Coalition of Franchisee Associations

December 16, 2010

Best Tweet of the Week

TV's Andy Levy says: Nothing says "I'm an unfit mother"
quite like suing McDonald's over Happy Meals



December 10, 2010

Subprime Time at McDonald's?

I recently had a conversation with a McDonald's Operator who also
worked in the McDonald's franchising department in the 1980s. We
were remembering the implementation of the "25% Down" policy for
Operators who open new or buy existing McDonald's stores.

This policy had multiple purposes but the most publicly discussed
was to give the buyer some flexibility if the business took a down -
turn for any reason (impact, road closure, local economy, etc.).

Is that same concern alive today? Store resale values have been
decimated by mandated rebuilding but when Operators are forced
into borrowing million$ to remodel or rebuild McDonald's real
estate ... is it all based on rosy projections or does anyone
worry about possible hard times?

We usually think of this kind of possibility as a threat to smaller
Operators but Operators with a large number of stores are at risk
because of the number of concurrent capital projects.


MCD Shareholders Hard to Please

McDonald's USA November same store sales came in at a
strong + 4.9% but investors were expecting more from
international markets.

One reason domestic sales were good is that the USA was
down 0.6% in November 2009 because of the advertising
wasted on espresso McCafe drinks.

Things will get interesting in March of 2011 when MCD USA
will be two years from the introduction of McCafe and will
be up against good comps for the rest of 2011.

Forbes reports: Not Much For Ronald To Smile About


December 2, 2010

SCC Buys MCD Real Estate with Fed $$$ ?

Since I'm one of the few people (outside of
Oak Brook IL) who knows anything about the
underground real estate and finance arm of
McDonald's Corporation I found the news that
broke this week both interesting and amusing.

In articles such as THIS ONE it was reported
that McDonald's was a recipient of government
funds in the Federal Reserve’s emergency
lending during the financial crisis.

Oak Brook was quick to release a statement

“McDonald’s Corporation was erroneously listed
by the Federal Reserve Bank as a recipient of
federal funds during the financial crisis of 2008.
McDonald's Corporation did not issue commercial
paper as a participant in the Commercial Paper
Funding Facility(CPFF). We believe the reason
for the error is that McDonald’s Corporation is
inaccurately listed as the parent/sponsor company
of Golden Funding Corporation, an independently-
owned company which did receive federal funding
during this period.”

Well...that's not entirely true. At least not to those
of us who refuse to consider the major suppliers to
McDonald's "independent companies". Golden Funding is
Golden Mac and is one arm of the vast System Capital
Corporation empire set up in the 1990s by McDonald's
and six of the major suppliers.

I find it entertaining to see how nervous Oak Brook
gets when anyone asks about what System Capital owns
or what it does.

But to call it "independent"?
I don't think so.


November 11, 2010

It's the Lease We Can Do

We are still gathering feedback
on changing the policy whereby
McDonald's Operators pay to
remodel or rebuild their
landlord's building. If you have any comments on the previous discussion please send them to the E-mail address listed to the right of this page.


November 10, 2010

QSR Mag on Franchise Litigation

On lawsuits over "approved vendors" an obscure franchise
consultant states:

“Such disputes often rise from franchisees’ suspicions that the franchisor is getting kickbacks or other profits from approved supplies and suppliers. Much of this distrust can be prevented with complete transparency in all the franchisor’s business relationships and income streams. This includes, as much as possible, disclosure of off-the-books income of the franchisor’s executives.”

QSR Magazine article is HERE


November 5, 2010

McCafe Advertising Still Building Sales at Starbucks

The traffic increase was particularly strong in U.S. Starbucks stores, where 6 percent more people came in and each spent 2 percent more, on average, than a year earlier. (WSJ)


Peak Hour Performance

I've been hearing a lot about lunch
peak hour at McDonald's. However,
there does not appear to be much
Mcmanagement concern about menu

As a McD veteran I see frustration on the faces of McDonald's
crew and management trying to handle a menu growing to infinity
and beyond. And, as a customer I am victimized by other confused
customers who take forever ordering either because the menu is
too complicated or the menu board is complicated.

Since so many McDonald's executives lack operations experience
(or have conveniently forgotten what they once knew) the only
solution to this problem is franchisee activism. There was once an
Operator group that dealt with such in-store challenges.

It was called the NOAB.
Ah ... good times!


November 4, 2010

Caution - Food Inflation Next Decade

Investors are counting on food inflation to
increase revenues to franchised restaurant
companies in 2011. Not the restaurants - just
the corporate side.

But can QSRs raise prices any further now that
all major brands have a value menu? Can Operators
sell $5.00 sandwiches? Is America ready for $8.00
"value meals"?

Sorry, but not me. I'm buying $3.00 meals on the
Dollar Menu!

The WSJ reports on food prices HERE


November 2, 2010

McRib Commercial

The McRib commercial with the father who has to
put on his babie's bib is one of the best McDonald's
ads ever.


October 29, 2010

Entrepreneurship is ...

"Entrepreneurship is about disruption, changing the world order and doing things no one else thought possible."

--Shaun Rein, founder of the China Market Research Group, writing in Forbes


October 1, 2010

Marfrig Completes Purchse of Keystone Foods

Marfrig the supplier of chicken nuggets, hamburgers and other meat products to McDonald’s, sandwich-shop chain Subway Restaurants, Yum! Brands Inc. and Campbell Soup Co. in 13 countries including the U.S.

Article is HERE


September 22, 2010

McCafe Espresso in England?

How many millions will MCD corporate waste in the U.K.
trying to sell a product that has failed in the USA?

How many millions of pounds sterling will U.K. franchisees waste?


September 21, 2010

Rebuilding Your Landlord's Building?

Now here's a rebuild that probably
needed to happen. This Green Bay
store was built in 1958 and was
Ray Kroc's unit # 91.

But that still does not mean that it
makes sense for the Owner/Operator
to pay for the rebuilding of a building
owned by McDonald's Corporation.
As we've written before:

"When the early remodeling policies were developed McDonald's did not
hold vast amounts of real estate equity in secret subsidiaries . Today the
McDonald's real estate empire is an "off the books" operation with no
disclosure and is based largely on myth. When Operators pay to improve
these properties any increases in value will accrue to the "off the books"
owners, not to shareholders, and certainly not to Owner/Operators. These
billions in real estate equity will remain safe from prying eyes and
available for "off the books" manipulation."

Article is HERE


September 17, 2010

Don't Ever Trust Social Media Numbers

As evidenced by this article contradicting
the numbers in a McDonald's internet promotion.

If you give away enough food every promotion
will "appear" to work. Article is HERE


Confusion Over The Confusion at Starbucks

Can you get a "Tall" or not?

Good points here about Drive-Thru menu clutter


September 16, 2010

Who Pays to Improve McDonald Real Estate?

Meet the man who is designing ways to spend what's left
of McDonald's Operator Equity

Fast Company REPORTS


September 15, 2010

September 9, 2010

September 6, 2010

Are You Entrepreneur Enough to Have Equity?..... Part Two

Friends of Franchise Equity Group Should watch your E-mail
for the second of three installments expressing our opinion
about the changing equity position of McDonald's franchisees.


One SanFran MCD Eliminates Dollar Menu

Homeless Hippies Outraged


September 4, 2010

Avoid These Office Buzzwords

This article misses two of the most obnoxious:

"Learnings" & "Holistic"

Moneywatch Reports


August 31, 2010

Attorney Eric Karp writes on the BK Double Cheese

"Burger King's decision to implement the promotion in the fall of 2009 marked the first time that it had imposed a maximum price on its franchisees without obtaining their majority consent, the franchise community having twice voted against it."

Article is HERE


July 20, 2010

Hot Deal on Espresso Machines

It's great that smoothies are doing well at
McDonald's but nineteen McCafe drinks a day?
That's just sad!

It's too late to return those expensive machines to the manufacturer but it's not too early to think about selling them on eBay.

For a modest fee of $25 Franchise Equity Group will coordinate the listing and sale of your McDonald's espresso machine on eBay. Please inquire by E-mail.


U.S. Restaurant Count Continues to Fall

Independents closed the most locations


July 13, 2010

Can MCD Execs Become Restaurateurs?

Now Mike Roberts and one of his lackeys are
attempting starting a restaurant chain

Article is HERE


July 10, 2010

Rush Limbaugh Gives Skinner "Shout Out"

I'm thinking this will really irritate
all the liberals working in Oak Brook!

Limbaugh's website is HERE


More on Tom & Eddie's

"The one-time architect of McDonald's Corp.'s Arch Deluxe is
launching a new, high-end burger chain."

Crain's reports HERE


June 30, 2010

Whatever Happened to "Simplification" ?

After reading the following article corporate types
will run down to their local 7-11 and make a list of
what's being sold and try to copy the different

How about if, instead, they concentrate of refining
the service advantages that QSRs have over C-Stores.


Simplify the operation by reducing the numbers of
things on the menu board that sell only a few a day?

A QSR cannot increase sales in their "Peak Hour"
by trying to be all things to all people.

Reuters Reports HERE


June 24, 2010

BK Breakfast?

Burger King exec says breakfast sales are great but he was speaking
to an investor conference so chances are it's not entirely true.



June 23, 2010

Tax Planning for This Year and Next

My real understanding of Supply Side Economics was from a
speech by the late Senator Jack Kemp at a "Newman Meeting"
in the 1980s.

Senator Kemp was espousing the philosophies of economist
Arthur Laffer, a member of the Reagan administration.

A column by Laffer appeared in the Wall Street Journal this
week with his predictions for late 2010 and 2011 considering
the impact of coming tax hikes.

A link is posted below - warning - this is not uplifting
reading but it might help with some planning.

Art Laffer is HERE


Clueless Wendy's Franchisees Surprised Their Company is a Takeover Target

An article criticizing Wendy's franchisee organization for not paying more
attention to how the parent company was doing is HERE


June 13, 2010

McDonald's & "Restaurant Technology Services"

McDonald's is entering a third cultural phase:

In the early years vendors were kept at arms
length. In the 1980s and 1990s the second
generation of McDonald's management was
unable to resist the temptation to skim
income from the supply chain. But at least
they tried to do it secretly, under the
table, behind franchises' backs.

With the establishment of Restaurant Technology
Services it's obvious there is no longer any concern
about what franchisees think. And, as supplier/vendor
to the franchised system McDonald's is obviously not
worried about potential legal issues.

In the long history of franchising this issue has created
more conflict than any other. It would be productive if
McDonald's franchisees could get out in front of this
third cultural phase.


June 5, 2010

Secretive Companies

It's always frustrating when I'm asked about one of the
McDonald's vendors and can't provide information beucase
most of these vendors are privately held and have no
disclosure or transparency requirements.

So it's rewarding when a McDonald's executive admits that
vendors such as SEI and VSI are subsidiaries of McDonald's.
I'm told I should refer MCD O/Os to Jim Sappington's e-mail
of May 18, 2010 in which he discusses McDonald's technology


May 16, 2010

USA Today on McCafe

Owner/Operators interviewed in related video


Have it Whose Way?

Our friend Richard Gibson has been covering Burger King
for several decades.

Writing in the Wall Street Journal he covers the chain's
continued struggles with franchisees.

"Have it Whose Way?" is HERE


May 3, 2010

A Word to the Pies

The third-generation owner of the Bama Companies has become a prolific writer and speaker on business issues. She speaks out against excessive CEO pay. No word on how she feels about Skinner making $18 million a year but considering she's a McDonald's supplier I bet she's OK with that kind of compensation.

Interview on FOX with Paula Marshall is HERE


April 28, 2010

How Jim Skinner Beat the Recession

If McDonald's Owner/Operators want to know what they think about endless reinvestment requirements Jan Fields and Don Armstrong take care of it for you in QSR Magazine.



April 18, 2010

McDonald's Franchisee Rights

Attorney Jeff Goldstein commented on one
of our posts and I followed it up with an
acerbic posting - Join the Discussion!



April 2, 2010

AdAge on BK $1 Menu

The solution for McDonald's Owner/operators?
Keep your speed of service advantage in Drive-Thru
that you have over Burger King.

Article is HERE


March 17, 2010

So Much For Profits on the Dollar Menu !

What ever happened to the idea that the
$1.00 menu made sense because of the add-on
profits of drinks and fries?

Dow Jones Reports


March 5, 2010

BK's Largest Operator Says .....

Officials of Carrols Restaurant Group, owner of 312 Burger Kings,
discusses problems with "extreme affordability" strategy.

In QSR Magazine


February 19, 2010

Bloomberg / Germany

We don't normally send out attached files but made
an exception today and sent around copies of an
article from Bloomberg/Germany. This went to our
regular E-mail distribution list. If you have any
problems opening these files please respond here.


Jack in the Box to Improve Coffee?

Notes from the JACK conference call


February 17, 2010

Breakfast Average Check

Is everyone watching their numbers? One of the largest
Co-Ops in the country showed a $.39 decrease in breakfast
average check for the first week of February with a 3.1%
increase in breakfast sales and a 10.9% increase in TCs.

Of course these are numbers provided by the region so
the decline in the average check could be worse or your
mileage may vary.

If the new catch phrase is "Customer Recovery" that fall
in the average check might show there are some customers
you just can't afford to recover.


January 21, 2010


We are attempting to
compile a list of McDonald's
Owner/Operators who are
NOT members of the voluntary
advertising fund called OPNAD.

If you possess such information please respond to:


Wall Street Loves Starbucks again

Thanks McDonald's !

"Starbucks turnaround is nothing less than remarkable," wrote Deutsche analyst Marc Greenberg."