December 7, 2011

Restaurant Traffic Flat in 2011

QSRs saw a 1% bump in patrons in the first quarter, year-over-year, 
but then stayed flat for the next two.


LA Times reports HERE


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November 22, 2011

November 6, 2011

McDonald's chief : Curb Spending and Cut Taxes

"We pay some of the highest [corporate] taxes around the world. There needs to
be some levelling."

Ironically spoken by the CEO of the franchise company that charges higher rents
and royalties than any franchised brand in the world.

From the UK Telegraph

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November 5, 2011

The Fight for Fairness in Franchising


"Imagine owning a small business for 20 years, pouring all your time, money and sweat into achieving a decent cash flow and a little equity. Then imagine getting a contract in the mail stipulating that if you want to continue doing business, you must replace thousands of dollars of perfectly good equipment, adjust suppliers or prices or make a dozen other changes that could destroy your bottom line. And if you don't sign, you more or less forfeit your life's work."

Yeah, just Imagine!


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October 25, 2011

BK's $4.99 Chef's Choice



How many expensive burgers can they sell and still have a 99 cent menu?

Or a Dollar Menu?

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October 21, 2011

MCD's Skinner Tells All




On Third Quarter Conference Call

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Does MCD's CFO Decide Menu Prices?

McDonald's already hiked prices twice this year, by 1% in March and 1.4% in May, and will consider more as necessary. “We will continue to evaluate additional price increases in light of this inflationary environment always balancing our goal of driving traffic and marketshare gains with effectively managing the impact of rising costs,” Mr. Bensen said.

Crain's reports HERE

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AP Reports on Operator Remodel Concerns

Results from our survey

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October 1, 2011

Wall Street protest's success not easily measured - WSJ.com

Wall Street protest's success not easily measured - WSJ.com: "They sleep on air mattresses, use Mac laptops and play drums. They go to the bathroom at the local McDonald's. A few times a day, they march down to Wall Street, yelling, "This is what democracy looks like!""

'via Blog this'

August 13, 2011

For McDonald's Operators

We've found a place on the RTS (Restaurant Technology Services) website
where they admit they are a wholly owned subsidiary of McDonald's.

Check it out HERE

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And Now for a Little Politics ...


"If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand."

- Radio Host Dave Ramsey

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August 12, 2011

August 8, 2011

McDonald’s Same-Store Sales Rise 5.1%


Analyst says: “Everybody is raising prices,” Saleh said. “The question
is, ‘Can they raise prices today and see their traffic hold six to eight
months down the road?’”

McDonald’s Same-Store Sales Rise 5.1% on China - Bloomberg:

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August 4, 2011

I'm Just Saying...



The Dow has lost nearly 1,000 points since the Smurfs rang the opening bell
on July 29 in case we're looking to pin this on someone.

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Franchise Equity Group: Our Security Is Bulletproof!




Franchise Equity Group has assembled an impressive E-mail address list of
franchisees and related parties. However, this information is only handled
by myself and no one else ever gets near this information. I do not sell
or rent my E-mail list. Never have, never will.

As always all communications here at Franchise Equity Group are confidential
and the identities of our clients and constituents are never revealed.

That's the nice thing about being a One-Man-Shop.

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Krystal Trying to Sell Itself

Chattanooga-based Krystal chain exploring sale | timesfreepress.com

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Restaurant Industry Tackles Full Plate of Issues

Restaurant industry tackles full plate of issues - MarketWatch

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July 4, 2011

The Convenience Strategy - South Africa Style

McDonald's looks to expand footprint in SA - Business LIVE

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McDonald’s $80,000 Twitter Ad Spend That Failed


While the writer of the article posted below certainly has an attitude
there is something risky about a brand such as McDonald's trying to
develop a Twitter marketing strategy. Imagine if the New York Co-Op
installed a huge digital billboard in Times Square. Then imagine that
anyone, anywhere can use their smart phone to post messages on the
billboard. And, there was no editing or screening of these posted
messages. Can you imagine what would happen?

But that's Twitter. The internet is what it is and people are free to say
whatever they want about any brand. It just shouldn't be happening
on a corporate sponsored site.

McDonald’s $80,000 Twitter Ad Spend That Failed - AllTwitter

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June 29, 2011

Good Quarter for Skinner

So far for the 2nd quarter Jim Skinner exercised options for
100,000 shares of MCD at $40.44 and on the same day sold 131,012
shares for a total sale of $10,044,690.

Jan Fields exercised 63,250 optioned shares priced between
$28.75 and $40.44 and immediately sold them for a total sale of
$5,116,925.

EDGAR reports HERE

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June 22, 2011

Jack in the Box Yanks Toys from Kids' Meals




A very clever move by JIB. They sell few kid's meals so they can make
their larger competitors look like bad guys and subject them to even
more pressure from the food nazis.

Jack in the Box yanks toys from kids' meals | Reuters

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June 13, 2011

Wendy’s/Arby’s to Sell Arby’s to Roark

The more these chain's go through changes in ownership, leadership, and direction the better things will be for the major players that don't go through such trauma.

Wendy’s/Arby’s to Sell Arby’s to Roark, Undoing Peltz Tie-Up - Businessweek

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June 11, 2011

A True Story of How Big Money is Corrupting the Franchising Industry

I've not yet read the book but this is an interesting book review. It mentions the
most important word in franchising - Churning.

Like when a franchise company demands that a franchisee rebuild their landlord's
buildings. No matter what happens to the franchisee the landlord's real estate
empire is improved.

Dunk'd, A True Story of How Big Money is Corrupting the Franchising Industry | BlueMauMau

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June 10, 2011

CNN Qoutes Analyst Mark Kalinoski

Video is HERE
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Chains Moving Away From $1 Price Point



On the $1.00 Burger King Double Cheese:

"Burger King’s new ownership is too smart to want to repeat that
mistake. During its recent earnings call, Burger King EVP-CFO
Daniel Schwartz stressed that the chain’s focus from now on is
to “drive profitable sales.”

BurgerBusiness reports HERE:

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June 9, 2011

June 7, 2011

Crain's - McDonald's tells Australia, We'll Make Better Coffee

This reminds us of something .....
The Arch Deluxe commercials featuring kids turning up their nose
at adult burgers saying words like "Yuk!"

Negative advertising rarely ever works. This too will backfire.


McDonald's tells Australia, We'll make better coffee | Consumer | Crain's Chicago Business

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May 24, 2011

McDonald's Franchise Rewrites


Friends of Franchise Equity Group should watch
their E-mail for our comments on the current
status of the McDonald's Rewrite Policy.

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May 23, 2011

State Franchise Relationship Laws

Interesting article by attorney Mario Herman. His website appears to the right.

"Such statutes may override some provisions contained in franchise agreements regarding termination and non-renewal, by providing that franchisors must give certain "notice" periods and must have "good cause" for terminating and/or not renewing a franchise agreement."

Protection After the Purchase, State Franchise Relationship Laws | BlueMauMau

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54 Store Operator to run McDonald's in Greece

When will "Developmental Licenses" be used in the
USA as they were in the early days of McDonald's?


Times of Malta reports HERE

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May 13, 2011

Just When I Thought I was Out ..... They Pull Me Back In



There's something ironic about a big franchise company hiring an actor who usually plays an organized crime figure to do a TV commercial voice over.

May 8, 2011

McDonald's Revamps Stores to Look Upscale

USA Today says:
"If the new look proves to be a hit, it could redefine America's biggest restaurant chain and nudge competitors at all ends of the spectrum to find some way to respond.

If consumers don't buy in, however, it could become McDonald's $1 billion folly."


Somebody check my math - but at over a million $ per location that's more like
a potential $15 or $20 Billion folly. Pretty soon we're talking about real
franchisee money!

Update - A reader has pointed out there will be several thousand U.S.
locations that will not be candidates for a remodel or rebuild but one
billion is still a very, very low number.




McDonald's revamps stores to look more upscale - USATODAY.com

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May 4, 2011

Dunkin’ Brands Files for $400M IPO




Another coffee brand benefits from McDonald's franchisee
advertising spending in 2009 + 2010.

Dunkin’ Brands files for $400M IPO | Nation's Restaurant News

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Taco Bell Franchisees & Value Messaging

On April 21 Taco Bell Franchise Management Advisory Council (Franmac) President Tom Cook sent a letter to franchisees airing a list of 14 grievances Franmac has with Taco Bell, encouraging franchisees to participate in a Taco Bell Town Hall call. It included the desire to launch an agency review, a complaint about the handling of the infamous Taco Bell beef lawsuit and a point expressing discontent over the fast feeder's "value messaging."

AdAge reports HERE

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April 23, 2011

Seismic Shift in Franchisees Seeking Balance


"Franchisees also want audited disclosures on vendor kickbacks. Kickbacks from a vendor to a franchisor can significantly raise the price of goods to franchisees, and they are typically undisclosed. They act as a hidden royalty fee."


Seismic Shift in Franchisees Seeking Balance | BlueMauMau

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April 21, 2011

Could Some Bankrupt BKs Get Golden Arches?


The Restaurant Finance Monitor

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MCD Execs Sacrifice Operator Margins For Traffic


"We are willing to invest margin in the short term to continue to grow our business
for the long-term," McDonald's Chief Financial Officer Peter Bensen said Thursday
on a conference call.

Some one should tell Pete that the franchisees set the menu prices, or do they?
Easy for him to spout off since there are far fewer McOpCos.


On menu pricing - I keep hearing that McDonald's regional bureaucrats are
urging Operators to "not repeat the mistakes of 2008". Apparently the Operator
is then supposed to hang their head and feel guilty about being opportunistic the
last time we had food inflation.

But this is the usual revisionist history, or a sign of high turnover in the McDonald's
executive ranks. The truth is that 2008 saw some back door increases but that
was also the middle year of three annual Federal minimum wage increases, along
with many state minimums.

I submit raising the minimum wage from $5.15 in June 2007 to $6.55 in July 2008
was the cause of menu price increases far more than food inflation (or greedy
franchisees).

So you might educate the corporate types HERE'S a link to the D.O.L. history :

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McDonald's Raises Food Inflation Predictions


It said it now expects food costs to rise between 4 and 4.5 percent in the United States and Europe this year. In January, McDonald's said it expected its food costs to rise 2 percent to 2.5 percent this year in the United States.


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April 20, 2011

GOLDSTEIN LAW GROUP - National Franchise Law


In this 15 min. video attorney Jeff Goldstein pitches his law firm but
also provides an interesting update on the state of franchise law in
the USA. Worth a watch for any franchisee.

YouTube - Jeff Goldstein GOLDSTEIN LAW GROUP Nat'l Franchise Law

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April 18, 2011

The Birth of Redbox



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Arthur B. Laffer: The 30-Cent Tax Premium - WSJ.com


"as of 2009 the income-tax industry employed "more workers than are employed at the five biggest employers among Fortune 500 companies—more than all the workers at Wal-Mart Stores, United Parcel Service, McDonald's, International Business Machines, and Citigroup combined."

Arthur B. Laffer: The 30-Cent Tax Premium - WSJ.com

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