November 13, 2007

Thompson Comes Clean on CBI Costs

"We want to move from beverage as an accompaniment
to beverages as a destination, said Don Thompson,
president of McDonald's USA.

Well that's a nice goal but it's a "vision" or a
"dream" it's not a business plan and not a business
case.

Thompson goes on to admit that the Operators will
likely spend $100,000 a store for the roll out.


Article from Chicago Tribune

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7 comments:

Richard Adams said...

A few Operators have written to tell us that CBI has been changed to "CBB". Well, Oak Brook bureaucrats don't dictate our terminology here so we'll stick with CBI since this thing only has about a 50/50 chance of going national it's still a test.

Based on the numbers being sold maybe it should be called CBY?

Anonymous said...

its good to see them be a little honest about the costs but the problem is that whenever those guys estimate costs it always comes in to be double what they project. If D.T.
says 100K today that means it will end up at 200K.

Anonymous said...

we lose.they win

michael said...

Is there some contractual requirement that it pass certain test constraints?

Can the franchisees realistically refuse to implement the program, if they think it won't work in their backyard?

Richard Adams said...

Everything in a franchise relationship is
not about the contract.If a franchise
company has to constantly use the
contract as a club the system won't last
very long.

I suppose, in theory, McDonald's could
force the beverage program into every
location but this is an 18 month rollout
and if the products aren't selling in the
test markets the wheels will quickly come
off the project.

As I've written before - this is the first
time in the history of McDonald's where
a new product line was decided on without
true, successful testing. The problem for
management is that they've committed to
Wall Street.

Just as the problems created by "Made
For You" ended the Greenberg regime
this initiative will put the entire
limousine crowd's jobs in jeproady.

So the contract isn't the issue - a lot of
things happen in franchise systems through
good old civil disobedience.

michael said...

You say that they have not tested this product, which requires a capital outlay of 100k.

Why on earth would they deviate from their standard operating practice of testing?

Anonymous said...

hold on to your wallets folks, the useless SET team has caved to corp, corp will now pay less than half of all brick/mortar costs, and no equipment costs. furthermore a $100k drive thru update is going to be required. If you refuse, forget about being rewritten.