August 30, 2012

New McDonald's Locations

We've posted an opinion piece concerning the development of new McDonald's
stores in the United States. At the top of our homepage, in the black bar below the
pretty picture, click on "Was McDonald's USA Saturated 15 Years Ago?"

'The Economy Stole My Retirement'

'The Economy Stole My Retirement' -

August 27, 2012

Beef Herd Tumbles to 40-Year Low

"The slide in output may not stop until 2016 or 2017, Rachel J. Johnson, a USDA livestock economist, wrote in an Aug. 16 report. Once the herd starts to expand, it takes more than two years to boost supplies, according to Ron Plain, a livestock economist at the University of Missouri. Calves have a nine- month gestation period and take about 20 months to reach slaughter weight, he said."

Beef herd tumbles to 40-Year low on feed cost surge -

August 24, 2012

Analysis of Don Thompson

"McDonald's is increasingly positioning itself as the Wal-Mart of fast food, using its unmatched power in raw material procurement and passing on the scale advantage to customers by outpricing its competitors. This might work against McDonald's to an extent, as customers learn to see the company as very low-tier and move to better restaurants when the times get better."

Seeking Alpha Speculates HERE

McDonald's Sales Vs. Other Brands - NRN

August 23, 2012

The Franchisee Lawsuit Makes A Comeback

From Restaurant Finance Monitor

For Steak Lovers

This article is about high-end steaks but contains a lot of good information about
the cattle market.

"Droughts often mean higher prices for prime meat a season or more later. Smaller herds
yield fewer calves, which take 14 to 18 months to reach slaughtering weight. The high
cattle prices that are expected to follow will make it hard for ranchers who walk away
now to return to cattle"

Bloomberg reports HERE

August 18, 2012

Restaurant Traffic Flat Through 2013?

Restaurant traffic loses momentum, will be flat through 2013 -

Burger King Sells 121 Units to Franchisee

There are two reasons Burger King will not be a long term treat to McDonald's
or even Wendy's.

1) The franchisees keep getting larger and larger, operating hundreds of restaurants
spread over multiple states.

2) Burger King's investors are cutting the corporate side down to a husk.

In five years we will no longer be talking about Burger King as a major QSR player.

Burger King sells 121 units to franchisee |

August 12, 2012

If We Could Talk to the Analysts, Just Imagine It!

I've come across a few friends who have not noticed one of our sub-pages titled
"The Real Franchise Stakeholders". Just click on that title in the black bar at the
top of this page. Let me know what you think!

August 7, 2012

McDonald's Monster Margins

"As you can see, the Big Mac maker's 20% net margin is more than three times the 
same figure for the restaurant industry and almost twice that of the average company 
on the Dow Jones Industrial Average"

McDonald's Monster Margins - DailyFinance:

Mitt Romney + His Dad + McDonald’s

This article spells Ray Kroc's name wrong but it's a good story

From the Washington Wire

August 6, 2012

Tyson Cuts Forecasts After Drought Increases Feed Costs

“While we ultimately expect to pass along rising input costs, these costs, coupled with continued soft demand, are likely to pressure earnings in 2013.”

Tyson Cuts Forecasts After Drought Increases Feed Costs - Businessweek:


August 4, 2012

Small Firms See Pain in Health Care Law

"franchisees are looking at ways to avoid the requirement by cutting workers'
schedules so they work fewer than 30 hours a week—the law's definition of a
part-time worker —since only full-time workers are counted toward the insurance
coverage requirement."

"A question for franchisees is whether the federal government will count their
employees based on the combined number at all their outlets or treat each outlet as
a separate business."

WSJ Reports HERE

August 3, 2012

Combo Meals Down By A Billion

For several years, speaking as a customer, I've been commenting that McDonald's
food has gotten too expensive relative to the avalible value offerings. I know
there have been changes to the Dollar Menu but then offers like the $1.00 drink
come along. This summer I've enjoyed my $1.00 ice tea and an item or two off the
Dollar Menu. My average check is always $3.00 or less.

Time magazine is reporting on data from the NPD Group that says sales of larger
combo meals have decreased 12% over the past five years.

NPD restaurant industry analyst Bonnie Riggs says, “The number-one reason
they said they stopped is that the dollar menu is a better deal.” Customers who
used to buy combo meals but don’t anymore discovered that “you can ‘bundle’
from the value menu and it is a cheaper price.”

The point? As long as I can build a meal for $3.00 or $4.00 there's no way I'm
paying  $6.00 or $7.00. The McDouble is an excellent sandwich and the McChicken
is a nice change of pace. I don't think I've had a Big Mac yet this year and I know
I haven't had a QPC - but on many occasions I've eaten two McDoubles.

Again, as a customer, I'll show up in many McDonald's restaurant's customer counts
but not at the bottom of the P&L.

Time reports HERE