"Does anybody have the gifts to stand up and say that the absurd app discounting equates to completely unprofitable transactions? The last few days have resulted in 10 percent guest count increases with no sales increases and a rise in base food of over .3 percent to basically give away chicken nuggets and double cheeseburgers. All done to fix their mistakes on faulty McCafé machines and bad supply chain that caused Ecoli…. Can’t wait for the new mcvalue menu!"
Originally posted at: "McDonald's ends year on strange note"
27 comments:
The current McD senior mgmt team is totally inept, and needs to be replaced. Their boneheaded decisions have destroyed the three legged stool and destroyed operator equity, profitability, and morale. The marketing decisions are killing us. Chris and Joe got to go. And the company marketing dept too!
When will a journalist do a story about operator morale being at an all time low? (the NOA has a survey with proof of this I believe. If they dont they need to do a new one). When will a journalist do a story on the destruction of operator equity and corporate cost shifting to licensees? The disintegration of the three leg stool?
AMEN
A journalist must answer one initial question: Does anyone care?
Of course, you care, but why would a reader or viewer care about these issues? With all due respect, few of these issues are newsworthy. When was the last time McDonald's Owner/Operators did something really newsworthy?
I think it was the formation of NOA, which was significant and did a lot to discredit McDonald's corporate management. But that was 2018.
So much about McDonald's is inside baseball. How many paragraphs would a reporter have to burn up explaining the three-legged stool as it applies to McDonald's?
Operator equity? All McDonald's Owner/Operators are rich, haven't you heard?
Take a lesson from your favorite politicians. They don't wait for reporters to call. They go out and create events that bring attention to important issues that interest the public.
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Richard. Where could we find journalists contact info or phone numbers? Could it be posted here? Suggested journalists?
I don't publish anyone's names and information on this blog unless they are already big in the news. Passing around journalists' names might infer something about their interests and I don't speak for them. I can tell you there are no reporters who cover McDonald's specifically. They usually cover an industry such as restaurants or food in general. Many publications (websites) will list the reporter's name, which is often clickable to their profile and frequently an E-mail address. Sometimes, the contact info is at the end of an article. I'd start by paying attention to the WSJ, Restaurant Business, Nation's Restaurant News, etc. I'd also start with brief, constructive comments about a recent story or topic. No long stories or inside baseball stuff (initially).
I haven't asked but the NOA may already be up to speed in this area.
If you have a name but no contact info you might try social media such as "X" or Linkedin..
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many of us believe we are shouldering more than our share of the recovery efforts. In fact, some believe we are subsidizing Mcdonald's P& L.
AND WE ARE!!!!
The TOTALLY USELESS NFLA paid mere lip service to this EXCESSIVE discounting point on its most recent webcast. The feckless NFLA officers merely stated that they "felt our pain", but had nothing in the works to actively address the situation or to challenge the company into the realization that the current path is badly hurting franchisees. Meanwhile, corp continues its love affair with the shareholders, at the expense of the three legged stool. The partnership is dead. And the NFLA is a useless pawn beholden to the company. COWARDS ALL
Since the NFLA wont do it, I hope the NOA chimes in on this.
The aforementioned post starts off with "does anyone have the guts?"
The answer is NO. The company, thru threats, intimidation, and harassment has silenced the voice of the operator. Elected operator leadership is too timid to address or respond.
The press cares about conflict. The Wall Street analysts that write investor notes care about conflict only to the extent that it can move the stock price, which this conflict cannot.
Sort of a no wn either way. Franchising has done such a good job over the the last 7 decades of convincing the public that the brand in one town will be the exact same in another town across the country that the public doesn't care about these restaurants being owned by different local people. They simply cannot fathom that a local person can own a McDonalds. If they do know, they know that you are rich, probably white and just don't care. You need NOA and CFA to lobby. Legislation is your answer
McD has done a masterful job of either marginalizing or getting rid of Owners that will voice opposition. We have "operator leaders" that are more concerned with their own growth than the overall well being of the system. Many positions in the NFLA, FAC, and OPNAD are manned by Owners that only seek personal gain, and could not care less about the overall body.
A few years ago, NBMOA held a member survey vote of "No Confidence" of McD senior management. It passed overwhelmingly. Perhaps it is time for NFLA to do the same? Is anybody listening at NFLA???
Impressive discount and promo numbers hovering around 10 percent month to date. Apparently nobody cares as long as corporate does not bother them. At some point, somebody in leadership needs to step up and say enough is enough.
Yes indeed. Many, if not most, in operator leadership tow the company line for their own personal gain and self aggrandizement, at the expense of the owners they represent. Disgusting.
1000% TRUE
Havent heard much lately about legislative lobbying. What gives?
Sadly, many operators are intimidated by the company and face harassment or retribution if they dont tow the company line. The NOA is the last, best choice to protect your equity and your rights. Why everyone isnt a member astounds me.
This EXCESSIVE DISCOUNTING makes NO SENSE. Run your numbers, and you will find that after figuring the discounts , food and paper costs, marketing costs, 3PO commissions, and McD rent and service fees that YOU ARE LOSING MONEY. And that doesnt even consider labor costs or your overhead costs. OPNAD needs to grow a spine and veto this. Im sure that we are not bringing in substantial numbers of new customers either, we are simply rewarding and trading down existing customers mostly. This is insane!
It makes sense for corp.
Among things to consider:
-Some regular menu items with low daily demand should be dropped. Unless an entre sandwich is regularly generating at least 15% of total traffic for a meal time, drop it. MCD offers five - count 'em FIVE - type of chicken sandwich! Why???
-Stop trying to be Starbucks (SBUX). MCD has an incredible twenty-one types of coffee! And kill CosMcs
-Do "gimmicky" offerings, whether in food products or premium gifts, no more than 30 days and no more than once a year.
-Eliminate the " app specials" that customers exploit (at the cost of other customers), and replace them with more reasonable pricing. It cheapens the perception of our products
Now is a great time to short MCD stock. The panic by the Corp office is sure to knock the stock price down IMO.
I’ve observed firsthand how the app is driving trade-down behavior 30-50% of the time. It’s being used by customers who have already decided to visit us, rather than attracting new ones. This issue is solvable—it could be reduced by as much as 80%—but unless it aligns with McDonald’s priorities, which seem focused on maximizing their cash flow at our expense, nothing will change.
I spoke up about this in a business meeting, addressing field office senior leadership. (I wonder how valued they feel...no office, forced to work at home?) I made it clear that this situation is unsustainable and hurts us short and long term. What followed was eye-opening and demonstrated just how unwilling leadership is to accept dissent. Let’s just say that resistance to their agenda is met with incredible pressure, though not directly aimed at me in this instance.
The fixes are clear, but they won’t happen unless we, as O/O’s, unite for the greater good instead of angling for personal advantage, whether it’s next-gen approval or additional stores. We’re the ones bringing in each dollar, and we have the leverage. If we act in unison, we can reshape the system to work for everyone. Expecting SLT to devise solutions that don’t disproportionately benefit them is futile. They serve their own interests, and their tenure is conditional. They’ve overstayed their welcome.
We need to take back control of the app, the offers, and the decisions that impact our business. Those who know the customers and do the real work—the ones who interact daily and see the outcomes—must lead this charge. Leadership is out of touch. They’re tied up in WebEx meetings and metrics, disconnected from the realities of the customer experience. They are a drain, not a solution.
We already know what works: foam cups drive 5% incremental growth. Beef tallow could set us apart from the competition and even be perceived as a healthier choice in today’s market. Reviving proven products from the past could be a game-changer. But these decisions are being made by people who don’t understand the basics, let alone the nuances of customer satisfaction. They prioritize optics over outcomes.
That’s all I can say for now without compromising myself further. There’s more to tell, but for now, it’s up to us to take the lead.
Thanks to everyone for great discussion! I want to follow up with a few comments:
* Be nicer to the NFLA - As long as McDonald's is a franchise company, there will be an NFLA, a corporate-approved, politically correct advisory group. If the NFLA were to grow a pair of horns and go after McDonald's like a raging bull, McDonald's would just reorganize, rename the group and start over with new people (they've done it before).
On New Year's 2075, McDonald's owners/Operators will be complaining about the NFLA.
However, this makes the existence of an independent Owner/Operator group even more important. The challenge for the NOA is to make sure the Owner/Operator community understands the difference between the two entities and sees the value in two separate groups. First step? Keep them separate.
* Be nastier to OPNAD - They're spending your money. When OPNAD was formed, Lyndon Baynes Johnson was President, and most cars didn't have seat belts. OPNAD should be gutted, examined, questioned, and brought into the 21st century. First step? Question - Should OPNAD even exist?
* Politics - One comment ends with this sentence: "Legislation is your answer". My answer to that is "No, it's not". As described in the NOA's year-end board update, the proper term is "Legislative Engagement."
Many franchisees of all brands wait for lawmakers to pass sweeping legislation that equalizes the relationship between franchisees and franchisors. And yet, all these franchisees willfully signed one-way, non-negotiable franchise agreements that give the franchisor 100% of the power. How can legislation fix that?
Through "Legislative Engagement," franchises can correct some of the obvious abuses, but please don't count on the government to solve all the inherent conflicts in the franchise business.
I do not want to criticize or demean work that the NOA and other McDonald's owners/operators have done in the legislative arena. That's why "engagement" is such a good term; you're doing good work but not trying to change the world.
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BRAVO !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Regarding OPNAD- Has anyone ever noticed how we never get a itemized accounting of how our OPNAD reps vote? It is simply announced that "it passed". This gives the OPNAD reps cover for voting the company line, yet telling the operators back home that they "voted against" a bad program. Same goes for NFLA votes. We need to demand transparency and be informed on how our reps voted!!!!!
Next week launches the outrageous McValue menu with eight items priced at only one dollar!!! Absolute lunacy and totally unprofitable.
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