getting scarce in its franchise pool of operators. Hinging on breaking the franchise model in the name of revenue generation. The preverbalial "cutting out the middle man", you'd say. "But McOpCo ran crappy restaurants", you'd say. Well, for some organizations under the protective umbrealla - corporate is already running those stores under the guise of a franchise tag.
Unable to understand pre-debt verse post-debt cashflow - McDonald's looks at the riches of the operator field to line their pocket. Failing to recognoize, they themself never ran the P&L to deliver such results. Never mind, cause even if they could capture that for a cycle - think of the Stock Options in that cycle. Enough to cash out, then bail out? Perhaps with a lover and a golden parachute? But, I digress...
McDonald's will say they "stepped up to the plate" with consistent reinvestment assistance to the operator. Like all the SITE IMPROVEMENT, BUILDING IMPROVEMENT and other assistance to help reinvest into the mega-real estate investment holdings of the firm. I mean, "partnering with their franchisees", whom also paid on those real investments - and then paid rent - some even higher rent.
So you see Mr. Penny, this isnt a one off event. Its the ending to a long list of atrocities to the franchise model. Can't fight the Arches?! McDonald's is the last of a long list of brands whos model has run its course. Currently led with new leadership that no longer has "ketchup in its veins". Just simple greed in its pocket. The motto, "we aren't just on your corner, but in your corner" is long gone. Oh, you'll find remnents in small pockets here and there. Operators giving back, fostering the image, "shining the arches". But as technology takes away the local store marketings and COOPS soldifiy around a NATIONAL strategy. The "MY TOWN" McDonald's grasp its last breath, along with it the final glimpse of era gone by, as its softly lowered next to a grave already marked Ronald McDonald.
The past few comments on the last 2-3
articles that are posted are accurate
I will not add anything because they are
all well written
The comment I will write is to the
operators with the CATSUP IN YOUR
VEINS / the MCD we know is dead
we might as well accept it - it makes me
very depressed & I could just cry -
I pray that all of you get thru this -
The people that will help you the
most are your family & your fellow
operators
GOD BLESS
Great comments
This is not your mom/dads MCDONALDS
I am so pissed off with the way we are
going / if I was in so much debt I
would be gone - I am locked in
CRIS talks about this 3 year plan
What is the 3 year plan for operators
for CHRIS - & MCD
1,600 operators
1,400 operators
1,000 operators
I want to ask that question at a co-op
meeting but really don’t have the balls
to do it - I WOULD BE DEAD MEAT
so all I can do is say it here
LAST - our MGRS & crew are working
their asses off for this brand - the suits
do not have a clue nor do they care
Glad the NOA is in existence - where would
we be if it was not for the NOA?
Your team are HEROS - the suits are
ASSHOLES - sorry RICHARD just
being honest
Our crew has more pride in the brand than
CRIS even would
It is clear to me that joe E. was not the author of 100% of the letter. At one time the USA President would have written the letter and its content would have been much different. In recent years letters like this are turned over to staff using the management term "completed staff work" written for an executive to sign. The language and phase's used are from angry and jealous staff who think they own MCD. MCD has its own "Deep State" and are making decisions and statements they should not be doing or making. Chris K. is as clueless as he was on his first day on the job. What is the problem with the BOD??? The operators and our customers deserve better. The system grows weaker every year. Everything is at arms length. This will lead to outcomes no one wants. Re investments dreamed of by management will no longer be possible.
Somebody send Mr Penney the NFLA Owner/Operator Economic Franchisee Relief Plan
Today would be day 2 of World Wide - where we would collectively spend millions on
flights - rooms - meals ECT ECT ECT - time away from family and restaurants
2 years ago STEVE (no longer with us) said there will be a lot of cost cutting in our
labor and efficiencies
I am well aware of the COVID-19 - - - HOWEVER - I am certain these plans were wrapped
up before all this hit - WHEN ARE WE GOING TO HEAR ALL THESE PLANS?
MCD has GREAT ideas for WW - where are they?
Or do we wait another year & spend the money
This makes me wonder “WHY DO WE NEED A WORLD WIDE convention?
remember the word MILLIONS - when you answer
HPenney@hedgeye.com
On Twitter: @HowardWPenny
.
Mr. Penny hit all the correct points very accurate letter.
I don't think Howard will get invited on any more trips.
Sad really that a journalist has more experience in and a better understanding of the workings of our system than the current so called Leaders.
I appreciate all the comments! Thank you!
I wish the entire MCD community all the best in theses difficult times!
My Best,
Howard Penney
p.s. My go-to burger is a QPC w/cheese (just ketchup!)
Each of us should email our thanks to Mr Penney for stepping up and courageously writing this.
Would love to be a fly on the wall when Clueless Chris or the corrupt BoD reads this!
HPenney@hedgeye.com
On Twitter: @HowardWPenny
PS- rumors out of MHQ say Chris has been unusually irritated lately !
you know, I saw his (Chris K) interview recently about our "thank you meal." and there was not a single item in the shot of his office that would let you know it's McDonald's..... there was some duke basketball and family pictures. No arches, no Ronald, nothing. for a company that brands everything, you would think we could do better.
And I know Howard reads this blog. In short, Thank you Howard!
Howard is spot on. He knows infinitely more about restaurant operations than any suit at MCD. That's a sad state of affairs when a stock analyst would make a better restaurant operator than the MCD management team
There are restaurants that should never re-open their lobbies and stay drive Thru only, but even those will be forced to borrow hundreds of theoisands of dollars to "upgrade" them and add labo cost. Where is my escape hatch. I'm not even asking for a golden parachute like every inept suit at MCD HQ has, I just want OUT!
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