I've talked to more reporters in the last 60 days than all of 2014. Usually these folks cover McDonald's out of Chicago or they cover the industry in general. In either case they know something about McDonald's so conversations are sometimes routine.
McDonald's had a presence at a technology summit in Austin TX last month and the reporters covering the event knew nothing about McDonald's. A reporter who normally just reports on technology developments asked this question:
"How is this digital strategy different from previous initiatives McDonald's franchisees have been asked to buy into?"
I responded, "It's imaginary".
A better word might have been "conceptual", but I explained that previous initiatives involved remodeling, adding equipment, or new products. These have been tangible things that can be tested or observed in other areas of the industry. Mobile payment, mobile ordering, kiosk ordering, etc. are all in the initial testing stages and nowhere has any chain proven that they builds sales or fit into the operation of the restaurant.
Last week I shared this line of thinking with a Wall Street analyst and they replied. "It's working at Panera Bread".
As of mid-February Panera 2.0 is in 300 of their 1,900 stores and their CEO hopes to have it 600 stores by the end of 2015, so far only in company operated stores. Panera's Management has been talking about Panera 2.0 for a long time but they haven't yet proven anything, except it's an expensive implementation.
Smashburger launched their mobile app three weeks ago. Sonic is making noise about a "21st century network with our customers" but so far it's just talk.
In March, When asked about their digital strategy, McDonald's CFO told an investor conference "We are a little late to the game". No they're not! Everyone's at the beginning and no one's proven anything.
One of the reasons digital seems like an established part of the restaurant industry is that much of the hype is created by the people who sell the hardware and software. It's in their best interest to make digital seem like proven technology.
And it all sure sounds good - maybe some of it will pay for itself? .
Wendy's pulled the usual trick on shareholders and some of their franchisees. When they began their reimaging program about six years ago they did on the worst stores first. This brought sales increases in the 25 - 30% range. Of course, as they moved into newer, more normal locations the increases fell off and so did the ROI.
TACO BELL TWEAKS McDONALD’S FOR PROMOTING… TACO BELL
Following our April 13th industry note in which we noted that McDonald’s of Northeast Pennsylvania was offering a free Egg McMuffin for customers who provided – of all things – a breakfast receipt from rival Taco Bell, Katie Little of CNBC informed us that another group of McDonald’s restaurants is offering the same deal. This involves McDonald’s restaurants in the Coastal Bend of Texas. That group of McDonald’s restaurants tweeted out this past March 30th, “Bring us your Taco Bell receipt, and get yourself a free Egg McMuffin for Breakfast.” Sounds like that doesn’t even have to be a breakfast receipt!
In addition, we’ve noticed several other McDonald’s Twitter accounts mentioning – directly or indirectly – Taco Bell, and/or Taco Bell’s “breakfast defector” marketing campaign. For example, McDonald’s Kansas City tweets “Defect if you’d like… Used to Egg McMuffins every morning? Defect to a McGriddle.” Another example comes from McDonald’s Tampa Bay: “At McDonald’s, we love everyone… even breakfast defectors.”
Kalinowski’s take:The best response to all this comes from Taco Bell itself: “.@McDonald’s Why not make this offer available nationwide?” Yeah, we’d like it too if the 800-pound gorilla in our industry was promoting us – and in some cases, literally asking folks to go buy our product as part of a promotion. If we were McDonald's, we would mandate that all restaurants immediately cease these promotions of our smaller rival, no exceptions. And, to the extent Twitter etiquette permits this, and to the extent it wouldn’t break any laws, if we were McDonald’s we would even mandate that all McDonald’s restaurants’ past tweets mentioning (directly or indirectly) Taco Bell and/or Taco Bell’s “breakfast defector” promotion be immediately deleted. .
Visitors to this website have suggested some turnover on the McDonald's board of directors with some younger blood. One director is suddenly resigning but unfor - tunately it's one of the younger directors.
There are comments on this website about an independent McDonald's Operator group that would theoretically have some influence on McDonald's corporate franchising decisions.
That group already exists - it's called OPNAD.
How preposterous would it be for McDonald's Operators to go though the angst and expense of forming an independent association while at the same time voluntarily sending Billion$ into the OPNAD fund? And, in doing so, Operators would continue to spend two and three times their contractual obligation on advertising and promotion?
Operators should review their franchise agreements and live up to 100% of their obligations. Any thing beyond that is a contribution to enrich McDonald's shareholders and Oak Brook executives.
Once you have OPNAD under control (or out of business) then we should talk about a McDonald's Operator association.
McDonald's Operators could influence the direction of the system with their participation or non-participation in OPNAD. It would take a lot of intestinal fortitude but so does starting and belonging to an independent franchisee association.
Analysts and activist investors continue to discuss McDonald's real estate. Management is eventually going to have to provide some transparency about their real estate dealings over the past twenty years. This has come up before but it's different this time. Investors are not expecting a lot of growth in the McDonald's share price so they're looking at mining other company assets. McDonald's Shareholders: 2 Top Wall Street Analysts Are Talking - Yahoo Finance .