Coalition of Franchisee Associations

December 24, 2014

A Lttle Help? ..... Some great comments here!

Can McDonald's Operators help us understand this 2015 McDonald's Corporate strategy:

"Re-ignite entrepreneurial spirit of three-legged stool"

I'm familiar with the three-legged stool but what does it have to do with entrepreneurship?

A Franchisee Friendly Franchise Company!

Vantage Hospitality Issues Unprecedented Bill of Rights for Hotel Franchisees

Year-End Tax Changes

From Concannon & Miller

December 14, 2014

McD's Listening Tour (@McDListenTour) on Twitter

McDonald's "Listening Tour" sounds good but they haven't used their Twitter
account since 2011. Not much listening going on.

McD's Listening Tour (@McDListenTour) | Twitter

McCafe Fresh Baked Muffins a Sure Thing to go National?

Doing TV is not easy and this Michigan McDonald's Operator does a great job. But, she 
slips and talks about McCafe Fresh Baked Muffins as a national product. 

Let's simplify the menu ..... and then add new products.

McDonald's - FOX 47 News

Crain's on McDonald's Downtown Chicago "Digital" Office

Here's hoping McDonald's Chicago office attracts more than tech talent - Opinion

December 11, 2014

CNBC Readers Vote On McMenu Changes

The press is obsessed with the idea of McDonald's cutting "eight" products. 
CNBC is taking a poll on what should be eliminated. So far with more than 
23,000 votes it doesn't look good for McWraps. To see results scroll to the 
bottom of the article.
McDonald's to cut menu items in order to increase service speed

December 10, 2014

See, I Told You So ... Re: Build-A-Burger

In mid-September I posted:

"the four store McDonald's Build-A-Burger program in Southern California is not a test -
it's the preordained future of McDonald's."

On an investor call today Don Thompson said:

“Create Your Taste is not a test,” Thompson said. “It’s a rolling implementation now.”

McDonald's to cut eight menu items in January

Where Does the Buck Stop at McDonald's?

Anonymous commenters often put all the blame on Don Thompson but the problem
could also be an antiquated board of directors. Fortune does a great job of looking at
board member's ages, tenures, and cross-connections.

Where does the buck stop at McDonald's? Look no further than the board.

December 7, 2014

McDonald's Expands Build-A-Burger

The first sentence in this article says it all:

"The future of McDonald's fast food may be slowing it down."

These people who think that McDonald's customers, or potential customers, will
"be willing to wait longer if they know it's being made for them" are delusional.

The wait time for the food was seven minutes with the USA Today reporter watching? 

How long will it take in a real world situation?

And, if it's not a drive-thru product McDonald's is not going to attract millennials. As
I've written before, based on my experience with my two millennial children and their
friends, this is a drive-thru generation and is why the McDonald's drive-thru % has 
increased over the past decade. You're not going to get them to come inside the 
restaurant, even for a Build-A-Burger.

Unless you give the food away - which is why coupons are mentioned repeatedly in this
article. The sales numbers coming out of these test stores are going to be distorted or
falsified in the same way McCafe espresso test numbers were cooked.

McDonald's expands custom sandwich option - USA Today

November 29, 2014

More From Fortune Magazine - Video

Fortune reporter Beth Kowitt discusses her article from several weeks ago. I worked
with Beth on the Fortune article and found her to be a capable professional. But,
she is a millennial and like all millennials considers her generation to be special
and unique. Here's Beth with a video recap of her article:

YouTube video is HERE

A Priest, a Minister, and a Rabbi Walk Into a McDonald's

McMass wants to put McDonald's in a church

November 21, 2014

Franchisors Tell Investors More Than Their Franchisees

We've always encouraged McDonald's Operators (and franchisees from any brand) to follow the
communications between corporate management and their investors and analysts who cover the
company. This usually takes the form of press releases and on-line conference calls following
the publication of a particular quarterly earnings report.

But presentations like the aforementioned Morgan Stanley Conference can be more instructive.
The end-of the-quarter conference calls are 80% about the past and 20% about the future. Investor conference presentations are almost entirely about the future. Since the future of McDonald's is in question it's important to study how management plans to reinvent the brand.

Especially since this reinvention of McDonald's is being orchestrated by executives who've never
run a real restaurant or come face to face with a real McDonald's customer.

Three things stand out of the McDonald's discussion at this conference:

* All of McDonald's problems will be solved through "Technology". Management says their digital
strategy will "revolutionize how the customer experiences us".

* Simplifying the menu and operation while adding customized products was discussed with no
serious discussion about real world conflicts this creates. Technology will take care of everything.

* Other than talk of selling some McOpCos there was no mention during these discussions of the
fact that McDonald's has franchisees. If a Wall Street analyst was new to the industry they might assume that every McDonald's was operated by McOpCo. Menu prices are discussed with no mention of franchisees. Vast technology investments are discussed with no mention of franchisee buy-in. Changes to the kitchen are discussed with no mention that those kitchens are owned by franchisees. 

Normally there is rhetoric such as "our franchisees are aligned with our plan" or some positive statement. This time it was as though McDonald's Operators don't exist. 

November 12, 2014

Restaurants could see strong year in 2015

Restaurants could see strong year in 2015 - NRN

McDonald's Drops Rights to "You Deserve a Break"

McDonald's Drops Rights to "You Deserve a Break" - BurgerBusiness

Can McDonald's get its mojo back?

"There was no shortage of answers. For starters, there were certain operational failures, 
some of which—like menu creep—had been decades in the making. In 1990 Fortune covered the proliferation of McDonald’s menu, noting that the restaurant offered 33 items, not counting size permutations. That was up 25% from 1980. Today the menu has 121 items, a 75% increase from 2004"

Fallen Arches: Can McDonald's get its mojo back? - Fortune mag 


November 8, 2014

Restaurants Find Eliminating Discounts May Hurt Sales?

For the first 35 years of McDonald's history corporate leadership discouraged franchisees
from discounting because it cheapened the brand and was an addictive business tactic.
Now the entire quick service industry is addicted to discounting. 

Isn't this just a result of the industry being over-built and saturated?

That's part of the reason but it's also driven by the fact that most of the major players
are publicly held companies and have to satisfy their shareholder's obsession with same 

store sales increases, profitable or not.

Restaurants find eliminating discounts, coupons may hurt sales, traffic - NRN

November 2, 2014

Some Good Advice For McDonald's

Kellogg School's Calkins advises McDonald's to refocus on its core strengths - Crain's

In Mobile Payments War ...

"Somewhat famously, former Wal-mart CEO Lee Scott was asked at a conference last year whether he felt confident CurrectC would succeed. Scott's response: "I don't know that it will, and I don't care. As long as Visa suffers."

In mobile payments war, consumers are a powerful army

October 30, 2014

Back to the McFuture?

McDonald's Divisions being changed back to Zones? What's a "zone insights person"?

Is this another tactic to deflect attention away from Oak Brook?

This is reminiscent of the days when McDonald's USA Zones were changed to Divisions
to be "closer to our customers" yet four out of the five original Divisional offices were
in Chicagoland.

I pay no attention to 2nd tier McDonald's corporate people so can someone tell me who's
this James Collins? Has he been working somewhere else since 2011? Is this another rehire? 

October 28, 2014

Burger King Franchisees And Coaches

"Franchisees have complained that some of the coaches are too young and inexperienced, 
 with many of them hired straight out of business school."

Burger King Franchisees And Coaches - Business Insider

McDonald's: Millennials Aren't The Problem

Howard Penny is one of the Wall Street analysts who asks questions corporate
management hates to answer.


October 27, 2014

More on "Aggressive Change"

In February we discussed Jack Greenberg’s late 1990s attempt to reinvent McDonald’s.

Our previous post is HERE.

This is where Greenberg said:

"Those of us who weren't with you at the beginning of McDonald's are excited to be 

  with you during the reinvention of McDonald's".

Welcome to the 21st century version of Greenberg's statement.

On last week’s conference call with Wall Street analysts Don Thompson used the phrase “aggressive change” numerous times. This is code for “reinvention” and could be just

as destructive as Greenberg’s attempts to change McDonald’s.

Another key theme of the conference call was “localization” or “A flatter, more nimble organization that ensures key business decisions are made closer to the customer, by 

people with local market expertise.”

It’s hard to believe that a bureaucracy run by control freaks that’s been top-down for 

30 years is going to turn on a dime and encourage creativity and entrepreneurship in 
the field. But, this is a shrewd political move that takes the spotlight off Oak Brook and
puts the onus on McDonald’s Operators and faceless corporate field people.

This buys management time to deflect blame and gets them through the 2015 share -

holders meeting. If things aren’t going better by the spring it will be time for a full
on attack on the Operator community.

Which, McDonald’s veterans will remember, was another Greenberg strategy (one of 

his last).

October 22, 2014

Minimum Wage Backfire - WSJ

What used to be a starting wage is now supposed to be a "living wage"

Why Chipotle Will Never Replace McDonald's

"McDonald's domestic sales last year totaled nearly $36 billion, which was greater 
than the entire fast casual industry's sales ($34.5 billion), according to Technomic."

Analysts Discuss

Is Chipotle Really Healthier Than McDonald’s?

One Chipotle burrito can be twice the calories of a Big Mac and have nearly a full day’s worth of calories. A burrito with chicken, white rice, black beans, fajita vegetables, tomatillo-green chili salsa, guacamole and cheese with a side order of chips is 1,695 calories A Big Mac has 530 calories.

MarketWatch Reports HERE

October 21, 2014

McDonald's CEO Don Thompson on Q3 2014 Results

If there was ever an important communication between McDonald's Corp. and
their shareholders that impacts franchisees today's conference call is it.

Management is intending to turn the brand inside out and upside down to grow
sales. Do they know what they're doing? ... Study this call and decide.

Listen to the replay here 

Or read the transcript:

McDonald's Q3 2014 Results - Earnings Call Transcript

Hint - Listening to the call is more insightful. 

Another Tough Quarter for McDonald's

McDonald’s Profit Falls 30% on U.S., China Woes - WSJ

October 7, 2014

QSR Magazine Fast Food Drive Thru Study

Industry execs admit slower service and increased order mistakes caused by menu
complexity - plan to solve it with "training".

McDonald's says “It’s about going slow to go fast.” Is that Oak Brook Speak?

Fast Food Drive Thru Study Reports Speed and Performance in Industry - QSR magazine

Qdoba Mexican Grill Reworks Menu / Pricing

“They also felt the menu was overly complex and that the ordering 
process itself was more complex than it needed to be,” Qdoba pres.
Tim Casey said.
Qdoba Mexican Grill reworks menu pricing in brand revitalization effort - NRN

October 6, 2014

Minimum Wage, Maximum Politics

Who's the smartest guy in QSR? It just could be the CEO of Carl's Jr. 

At least he's the most outspoken.

Andy Puzder: Minimum Wage, Maximum Politics - WSJ

McDonald's Agency Calls for Change to Spending

Move 10% to 25% of TV Ad Dollars To Online Video


What's the Fastest Food to Order at the Drive-Thru?

In describing QSR mag's timing method this article states,"Time spent waiting to order 
doesn't count". That time matters a lot. That's when I pull out of line go elsewhere.

Businessweek Reports

October 3, 2014

Build-A-Burger Going Global

No matter what the test results show, Australia is taking Build-A-Burger nationwide.
USA operators should just order the equipment now, this isn't a test, it's a reinvention.

Aussie TV reports

October 1, 2014

Dual-Point: You're Doing It Wrong

I recently had the opportunity to visit 10 McDonald’s stores owned by the
same Operator. Seven of the stores had dual-point ordering, three did not.
As stated before, I’m a big fan of Dual-Point even if all it does is to make
the customer feel better about the process.

Applying my decades of operations experience with my recent experience
as a QSR customer I can make no sense out of the change to only giving the
customer their drink cup when the food is available. Who thinks it’s a good
idea to force the customer to waste that 3 or 4 minutes they’ll wait for
their food? And then they have to carry their food over to the drink station
where there’s really no place to the set their tray or bag while drawing
their drinks?

Dual-Point has eliminated some confusion at the front counter but at the same
time created a bottle-neck at the drink station. Unfortunately the customer
bears the inconvenience and no one behind the counter or in Oak Brook is
concerned. Speaking as your customer, I hate waiting for my food and getting
my drink eats up some time. I’ve already paid for that cup and I want it now!

Can anyone offer a reason this makes sense in the kitchen? Because from my
side of the counter it makes no sense at all.


Mom-and-Pop Restaurants Feel Pinch of Minimum Wage Hike

Mom-and-Pop Restaurants Feel Pinch of Minimum Wage Hike

Wendy's BBQ

While Wendy's food is usually enjoyable I tried the new BBQ pulled pork 
sandwich and was not impressed. Too much BBQ sauce and too much slaw
made the pork invisible to my taste buds. The sandwich comes across as 
scrimping  on the pork.

Wendy's competitors need not worry, especially at $4.49.

USA Today on Wendy's pulled pork

September 24, 2014

Franchise Industry Strikes Back

"This joint employee-employer thing, if that goes through, that's a hand grenade in 
the middle of the [franchising] business model," says Two Men and a Truck and 
BrightStar Care franchisee Bill Bass.

Franchise Industry Strikes Back at NLRB's 'Joint Employer' Decision

Monopoly Hardball Down-Under

BK Undercuts Monopoly in Australia - βurgerβusiness

September 20, 2014

Canada Betts on Coffee

Here's why McDonald's wants to serve you coffee at home


Accountants are Important, But ...

All too often I’ll come across a McDonald’s Operator who is thinking about selling a really
good store. A store with high volume, reasonable rent, a good facility, etc. The Operator
will say something like, “I’m going to meet with my accountant to determine what the store
is worth”.


This the product of years of focus on cash flow ratios, valuations by experts, and continued
interference in store resales by McDonald’s corporate.

Accountants don’t determine resale prices of McDonald’s stores – the seller and market
conditions ultimately decide the selling price.

Accountants play an essential role in store sales. They can help the buyer decide if they can
afford the deal. They help the seller with tax ramifications and other issues.

But having an accountant determine the value of a uniquely good store?


Obama, Unions Trial Bar Take Aim At Franchise Model

Obama, Unions Trial Bar Take Aim At Franchise Model -

Americans Are Tired of Long Restaurant Menus

The Washington Post reports

September 17, 2014

Build-A-Burger: A National Launch

I previously referred to the four store McDonald's Build-A-Burger program in Southern
California as a "test". It's not a test - it's the preordained future of McDonald's.

When four stores out of 800 plus are conducting an operational "test" one does not bring
in the national media to create a PR stunt. The San Diego and Los Angeles CoOps have
already launched a social media campaign to draw reporters into the restaurants.

How does management back away from this without admitting to a huge failure?

In fact, I don't think there are any real "tests" in McDonald's any longer. Someone comes
up with an idea to copy a competitor, the Innovation Center develops the product, and 
the national roll-out plan is finalized.

Therefore, at the very beginning of the "test", we get this on Twitter:

Breaking Burger News: Media, bring your press badge to McD's @ 3805 Midway Dr. before 2:30 pm for a FREE Build Your Burger


New Deck Chair in McDonald's Marketing

McDonald's hires Ehle as VP customer officer - CCB

Why Chipotle Won't Franchise

Entrepreneur Mag Reports

September 16, 2014

Nothing's Ever Simple Is It?

Can you reach it? Please pull your car closer to the building.

Apple Pay At McDonald's Drive-Through - Business Insider

Cashing In On The Way Out

On September 12 McDonald's SVP Jeff Stratton sold MCD shares valued at
$2,870,869.00. In addition he exercised his option on 23,172 shares of MCD
purchasing them at $56.64 a share. If he were to sell these exercised shares at
today's closing price he would net another $860,100.00.

September 8, 2014

Memo To McDonald's - New U.S. President's To-Do List

Thanks to the McDonald's Operators who pointed out this Seeking Alpha article by author
Denise Lee Yohn. She suggests Mike Andres should:

* Stop introducing new products outside the core menu.

* Stop courting the media when it comes to quality.

* Stop the retail bagged coffee.

* Start improving value perceptions.

* Continue streamlining the menu.

* Re-focus on families.

Memo To McDonald's: Core Execution Should Be On New U.S. President's To-Do List