February 26, 2015

Slower Growth in New McDonald's Stores

McDonald's details pullback on restaurant openings - Chicago Tribune
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4 comments:

Anonymous said...

They should be closing selected store's. Admit they screwed up and make things better for everyone. But, its a step in the right direction.

Richard Adams said...

Nah, they’re not going to close stores. That worked for Starbucks a few years ago but in a franchise system it’s much more complex.

Yes, there are stores that lose money but that’s for the franchisee to bear. The corporation still get’s their rent and royalties plus that store is still contributing to the precious advertising co-ops. And, they have to negotiate with the Operator to terminate the franchise.

Some Operators would be glad to walk away, some would want something for an early termination.

And, if it’s a leased site, McDonald’s has to get out of the lease.

If they were to close a bunch of stores it might benefit the Operators and might help same store sales but MCD corporate income would take a big hit.

Anonymous said...

McD is too vain to ever admit a mistake and close a location. I've been through that and they'd rather you be open and doing $1800 a day (fact) than see you close. They've weakened strong operators by saturating their markets with subpar locations with high rents in places we have no business being. Less is more! This is particularly true today when presented with a so-called "opportunity" to expand, do an MRP or relocate. McD holds all the cards, makes all the decisions and still has their hand out when you can't make payroll.

Anonymous said...

"The Golden Handcuffs" I think so many operators are embarrassed to admit that it is a charade. Since they are supposed to belong to one of the Most Powerful Brands on the planet. Set yourself free, its not worth the pain, don't be one of those Operators who hold on so long and allow McDonalds to put you into wrong debt for their agendas.