The Wall Street Journal reports that McDonald's is "investing about $35 million into marketing for its U.S. business" and "a total of $65 million into supporting franchisees who have lost business."
17 comments:
Anonymous
said...
First, why is it that the media consistently has insight into these actions before franchisees are informed? Has there been a webcast or communication we missed, or is this another example of critical decisions being made without adequate consultation with those directly affected?
Second, the specifics of these financial commitments warrant scrutiny. For instance, does the $65 million pledged include deferred rent or similar concessions that might be spun as benevolent acts? Franchisees deserve clarity on what portion, if any, of these funds are direct financial relief versus temporary adjustments to terms that ultimately benefit corporate interests.
This also brings to mind McDonald’s 2020 pledge to allocate $200 million to help individuals from “underserved” communities achieve franchise ownership. What became of that commitment? Transparency is needed to assess whether those funds were distributed equitably and effectively. Were their customary ROI targets applied to these agreements, or were terms structured to truly empower those operators? Did they structure it in such a way that they benefited at least as much, perhaps more than the underprivileged newly crowned owner operators? Franchisees have a right to understand whether the resources were genuinely deployed to foster opportunity—or simply to create a favorable narrative for corporate PR.
Finally, the recovery efforts following the E. coli crisis, which is unequivocally a brand issue, must be accompanied by clear accounting. If McDonald’s is allocating funds to support franchisees, we need a detailed breakdown of how those funds are being spent, the criteria used to allocate them, and the impact on the broader financial framework between franchisees and corporate.
While $65 million may appear benevolent, in the context of a company now collecting ~19% in rent and royalties, it could easily be interpreted as a carefully calculated PR strategy rather than a genuine commitment to franchisee recovery. Based on prior experience, it’s hard to view these actions as anything other than entirely self-serving.
Accountability and transparency must be prioritized to ensure that these funds genuinely address the needs of franchisees and are not simply another exercise in managing public perception. Franchisees are partners, not passive tenants, (contrary to Myra's speech in Las Vegas in which she told us that is exactly what we are- nothing more than tenants with a 20yr lease) and deserve a full understanding of these decisions.
As evidenced by Myras comments referenced above, and previously by upper management comments such as - "operators are like Uber drivers, easily replaceable", anyone who still believes operators are "partners" is badly mistaken. The company cares only for the stock price and the stockholders, not the owners who run 95% of the stores and make the McD success story possible.
65 Million in advertising discounts on the APP to give away the food we pay for they make it back on time line sales win /win for McD's Corp and no accountability on supplier, Taylor farms ain't going anywhere. If Franchisees were smart enough class action lawsuit seems appropriate for lost business.
The WSJ (or any media) doesn't audit McDonald's books, they can only report what MCD HQ tells them. This is why reporters are always eager to communicate with McDonald's franchisees. Without the Owner/Operator voice there's only one side to any story. This news release by MCD is an attempt to soften the blow when they release fourth quarter results in January '25. .
How does one contact these media reporters? Is it held confidential? Mcd would surely harass and retaliate against a operator who went on the record to the media.
Contacting reporters: The better publications have a link to their E-mail underneath their name or somewhere in their profile. I can find it if you need help. As for confidentiality - good sources are the foundation of a reporter's career. They would be foolish to burn a source by revealing someone's identity without permission. These days, with e-mail, we can confirm that permission or deny it on an ongoing basis. I've been dealing with reporters for many years, and I've never been burned. If I was quoted, it was because I gave my permission - and confirmed it by E-mail. The same goes for dealing with Wall Street analysts. .
"in the context of a company now collecting ~19% in rent and royalties"
Suggestion: Many, if not most, franchise companies collect advertising funds from franchisees directly. It's dictated as part of their franchise agreements. So when we describe the franchise for "Bucket of Chicken Inc," we would list the rent they might pay to the franchisor, the royalties they will pay, and the percentage of sales they will pay for advertising - to the franchisor. OPNAD was founded by Owner/Operators so McDonald's is different. When I describe the McDonald's franchise, I stack the rent percentage, the royalties, and the advertising and promotion percentage required by the franchise agreement. Then, I explain the amount a McDonald's franchisee spends on advertising and promotion far exceeds the amount required by the franchise agreement. .
This announcement by McDonalds of $65,000,000 operator assistance is such a CROCK! The $65 mill is a LOAN with INTEREST, not straight aid or fee forgiveness. So you are simply kicking the bucket down the road and digging yourself even deeper into crushing debt. But of course, the company does not reveal that to the media. Partners? I think NOT!
They can tell the press whatever they want, but let's see what they tell investors.Here's the problem—it is difficult for reporters (and many analysts) to tell the difference between corporate money and Owner/Operator money. Lacking that insight, they will just report, "McDonald's is spending." While that's the truth, it covers up management's shenanigans.The CEO takes advantage of this confusion by throwing around numbers without identifying the source of funds.The only people who can clear this up for the media and investors are Owner/Operators. .
17 comments:
First, why is it that the media consistently has insight into these actions before franchisees are informed? Has there been a webcast or communication we missed, or is this another example of critical decisions being made without adequate consultation with those directly affected?
Second, the specifics of these financial commitments warrant scrutiny. For instance, does the $65 million pledged include deferred rent or similar concessions that might be spun as benevolent acts? Franchisees deserve clarity on what portion, if any, of these funds are direct financial relief versus temporary adjustments to terms that ultimately benefit corporate interests.
This also brings to mind McDonald’s 2020 pledge to allocate $200 million to help individuals from “underserved” communities achieve franchise ownership. What became of that commitment? Transparency is needed to assess whether those funds were distributed equitably and effectively. Were their customary ROI targets applied to these agreements, or were terms structured to truly empower those operators? Did they structure it in such a way that they benefited at least as much, perhaps more than the underprivileged newly crowned owner operators? Franchisees have a right to understand whether the resources were genuinely deployed to foster opportunity—or simply to create a favorable narrative for corporate PR.
Finally, the recovery efforts following the E. coli crisis, which is unequivocally a brand issue, must be accompanied by clear accounting. If McDonald’s is allocating funds to support franchisees, we need a detailed breakdown of how those funds are being spent, the criteria used to allocate them, and the impact on the broader financial framework between franchisees and corporate.
While $65 million may appear benevolent, in the context of a company now collecting ~19% in rent and royalties, it could easily be interpreted as a carefully calculated PR strategy rather than a genuine commitment to franchisee recovery. Based on prior experience, it’s hard to view these actions as anything other than entirely self-serving.
Accountability and transparency must be prioritized to ensure that these funds genuinely address the needs of franchisees and are not simply another exercise in managing public perception. Franchisees are partners, not passive tenants, (contrary to Myra's speech in Las Vegas in which she told us that is exactly what we are- nothing more than tenants with a 20yr lease) and deserve a full understanding of these decisions.
$65 million???? My sales took a 19% hit, aid from McD is nowhere to be found.
More corporate window dressing. All talk. Not a dimes worth of help coming my way.
As evidenced by Myras comments referenced above, and previously by upper management comments such as - "operators are like Uber drivers, easily replaceable", anyone who still believes operators are "partners" is badly mistaken. The company cares only for the stock price and the stockholders, not the owners who run 95% of the stores and make the McD success story possible.
How much of that $35,000,000.00 is OPNAD money, not corporate????????
Please list the destinations of the "$65 million", Joe. (crickets)
65 Million in advertising discounts on the APP to give away the food we pay for they make it back on time line sales win /win for McD's Corp and no accountability on supplier, Taylor farms ain't going anywhere. If Franchisees were smart enough class action lawsuit seems appropriate for lost business.
They spend OUR money (ad dollars) and THEY take credit for it! What a SCAM!!!
"Marketing" equals "Discounting". One trick pony here.
Puff piece. Self serving Mcd misdirection. Surprised WSJ fell for it.
The WSJ (or any media) doesn't audit McDonald's books, they can only report what MCD HQ tells them. This is why reporters are always eager to communicate with McDonald's franchisees. Without the Owner/Operator voice there's only one side to any story. This news release by MCD is an attempt to soften the blow when they release fourth quarter results in January '25.
.
How does one contact these media reporters? Is it held confidential? Mcd would surely harass and retaliate against a operator who went on the record to the media.
MCD dictated a offer on the app of a ten piece nuggett for $1. TOTAL MONEY LOSER. Did OPNAD vote on this?
Contacting reporters: The better publications have a link to their E-mail underneath their name or somewhere in their profile. I can find it if you need help. As for confidentiality - good sources are the foundation of a reporter's career. They would be foolish to burn a source by revealing someone's identity without permission. These days, with e-mail, we can confirm that permission or deny it on an ongoing basis. I've been dealing with reporters for many years, and I've never been burned. If I was quoted, it was because I gave my permission - and confirmed it by E-mail. The same goes for dealing with Wall Street analysts.
.
"in the context of a company now collecting ~19% in rent and royalties"
Suggestion: Many, if not most, franchise companies collect advertising funds from franchisees directly. It's dictated as part of their franchise agreements. So when we describe the franchise for "Bucket of Chicken Inc," we would list the rent they might pay to the franchisor, the royalties they will pay, and the percentage of sales they will pay for advertising - to the franchisor. OPNAD was founded by Owner/Operators so McDonald's is different. When I describe the McDonald's franchise, I stack the rent percentage, the royalties, and the advertising and promotion percentage required by the franchise agreement. Then, I explain the amount a McDonald's franchisee spends on advertising and promotion far exceeds the amount required by the franchise agreement.
.
This announcement by McDonalds of $65,000,000 operator assistance is such a CROCK! The $65 mill is a LOAN with INTEREST, not straight aid or fee forgiveness. So you are simply kicking the bucket down the road and digging yourself even deeper into crushing debt. But of course, the company does not reveal that to the media. Partners? I think NOT!
They can tell the press whatever they want, but let's see what they tell investors.Here's the problem—it is difficult for reporters (and many analysts) to tell the difference between corporate money and Owner/Operator money. Lacking that insight, they will just report, "McDonald's is spending." While that's the truth, it covers up management's shenanigans.The CEO takes advantage of this confusion by throwing around numbers without identifying the source of funds.The only people who can clear this up for the media and investors are Owner/Operators.
.
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