September 29, 2013

Make My Mighty Wings Sauceless

I'm not the only one who thinks McDonald's menu is ridiculously complex.

First of all, I love the new Mighty Wings and have eaten them three or four times a week since the introduction. They taste good enough to eat without the dipping sauces so I ignored that issue until I read in a press article that Mighty Wings come with "a choice 9 dipping sauces". At first I thought that was a typo or bad reporting but it turns out to be true.

So when a crew person asks me what kind of sauce I want I ask (like millions of others) "What do you have?". The list is so long most crew people have to take a breath part way through. 

Yesterday I went inside a McDonald's to order and an affable collage age man took my order. I again asked my sauce question and even using the POS screen as a guide he got confused, shook his head, and said "We have too many dipping sauces".

This twenty something gentleman knows more about what's going on in a real McDonald's restaurant than anyone at Oak Brook headquarters.

Simplification is So 2004!

It's very encouraging to hear that recent McDonald's Operator Pulse Surveys included Operator concerns about the growing complexity of the McDonald's restaurant operation and that Operators feel the regional staffs are "disconnected" from the restaurants.

It seems like yesterday that one of the components of the original Plan to Win was "Simplification". That was back when the McDonald's menu was about one-half the size it is today.

I don't know if a conscious decision to expand the menu exponentially was made at some point in time or the menu just evolved from a lack of discipline. McDonald's decision makers appear to believe that efficient operations are old hat and McDonald's restaurants must now be All Things to All People.

But don't the long-time operations people in McDonald's upper management know what they are doing to the capacity of the restaurants and the effectiveness of the people running the restaurants?

They might, but there are now so many Oak Brook decision makers who have no real restaurant experience that the people with real operations knowledge must get drowned by the new product pipeline and ignored. Or they may be told (by non-ops people) they are becoming obsolete and don't understand the realities of today's marketplace. That would be pretty intimidating.

In many ways McDonald's veterans have been to  this movie before.

In the late 1990s McDonald's USA was on the ropes and Jack Greenberg staked the system's future on the Made For You cooking system. While millions of customers refused to wait in the long lines created by MFY no one would tell Jack Greenberg they'd created a huge problem. McDonald's USA went through another four years of sales problems and Operator failures.

At that time Greenberg was one of the few decision makers in McDonald's USA who didn't have decades of real restaurant experience. Because he lacked that operational background Greenberg apparently refused to listen to those who had such experience (or they were afraid to speak up).

Today, according to the corporate bios, there are only a couple of people on McDonald's upper management team who've ever run a real McDonald's restaurant. In addition there are the corporate marketing people running OPNAD who live in their own fantasy world and will never understand operations.

The danger is that these non-operations people are under intense pressure from Wall Street analysts who expect constant "Innovation". These analysts know McDonald's by the numbers but have no idea what they're seeing if they ever visit a McDonald's restaurant. I've been working with the analysts for more than 15 years and I know that they'll keep pushing for "Innovation" until McDonald's menu is the size of a Denny's menu.

And, while not as influential, the press is constantly hassling Oak Brook for "New Product News". The corporate PR people know that the easiest way to get a positive headline is to announce a new product line.

So who's going to tell the decision makers with no real restaurant experience about the damage they are doing to the growth prospects of McDonald's USA? It won't be anyone working in Oak Brook. Their career path will grind to a halt if they admit to their bosses that McDonald's can't be All Thing to All People.

It will have to be McDonald's Operators who stop the insanity through Co-Op and OPNAD decisions, surveys, public comments, and other activism. It's a long road back to a sensible menu and a workable kitchen system - only McDonald's Operators know the way.

September 26, 2013

McDonald's VIPs - Fancy Food - Celebrity Chefs

In June I was quoted in Businessweek saying,  
“McDonald’s management, once they get to a certain level—I think it’s when they get a limousine — they no longer want to be hamburger guys. They want to be restaurateurs.”

This event proves my thesis:

McDonald's tries fancy food with celebrity chefs in NYC

Former McDonald's Executive Lists Mansion

It might seem like we're picking on Ralph Alvarez but he keeps showing
up in the news. He's asking $5.25 million for his Chicagoland house.

Former McDonald's executive lists Hinsdale mansion - Crain's Chicago Business:

September 16, 2013

September 13, 2013

McDonald's Suits on Tour

McDonald's executives presented at the Goldman Sachs Retailing
Conference this week and continued to tell investors that Operator
pricing decisions are made in Oak Brook. Analysts are a little frust -
rated at this since menu price increases boost corporate earnings. 

Management says they will stay the course.

This is why we continue to hear about regional staff bullying Operators
and deeming them "not expandable / not rewriteable” even taking
new stores away from them for being outspoken against continuing
all coffee for $1, all drinks for a $1 and discount price pointing in the 
local co-ops. They are apparently using such Operators as a warning
to others to go along with what the corporation wants.  

Playback of the conference is HERE

September 12, 2013

California Lawmakers Pass Minimum Wage Increase to $10

California Lawmakers Pass Minimum Wage Increase to $10 an Hour - Bloomberg

McDonald's Higher-Price-Point Value Menu Could Be A Win

"Leslie Kerr says catering to the most price-sensitive guests can be 
both difficult and dangerous for a brand. “At some point, operators
need to ask themselves if a dollar is realistic,” she says. “Consumers
realize that prices increase, and holding on to the dollar market is 
not good business. It just doesn’t make sense.”

McDonald's Operators should bring in Ms. Kerr to speak at the next
OPNAD meeting.

McDonald's Higher-Price-Point Value Menu Could Be A Win - QSR mag

Former McDonald's Senior Director Joins OSI

It's very clever. When McDonald's Corporation wants to downsize or 
retire someone they just move them over to a supplier and let the
McDonald's Operators pay their ongoing salaries.

Former McDonald's Senior Director Joins Key Supplier - QSR magazine

September 9, 2013

Price Wars - Franchise Times

We've posted news about the pricing dispute at two Steak n' Shakes
in Denver. This article discusses the situation but also does a great
job of laying out the legal history of franchisor price fixing. 

Price Wars - Franchise Times - September 2013 -

September 4, 2013