May 18, 2018

"Leaks" in the McDonald's System

Apparently the nasty-graham McDonald's Operators received from McDonald's USA legal several weeks ago claimed that communicating with others gave some possible advantage 
to "our competition".

In other words, McDonald's Operators leak proprietary information. Nothing could be further from the truth.

If there are leaks in the McDonald's system - Many of the leaks come from McDonald's upper management during discussions with Wall Street analysts.

Case in point, is it any wonder that McDonald's major competitors were ready to launch new value platforms at the same time McDonald's USA launched the $123 menu? McDonald's management had been publicly blabbing about the new menu during much of the fall of 2017.

Prior to launch the analysts knew more about the $123 menu than McDonald's Operators.

The rest of the leaks in the McDonald's system come from employees of McDonald's outside advertising agencies and PR firms.

These people are loyal to no one and are always networking for their next job. It's important they establish connections with reporters who cover the advertising business. They sing like birds.

So Operator leaking is not the problem. Trying to impress shareholders and disloyalty among agency people is the problem.

May 17, 2018

McDonald's Needs This Guy

"We’ve been saying for a long time that it’s not sustainable."

"they’re hurting the profits of the operators responsible for
running the restaurants."

Jack in the Box CEO Lenny Comma takes a shot at QSR discounting

May 12, 2018

Franchisee and Franchisor Attorneys

Attorney Jeff Goldstein lists his best competitors

"Last, I note that I have always held the very strong belief that franchisees should use 
attorneys who represent only franchisees and dealers, and who do not represent both franchisors and franchisees (or who represent only franchisors). I have written extensively about what I view to be the inherent conflicts in such dual-representation, and how such 
dual-representation is counterproductive to the overall mission of franchisees and dealers. "
Jeff Goldstein

May 11, 2018

Thoughts on McBullying

We've had a week to discuss the nasty-gram from Oak Brook about franchisees working with Wall Street analysts and others concerning their business.

After everything I've heard about this memo, I have one word - nonsense.

Franchisees and analysts communicate all the time - not enough - but all the time. And analysts love to boast about these communications in the reports they publish. They don't name names, the term is "channel checks".

Please keep in mind that sell-side analysts live in a very regulated world. We all skip over the last few pages of the typical sell-side report because they contain the fine print "disclosures and disclaimers" related to the report.

If working with franchisees was in any way inappropriate or illegal no analyst would mention franchisees in their reports.

Buy-side analysts are always looking for franchisees to talk with and research firms such as the two listed in the column to the right don't understand if a franchisee declines to join in their work.

Here's fun example: Carrols, a publicly held company (NASDAQ:TAST), is the largest Burger King franchisee with over 800 stores. They issue earnings reports and conduct investor conference calls just like McDonald's. They communicate directly with analysts and investors about their franchised business and are required to do so. Does Carrols get letters like this from Burger King Corporate? I don't think so.

As you can tell, there are no hard and fast rules for this type of communications and people who work in Oak Brook don't write the rules.

Speaking of Oak Brookers, I think this memo was written by a team lead by the contemptible Robert Gibbs and the general counsel of McDonald's USA was made to sign it in hopes of making it more intimidating.

I can't give McDonald's Operators legal advice but I can encourage you to reread the memo a couple of times. I'm told it's full of words like "can result", "may", "may constitute", "proper channels", "unnecessary distraction". All in all, pretty nebulous stuff.

As the McDonald's Operator community comes under more stress in the future you can expect more of this McBullying.