July 15, 2008

But the Ribs Were Great!

I spent a few days last week in the Heart of America
Co-Op (Kansas City) trying again to evaluate the service
impacts of McCafe. Fortunately the market is now selling
so few Specialty Coffees that I can report there are no
negative impacts on service.

For the week ending 6/26/08 the market's weekly units
were 217 - lowest since the launch on 10/18/07.

Obviously the Heart of America Co-Op needs to spend
more money advertising McCafe.

Remember that Kansas City is the most mature market in
the country with the full beverage cell remodel. The larger,
long term test, has been in Michigan which did not roll
with the beverage cell. However, the remodel is now being
forced on Michigan Owner/Operators even though the region
is only selling 234 specialty coffees a week.


July 8, 2008

Some QSR CEOs Know What They are Doing

The CEO of Carl's Jr parent criticizes dollar menus

"When you lock yourself into a price point,
you're screwing up your future because commodity
costs are going to increase," Puzder said in an
interview with Reuters Wednesday.


July 6, 2008

Coffee Jitters

So Starbucks is closing 600 stores?

And the business media is
running around trying to
answer the question, "What's
wrong at Starbucks?"

There's nothing wrong at Starbucks - they just built
too many stores - proving there is a limit to the
specialty coffee market.

This is a replay of what happened at McDonald's in the
1990s. Trying to impress Wall Street McDonald's
management launched the Convenience Strategy and
built a few thousand unnecessary stores. Same store sales
fell and the world asked "What's wrong at McDonald's?"

Oak Brook had a ready answer. They simply blamed
everything on McDonald's franchisees, never admitting
they'd built too many stores.

At Starbucks there are few franchisees to blame so
management has to take real responsibility for their


To OPNAD or not to OPNAD?

There are lots of comments here about OPNAD and it's a
common topic when Operators discuss profitability and
pricing. But, too often OPNAD is lumped in with the NLC,
SET, NSLC and other "Leadership" groups as though OPNAD
is just another part of the corporate structure.

That's the wrong way to think about OPNAD.

OPNAD is a "Voluntary" organization and you if you
don't look at it that way you might want to re-read the
advertising section of your franchise agreement(s).

From the McDonald's corporate website:

"In addition, through a voluntary U.S. cooperative of
McDonald's Owner/Operators known as the Operator's National
Advertising (OPNAD) Fund, the Company and its Owner/Operators
combine to purchase national television advertising. "

(See the page HERE)