Coalition of Franchisee Associations

January 28, 2013

Hedgeye Comments on Chicken Wings

:: Hedgeye :::

Starbucks Targets Drive Thrus

"More than half of the 1,500 new coffeehouse locations Starbucks Corp. plans to 
open in the United States over the next five years will be drive-thrus,"

NRN Reports:

January 23, 2013

McDonald's CEO Discusses Q4 2012 Results

There was a lot of discussion about new McDonald's stores on today's conference call. 
The thought of new stores thrills some McDonald's Operators and terrifies others 
because of cannibalization.  

These transcripts are an easy read and very informative.

McDonald's CEO Discusses Q4 2012 Results - Earnings Call Transcript - Seeking Alpha:

MCD in Q4

McDonald's released mixed results for the fourth quarter of 2012.
Here are two different takes on the news:

Zack's - McDonald's Beats on Both Lines

Forbes - McDonald's: Stale Growth Means A Future That You Won't Love

January 15, 2013

Blame it on "Made For You"

I would never tell a McDonald's Operator how to run their stores. But I
can be a pretty objective customer who has opinions backed up by 30 years
of operations experience.

When McDonald's USA installed the Made For You kitchens I quickly got
frustrated (as a customer) with the tripling or quadrupling of service times
at McDonald's. Like millions of McDonald's customers I gravitated to the
drive-thru because it seemed faster and I didn't have to stand around with
my arms folded waiting for my food. Hence the increases in McDonald's
Drive-thru business over these years. For more than a decade I've avoided
the inside of a McDonald's unless checking out a new dining room or other
change. If I wanted to eat I'd get in my car and go through the drive-thru.

But during the past six weeks, for various reasons, I've been going inside a
number of McDonald's stores to order and eat. In my humble opinion, the
service times are worse than when Made For You was first installed. My
guess is that's because the menu has doubled in size over those years (why
is the Angus still cluttering up the menu?).

So, as a customer, and an operations veteran, I have a few recommendations
for McDonald's Operators that might help break the bottleneck at the front
counter and build sales in 2013.

* Reduce the menu by 25% - I know, management will never have the
   self-discipline necessary but I had to put it out there.

* Put in "Dual-Point" ASAP. While it might not actually speed up service it
   will be comforting for the customer. As well as I know McDonald's I still
   wondered if I'd been forgotten on about half my visits.

* Keep a manager on the front counter. During my visits the management
   people rarely looked a customer in the eye and paid all of their attention
   to drive-thru. I know how they feel since I remember how my managers hid
   in the grill area when we messed up a breakfast/lunch changeover on a
   busy Saturday.

* Lock the cell phones in the safe - there is nothing more irritating than
   watching the person who is obviously in charge wandering the floor talking
   or texting on a cell phone. I don't care if they are talking to their boss, they
   should be fixing the operation and delivering my food.

There, I said it. The first McDonald's training films told new crew people,
"hungry people aren't always patient". Those were slower paced times so
today it's even more true. There are a limited number of people out
there who will wait so long for their food.

January 14, 2013

New York Health Regulations Impact US Restaurant Industry

“Mayor Bloomberg’s foray into this area is 
misguided. I think it’s ridiculous. I think it’s anti-American. Every time you increase the power of government, you decrease our individual liberties,” 
Puzder says. 

QSR Magazine Reports:

January 12, 2013

NRN Reports: Restaurants reluctant to raise prices

Survey: Restaurants reluctant to raise menu prices:

Management Is Not Leadership - Harvard Business Review

"all we will try to do when we do need more leadership is work harder to manage. 
At a certain point, we end up with over-managed and under-led organizations, which 
are increasingly vulnerable in a fast-moving world."

Management Is (Still) Not Leadership - John Kotter - Harvard Business Review:

January 10, 2013

Another Advertising Agency Sells Out McDonald's

Next time you scan over the threatening legal message at the bottom of every memo
from McDonald's management consider the following.

I often get calls from reporters who cover the advertising industry and are looking for
the latest in proprietary marketing information. Since I don't have such information I 
can't help them but am always floored by what they already know about McDonald's. It 
quickly becomes obvious they are confirming leaks of information from members of 
OPNAD, Oak Brook marketing, or one of the ad agencies. In my experience 99.9% of
McDonald's marketing leaks come from the agencies.

These reporters spend much of their day chatting up the people at major ad agencies. 
As we know, agency people are only loyal to their next job offer at their next shop. 
One way to advance their careers is to have good connections at the most important publications in their industry.

But the article linked below is not just a leak, it's a press release from the agency! If
McDonald's Operators want to stop marketing leaks they need to clamp down on the ad
agencies, or reduce the number of agencies.

McDonald's Will Relaunch The Big Mac - Business Insider:

How to Ruin Your Car Engine and Raise Your Food Costs

AAA says don't use E15 ethanol "gas".

More good corn being wasted.

Fox Business Reports