about a McDonald's executive. Almost every change
they credit to Dillon was in the works before she came
over to McDonald's but this is resume building so the
March 27, 2007
March 18, 2007
March 13, 2007
Website Impaired
Last week I posted a note about having trouble using
the "Morning Impaired" website built by Moroch. A few
days later I got a helpful E-mail form Moroch asking
questions about my experience.
It was suggested that I upgrade to "Flash 9" for Internet
Explorer. The website now works fine with either of
my browsers.
Maybe it's just me but there is a real chance that these
websites can be "over-engineered". If the site requires
the latest and greatest of hardware and software (and
Internet expertise) you are going to reach a pretty
limited audience.
If it's a video game promotion you might find most of
your target market is up to speed on all things Internet.
But, for a broad based promotion like Breakfast the
website needs to be usable by the middle-aged
suburbanite with a four year old computer.
In my humble opinion.
.
.
March 12, 2007
Pepsi's Toehold in McDonald's
AdAge covers the test of bottled and
canned beverages. Owner/Operators
should note that an industry expert
confirms that fountain drinks are four
to five times more profitable than
bottles and cans.
How many millions will Operators
spend advertising a less profitable menu
offering?
AdAge article is Here
.
canned beverages. Owner/Operators
should note that an industry expert
confirms that fountain drinks are four
to five times more profitable than
bottles and cans.
How many millions will Operators
spend advertising a less profitable menu
offering?
AdAge article is Here
.
March 7, 2007
Sharing "Risks and Rewards"
McDonald's Operators should check their copy of the
NLC headlines from the February 20 - 23, 2007 meeting..
There's a phrase used therein that should be expunged
from the McDonald's vernacular.
Co-Investment - "Sharing Risks and Rewards"
I'm sure the Oak Brook boys love that phrase and a few
politically correct Operators think it sounds clever - but
it's vacuous and disingenuous.
There can be no sharing of "Risk" when MCD Corp. has
nearly infinite assets and cash.
When an Operator runs the daily risk of being overleveraged
and is personally responsible for millions in debt there can be
There's a phrase used therein that should be expunged
from the McDonald's vernacular.
Co-Investment - "Sharing Risks and Rewards"
I'm sure the Oak Brook boys love that phrase and a few
politically correct Operators think it sounds clever - but
it's vacuous and disingenuous.
There can be no sharing of "Risk" when MCD Corp. has
nearly infinite assets and cash.
When an Operator runs the daily risk of being overleveraged
and is personally responsible for millions in debt there can be
no "sharing" with a company with an enterprise value of
$58 Billion.
And corporate executives who use this term are completely
insulated from any financial risk caused by their decisions.
The risk on the McDonald's Corporate side happens when an
Operator gets upside down they have to go through the trouble
of taking over the store(s), raising the rent and royalties, and
reselling the store for a profit. That's not much of a risk - more
of an upside.
And when an Operator leaves the system the more debt they
have (and the less equity) the better is for MCD. All that debt
will be paid off by the sale of the store(s), the net to the seller
will be reduced, and the assets stay in the MCD system.
The only real risk to MCD is that all this remodeling and
rebuilding of the MCD real estate portfolio might someday
cause some hard questions to be asked about System Capital
Corporation.
But a financial risk? ... That's 100% on the Owner/Operator
side of the equation.
.
And corporate executives who use this term are completely
insulated from any financial risk caused by their decisions.
The risk on the McDonald's Corporate side happens when an
Operator gets upside down they have to go through the trouble
of taking over the store(s), raising the rent and royalties, and
reselling the store for a profit. That's not much of a risk - more
of an upside.
And when an Operator leaves the system the more debt they
have (and the less equity) the better is for MCD. All that debt
will be paid off by the sale of the store(s), the net to the seller
will be reduced, and the assets stay in the MCD system.
The only real risk to MCD is that all this remodeling and
rebuilding of the MCD real estate portfolio might someday
cause some hard questions to be asked about System Capital
Corporation.
But a financial risk? ... That's 100% on the Owner/Operator
side of the equation.
.
March 6, 2007
Story of Two Rebuilds
Here's a rebuild a McDonald's veteran can support - because:
A) The store was 50 years old so it was one of the original
buildings that were designed for the Southern Californian desert
and not for Connecticut. It was probably very, very worn out.
B) The building design identifies the location as a McDonald's
and not a Panera Bread or a dentist's office. This building is
a true billboard for the business.
On the other hand - here's a rebuild done on the Oak Brook plan.
The building dates to 1974 making it the "D series" that served
well until the 1990s and thousands are still out there humming
along. And the design of the new store is the new generic design.
along. And the design of the new store is the new generic design.
Rebuilds like this are a risky venture for the Operator but a great
deal for the real estate portfolio of System Capital Corporation.