April 27, 2013

U.S. Hispanics declined by one percent in 2012

Deterred By HighUnemployment
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When Innovation Becomes the Problem

This opinion piece is more about the technology business than franchising
but McDonald's is being broadly criticized (by non-restaurant people) for
not "Innovating" enough.


"The organization cheers and rewards the innovators and soon enough
you have innovation everywhere – but very little stuff getting done. 
What happens next is chaos"

Isn't chaos the best way to describe what goes on in a McDonald's kitchen?

When Innovation Becomes the Problem - NYTimes.com:
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April 26, 2013

Don Thompson Needs to Make Franchisees Smile Again

"But some of his other prescriptions for reviving growth show little concern for the impact on franchisees' bottom lines. For example, he urged them not to offset profits lost on Dollar Menu sales by raising prices on other items and recommended adding staff to improve service."

Mr. Adams says edicts like that leave franchisees wondering, “Where do you go to make a profit?”
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April 24, 2013

McDonald's Middle East Wisdom

This McDonald's executive says, ""You can't be everything to everyone,"

Has he looked at a McDonald's menu board lately? 

McDonald's Middle East Teaches Franchisees How to Succeed Internationally:
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April 22, 2013

McDonald’s Corp. Willing to Sacrifice Margins for Market Share (Which Means Sacrificing Franchisees)

"Thompson stressed that the mix of sales derived from the Dollar Menu and 
other value platforms is still in a range between 10 percent and 15 percent
and that there has not been a significant spike in the percentage recently, 
though some franchisees have voiced objections to the level of discounting 
in the United States."

Nation's Restaurant News reports HERE:
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April 20, 2013

McDonald's Fails to Boost Sales with Dollar Menu



         Associated Press Reports

McDonald's CEO Discusses Q1 2013 Results

McDonald's Corporation held their quarterly analyst conference on Friday to disucss first qauter results. Here are a few interesting excerpts.
Michael Kelter – Goldman Sachs & Co.
So your restaurant level margins now appeared to be on phase for their third straight year of decline in all three divisions and the U.S. and Europe and in Asia.  ....... how the franchisees reacted to declining profit margins at the restaurants?
McDonald's Chief Financial Officer - ...............we’re generally aligned with our franchisees around that. They understand the importance of driving traffic in this environment and taking market share, because again, if the industry isn't growing, taking market share means we’re taking the guests from other restaurants and in that environment, that is what we have to do to continue to win. Would we love higher margin? Yes. Would they love higher cash flow? Yes, but in this environment, guest count growth and market share growth are critical.
John W. Ivankoe – JPMorgan Securities LLC
Hi, thank you. Just – I think slightly different take in what’s been a pretty consistent theme overall on margins. And it’s that restaurant profitability piece that I think is interesting because it almost suggests that that you’re plan on growing restaurant profitability in 2013 in the U.S. while increasing attention on the Dollar Menu and especially increasing attention on the Dollar Menu with some of your competitor have by that definition, backed off. So that’s something that I want to get a sense of is, did franchisees push back on you saying that the 2012 store level cash flow is something that they don’t want to see go down anymore.
McDonald's Chief Financial Officer - Yes, John, actually in 2012 owner-operator cash flow was up in the U.S. .... it still going to continue to be a market share battle and we feel good at downside about our product line up and our ability to drive more sales.
This CFO guy has a bright future in stand-up comedy!
This is an informative call and it will be very educational for McDonald's
Operators..The call can be listened to on the McDonald's website. It's
only an hour long, a worthwhile experience.
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April 12, 2013

Another New High for MCD Shares

MCD - $103.58!
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Sowing Seeds - Jack in the Box Growth Plans

Sowing Seeds - Franchise Times - March 2013 - FranchiseTimes.com:
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McDonald's give former and new CEOs big pay bumps

CANDICE CHOI | April 12, 2013 01:26 PM EST | AP

NEW YORK — McDonald's Corp. more than tripled the pay packages last year for its new CEO Don Thompson and the man he replaced, Jim Skinner.
The pay increases from the world's biggest hamburger chain came during a challenging time for the industry.
McDonald's, based in Oak Brook, Ill., gave Thompson a package worth $13.8 million, up from the $4.1 million he received in 2011, according to a regulatory filing Friday.
Thompson had been with McDonald's for more than 20 years and took over in July.
Skinner's pay package went up to $27.7 million from $8.8 million the year before, reflecting a $10.2 million payment as part of his retirement under his contract agreement.
The AP's calculation counts salary, bonuses, perks and stock and options awarded to the executive during the year.