A view from the front row seats of recent developments is surreal to those of us who grew up in the McDonald’s System.
An Undeniable Narrative: "Death of an industry-leading culture and legacy" via four years of policies, from “Partners and Collaboration, to Command and Control”, or, ”Your opinion doesn't have a home any longer!".
Who will lead? Who will tell the "rest of the story" and add up the list to reverse engineer the success of a 3-Legged Stool created by the pioneering Founders?
The final chapter of McDonald’s has been written as another sham corporate power grab. The most recent degrading management action:
The "Death of an Industry" leading corporate partnership culture, by removing major incentives of long-term equity, assurances of a long-term relationship and if you deliver, you grow without automatic built-in legal impediments:
The "Triggering Event" was a corporate announcement without Owner input, ending the historical legacy that set McDonald's apart.
McD's policy memo after four 4 years of build-up for the ultimate nuclear announcement.
The McPresUSA's memo was received without previous Owner input and without regard to recent events adding the Labor Recruitment & Retention Terminator known as PACE. (In spite of the worst labor environment in history). That is the PACE grading at the worst time, they are ending the original franchising agreement and philosophy of 60+ Years. Every Owner's Equity goes down without the understanding of a 2nd or 3rd 20-year lease, a given before.
Equity is the entire reason Owners believe in their retirement "payoff" after 20-40+ years of building the system so that they can sell one day after building their marketplace and respective restaurants. There are hidden messages to hurt Owners, yet most Owner Advocacy is without an action plan, or strategy and proliferates the message the current Owner Leaders are now wearing the jerseys of so many failed leaders before them.
The fact they are worn out, outmaneuvered by novice adversaries, intimidated beyond the imagination of adult business leaders, or complicit in various respective back door agreements to protect a senior management team that the McDonald’s Board should have made wholesale changes after the series of:
* Basic Foodservice Industry mistakes,
* Brand embarrassments of major corporations starting with both recent CEOs,
* Non-existent or incomplete material internal investigations (Easterbrook violations, CK multiple errors in judgment, and inability to express the brand values publicly)
* Incalculable damage to the brand through behaviors as above, business mistakes self-inflicted, mistreatment of corporate employees (series of legal actions and losses), Owner/Operators (immeasurable stories and the continuation of franchisee outbound flight setting records due to relationship mismanagement.
* Decisions that will light the last restaurant employee's torch for leaving the restaurants to others with less bureaucracy, ill-timed requirements, and grading (PACE) that has already lost the Owner’s best managers, supervisors, and upcoming stars…now flowing to competitors providing similar wages without the nightmare of a corporation lost in its own bureaucracy.
33 comments:
Wow. This guy (or gal) gets it! A must read for anyone who loves the Brand.
YES GREAT READ ON THE 4th OF JULY
PACE was not presented to any operator I know & I know several in key leadership positions
let’s add to the game
what do we have 50-55 co-ops?? Let’s do the same with those - what co-op is in the 1st bucket & what co-op is
in the 💩💩💩💩💩💩bucket
how many MCOPCO?? understand 5% of 14,000 is 700 !! let’s do those as well // sell them to another sucker
what ad agency is in the bottom bucket?
that’s a start - I am sure someone can add another dozen to this
HELL - football season is right around the corner NFL - COLLAGE
let’s just drop the bottom 1/3 of those teams
then in a few years drop another 1/3
eventually you will run out of teams
example 32 NFL - take 33% out you have 21 teams - - little hard to divide up
so get down to 20. 4 divisions 5 teams a division - few years now you ar down
to 14. DO YOU SEE HOW STUPID THIS PACE 💩 IS?
• Important to Read FEG Owner Blog Comments: Historically the Only Place Other than Kalinowsky Report for Owners to Trust Anonymity...Realistic, not contrived, despite some Owner Leaders trying to justify their lack of engagement:
Other Initial Owner Replies to Erlinger Missive:
> This morning every operator received an email from Joe Erlinger regarding changes to Rewrite “New Term”.
> We have just barely gotten through Covid-19 and more variants are coming.
> Most operators have struggled through Covid -19 times with added stress of the labor markets.
>
> McDonald’s talks about people first but yet demoralizes our crew and managers with Nitpicky PACE evaluations. Our crews and managers who have stayed and worked during Covid are exhausted and tired. Now McDonald comes out changing the terms of the franchise “New Term” .
>
> I hope the NFLA works on pushing back against McDonalds greedy, abusive practices.
NOA Members Are CALLING FOR THEIR Leadership Group Created to Combat this Change of Culture. The NOA started 4 years ago, charging Owners Membership dues to receive "a Voice", to be their Supporter & Grassroots Fighters--NOA Members are losing hope in NFLA, and demanding NOA Leadership Action.
Recent progress in the MCD stock market price and sales has more to do with the "Founder's Vision" than the current combined leadership. They understood ubiquity with consistency would be a model most on the horizon couldn't keep up with (watch out for Chick-fil-A catching up with an original McD-like culture, especially with people, yet about a 40-year late start), they had Value as the second principle in their business plan only needing four letters, Q, S, C &V. (Quality, Service, Cleanliness & Value)...today's inflation and family spending suppression are a Tribute to Ray's Vision...with a MCD management team that has policies to even ruin that partnering notion on Happy Meal pricing strategies, on complete undisciplined Menu Board structure, a "death knell" to sales as every intelligent CFO predicted for six decades. Let's forget about all the talk of Fred and Ray, of valuing your people...all the initials, programs, and experts consulted, have brought forth programs, that in the hands of current management will make Starbucks look good when the real Union sunlight breaks through what they are doing to our people from start to finish...do we even mention PACE, or while others steal our best employees, do we again subordinate to management's policies, not built on business cases...rather as petty threats made over a year ago to the Owner leadership, that they will "show who's the franchisor" and have yet to take their foot off the gas pedal as Owner after Owner is run over, pulls into the pits to quit the race before any more abuse, and speak of a brand we all loved once with Vitriol.
I hear from a lot of former Owner/Operators. They often speak of the corporate culture and individual executives with vitriol. They never speak about the "brand" that way.
.
Corporate thinks we are a bunch of lazy do nothings. We each have millions invested, billions collectively. What does upper management have at risk except for their free stock options? If I default on my loans, I lose my house and all my assets. Of course Im going to work my tail off, I have skin in the game! They dont. Yet the SLT doesnt appreciate us one whit. They dont even include us in the planning process.
For example, Joes email said :
"In addition, we are asking our owner/operators to self-certify the “Full Time Best Efforts” requirement in the O/O Involvement Standard. For existing owner/operators, this will be part of the Business Review, and will be considered with the application for a New Term. For new owner/operators, self-certification will be required before signing the contract to own and operate the first restaurant."
Richard. Unless I read it wrong, I believe the owners comment above referencing "vitriol" was not meant to be a indictment of other owners or the brand. Perhaps they should have used the word "passion" or "gusto".
Just look at the Headlines from the July 4, 2022 edition of Restaurant Business Magazine-
"MASS EXODUS -MCDONALD'S FRANCHISEES ARE LEAVING THE SYSTEM"
"FRANCHISEE UNREST GROWS AS MCDONALD'S CHANGES ITS RULES"
"SOMETHING IS NOT WORKING BETWEEN MCDONALD'S AND ITS FRANCHISEES"
"MCDONALD'S IS TIGHTENING ITS FRANCHISE OWNERSHIP STANDARDS"
"SOME MCDONALD'S FRANCHISEES HAVE A UNUSUAL BUYER- THE COMPANY"
the actual phrase was "a brand we all loved once with vitriol". Trouble is Love and Vitriol are contradictory terms. We'll have to let others make up their minds.
.
"Corporate thinks we are a bunch of lazy do-nothings"... No matter what they actually think it's important to their careers that they convince investors and the public that the Owner/Operator body needs improvement and refinement (and a good swift kick).
See, you guys committed the ultimate sin - you saved the system from the pandemic while the million-dollar pajama boys sat home talking into their computers. Now it's time for your punishment. Please reread the history we reviewed about a previous CEO in the late 1990s. It's really important they convince the media and stakeholders that you live your life on the golf course.
.
found this bit of info
6/28/22
AMERICAN CUSTOMER SATISFACTION
INDEX
CHICK #1 8 straight years 83 points
all fast food 76 points
MCD 68 points
let’s see what “K” thinks the problem
is here HE DOES HAVE A COLLAGE
EDUCATION AFTER ALL
remember him telling LIGHTFOOT
that parents need to take care of
their kids better after 2 were shot
in Chicago - then he had to
walk it back how about those
values MCD listed - family
community - GREAT EXAMPLE “K”
you are an embarrassment to
the POLISH community !!!!!!!!!!!
looking to the future
Why would a 20 30 year old person
take his / her money & bet it on a
career with MCD?
if someone asked me I would say
RUN AT FAST AS YOU CAN
You can lose you franchise faster then
a donut down Michael MOORE’s throat
we need to fight this for the sake of
the 1,600 we still have left
SEEMS IT MEANS 500 or so could
be walking the plank but not until
it is rewrite - or what ever it is called
if me - those last 2-3 years
1. Do better & save the day
2. don’t give a 💩 & take as much out
as I can - MCD can’t do anything prior
to that - at least in my opinion
sounds like my 1st wife making all
the rules - well she got what she
wanted
BE SAFE
Let’s talk family and community for a minute
CRIS K says a senseless comment about 2 young people that were shot
& the headquarters was picketed for his firing
CHARLIE STRONG sued by 2 black employees - you can find on GOOGLE
50 - 60 Black operators suing MCD for store locations
MCOPCO having 100’s of labor violations well over 500,000.00 MILLION
read that 1,700 stores were sould last year - that’s a record - I am a betting msn & I think we will be higher than that
Lost 2 GM’s to OUTBACK - less pay - open at 10:00 / no PACE to worry about - way less stress
speaking of PACE - there are close to 15K MCD - which means there will always be close to 5,00O restaurants in
the 3rd bucket all the time
WHATS THE DIFFERENCE FROM #498 in the 1st bucket & #505 in bucket #2
This new blood that MCD are mentioning will not be better the the operators that life - sweat & tears ran their
store for years
I can sell them 1 of my 1.8 million stores & see how they do with that
happy 5th of July
A lot of GREAT comments the past few days
NOA - can we turn this ship around? very very many head winds
I would get out tomorrow but I owe to much money to Chase - several of my friends as well
think someone already mentioned but MCD used RAY’s words quite a bit in the new system that
we will be going to - - whoever did the write up thought that would unite us - words matter
USING RAY’s WORDS IN THIS MCDONALDS CULTURE IS AN OUT RIGHT LIE & IS AN EMBARRASSMENT
TO THOSE THAT CAME BEFORE US
can’t wait to leave & I am the owner / trying to make my TEAM believe in a nightmare
Bottom line- Unless we hang together, owners, owners groups, etc, we will surely hang separately. IF there ever was a time for unity-this is it! Dont forget the fiasco forced upon us by a complacent NLC called BBV2020! We spent billions collectively on Taj Mahal Dining Rooms, yet 85% of our sales come thru drive thru. Chik Fil A spent their monies on drive thrus and are eating our lunch. This management team makes lousy decision and must surely go. UNITY
Let’s talk family and community for a minute
CRIS K says a senseless comment about 2 young people that were shot
& the headquarters was picketed for his firing
CHARLIE STRONG sued by 2 black employees - you can find on GOOGLE
50 - 60 Black operators suing MCD for store locations
MCOPCO having 100’s of labor violations well over 500,000.00 MILLION
Read that 1,700 stores were sold last year - that’s a record - I am a betting man & I think we will be higher than that
Lost 2 GM’s to OUTBACK - less pay - open at 10:00 / no PACE to worry about - way less stress
Speaking of PACE - there are close to 15K MCD - which means there will always be close to 5,00O restaurants in the 3rd bucket all the time.
WHATS THE DIFFERENCE FROM #498 in the 1st bucket & #505 in bucket #2
This new blood that MCD are mentioning will not be better operators than life - sweat & tears ran their
store for years.
I can sell them 1 of my 1.8 million stores & see how they do with that
Happy 5th of July
A lot of GREAT comments the past few days
NOA - can we turn this ship around? very, very, many head winds
I would get out tomorrow but I owe to much money to Chase - several of my friends as well
I think someone already mentioned but MCD used RAY’s words quite a bit in the new system that
we will be going to - - whoever did the write up thought that would unite us - words matter
USING RAY’s WORDS IN THIS MCDONALDS CULTURE IS AN OUT RIGHT LIE & IS AN EMBARRASSMENT
TO THOSE THAT CAME BEFORE US
Can’t wait to leave. I am the owner trying to make my TEAM believe in a nightmare
To top it off, the crack technology staff just began some nonsense camp McDonald’s program that began toady. It is basically a complete food give a way for 30 days during the busiest month or the year for no reason. And btw, the site crashed in 5 hours!111
Let NOA lead by messaging to to the stockholder community. There are less than a dozen analysts that cover MCD (there are more, but less than a dozen that are widely known through their open publishing of their notes and their questions on management's investor relations calls).
As Richard has noted, owners need to talk to them. They will keep your identity secret. Its in their interest to do so. If they outed you, no one would ever talk to them and they wouldn't have their finger on the pulse of what is really happening.
Walk an analyst through a business case of a major remodel and lack of ROI, plus the rising tech and other sees, rents, service charges, increased labor and other costs, new taxes (if you are in a blue state, you know what I mean), senseless discounting and the deterioration of the franchise relationship.
Right now management is telling the MCD story for you, and its all rosy BS, with all problems noted above being blamed on owners on the golf course.
Rumor has it that the NOA is considering a vote of "No Confidence" similar to the one passed by the courageous NBMOA. It is essential that every owner join and support the NOA on this. If we can stick together, we can set these wrongs right
#FireChrisK
#FireJoeE
Make McDonalds Great Again!
Another in a LONG line of abuses from Corp on Operators.
I havent seen a golf course in almost a year...too busy working lunch due to lack of crew
People first huh !!! HA! actually… anything but.
I love this blog. I’ve been commenting for years. But I am curious, surely McDonald’s corporate won’t cave on a vote of no confidence. It’s just a PR nightmare for the company. McDonald’s will simply respond something like this “ you know, in a franchise system there are always going to be angst against company and franchisees. PS, (even tho they put their life savings on the line) they are a wealthy group. Also said “ don’t feel bad for them”
A vote of no confidence simply let’s Joe and Chris know that we think they are douchebags. I’m guessing they already know that. And honestly, it’s obvious they feel the same way about operators. Only, there’s way more of us! Let’s vote in no confidence. To be clear, McDonald’s leadership is dog shit.
Warren Buffett has made this comment “ “I try to invest in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.”
In short, thank God that this system runs on the hardworking operators who have more than helped build this great brand. Just because a new leadership team comes into play, McDonald’s will be successful because of us.
It’s a shame Chris, Joe, and the BOD are such low level leaders to acknowledge the heart and soul of this once great brand. If these folks stick around, their names will be infamous in business schools around the world. Perhaps titled, “how to ruin a once great American icon”
Also worth saying, I watch CNBC regularly. Chris K seems to avoid them like the plague. I’m not entirely sure why. Other than, this is a classic example of how one “leader” does not want to take hard questions. Or seriously dislikes being questioned. It really fits with the current narrative. “Do as I say” or you’re gone.
And you know what, at the end of the day, these company folks will walk away with giant sums of money. Because they did “the hard thing” you know, forcing operators out. Forcing remodels, forcing removal of styrofoam cups, mandating price, etc.
Because “their job is on the line” while totally ignoring that our livelihood is absolutely on the line. We guarantee the bank notes. It’s my house used as collateral, to hope for the American dream… but I guess it’s easier to be a corporate drone than to think for yourself and realize how great operators are for their communities.
I hope Joe and Chris read this blog. I hope they have a soul. And good conscious. Ultimately the history books will speak of them. I hope they can course correct before it’s too late.
As someone who has worked on both sides of the system, and has left, I can empathize. The inconsistency from, and at the same time, overbearing relationship the Company has with Operators is destructive, yet the comment, “outmaneuvered by novice adversaries” is sensational, at least - if the adversary is novice, then why are they able to outmaneuver. At the same time, I agree that the Operator base is worn down, to the point where they are also not constructive partners. It’s been that way well before BBV2020, anything new has been a fight from Operators for years. I hear the Operators argument of equity erosion - “Taj Mahal dining rooms” are an expensive mess, and see first hand the Company’s argument of lack of involvement - not that Operators are playing golf all day, but at least in my experience, the Operators showed up on scheduled visits, not actually working the stores. What we should remember is that Ray made the System great by taking middle class, blue collar, hard-working individuals, families, and gave them a path to excel through sweat equity, to move up in the world. The system broke in the 2000s (or maybe earlier) when the Company required reinvestment that was out of reach from small, 3-5 unit Operators that lived and breathed the Brand in their communities. It’s hard with current economics for 10+ unit Operators to spend the money (or time) to work on or worry about anything but reinvestment, debt service, and Company mandates. At the same time, the Operators need to remember, they own their franchise, but they don’t own the System, and it was never built on making net worth outside of a decent, upper middle class life. CFA proves this model works every day - smart corporate strategies that target profit, and operators with a store portfolio that is sized right and lets them grow sales through the most profitable avenue - the community you live and work in. These were crucial components to Ray’s economics, and shame on the Company for losing them along the way. At the same time, Operators need to realize that as well, and the Company realizes it - when they want you to decrease your equity, they literally name it something like, BIGGER BOLDER VISION, and you can’t fall for it on the promise of more stores. Would you be happier running 3-5 locations at 35-40% PAC or 10+ at 0-10% PAC? Long story short, I’d love for the System to be where it was, but not hopeful we’ll get there without significant changes.
If this new policy goes into effect, it will be the beginning of the demise of McDonald's. It is the antithesis of what Ray and Fred wanted
the Franchise to be about. This will be done by the first group of corporate officials not rooted in the McDonald's system.
As a recently approved next gen, I question if I want to carry on my father's 45 year legacy. This is not the same McDonald's system I grew
up knowing and loving. It's sad to say, but as of right now, I hope my son decides to become successful in another field other than
McDonald's. Unfortunately, it doesn't seem like McDonald's would even care to hear this message. They will just take our stores and give
them to someone else. With the constant changes in leadership, legacies don't seem to mean much anymore.
After Easterbrook was fired, for what most Owners believe is more than just violating personnel policies, his destructive path of radically destroying a 60+ year-old world-class culture has continued by a small, temporarily appointed group determined to choose artificially engineering stock maneuvers without fiduciary oversight to the U.S. Owners who bought into a different model of shared partnerships to ensure the success of the entire system of Owners, Suppliers and Company.
The stories and changes have been so extensively covered, and so conspicuously bad, that Owners are leaving in droves given their expectation that there must be a complicit or conveniently narcoleptic Board of Directors. They realize even their own advocacy groups created to help them are impotent against unethical, greedy and Wall Street rather than Main Street driven, regardless of the cost and damage to the Owners. The recent decisions are the biggest charades to the Founder’s model yet, while the “Street” the Board, investors and analysts ignore the assault of the franchisees.
The current erosion of McDonald’s started with the Steve Easterbrook regime, to Chris Kempinski, who is an accidental CEO, due to Easterbrook’s indiscretions, to now Joe Erlinger, equally unprepared to become U.S. President, the company has never been the same. A very small group of Easterbrook recruited, or groomed executives thought they were more of an Equity Investor than business partner as the company was founded.
MCD management should have as their #1 priority preventing the Democrats in Congress from pushing through a new 3.8% federal tax increase onto S corp and LLC incomes. You know, the type of businesses that all franchise owners are.
These. people greedy for our money are calling our income a tax loophole, like we aren’t paying the full personal rate on all of the income. They say it’s passive income, like a hedge fund (where carried interest isn’t taxed as the income it is )-that’s where they should go).
If you own a franchise, what you earn is from actively working and managing the business. It is not passive or unearned. It’s not a mutual fund dividend
.Good luck to management getting us to spend huge amoiunts on the business when we are facing massive cost increases everywhere, and now a punishment from our “representatives” in congress.
Hey, Chris K! PAY ATTENTION!, This is a business. This stuff matters a lot more than everything else that you are focused on. Stop virtue signaling and start lobbying!
MCD management are the Democrats in Congress. And all are followers of the cult of ESG.
.
Every day I thank God I retired from the system in 2014 after almost 30 years.Timing is everything, and I started to see the handwriting on the wall back then. From my first day as an Owner/Operator, I realized that you can't fight the System: it's bigger, wealthier and more cut-throat than you will ever be. I can tell from the above comments that nothing has changed. I truly empathize with all of you! Good luck.
The U.S. SLT's Recalcitrance, Disrespect & Dismissive Negotiations Have Crossed the Line: It is hard to hear the meeting and conversation developments and comprehend how grown professional business leaders can continue to take such unconscionable abuse. The company inherently believes sales results are their leverage, Owner fear of retaliation due to almost enabling past behaviors and lack of more aggressive actions in negotiations have emboldened the MHQ audacious positioning.
We have this all wrong let's celebrate Chris K.'s Birthday.
To celebrate his 54th Birthday have a party in each restaurant to demonstrate or value of him and show how important he is to the McDonald's System. Close every restaurant for the day and have a party for our staff. Let Wall Street know how much we want one day for our staff to not feel the abuse of his power.
September 26. National kempczinski day. Our very own casimir pulaski day.
Post a Comment