Coalition of Franchisee Associations

July 30, 2015

Wrecking Ball Still Swinging at Logan's

Earlier this year we pointed to an NRN article about how messed up Logan's Roadhouse
was after Mike Andres left them to return to McDonald's. Apparently the damage was so
severe that the chain is still struggling.

Our previous post on the topic is HERE 

Logan's Roadhouse current results are HERE

McOpCo Explains 6 days of No A/C in Rock Hill SC Restaurant

There must be a sale to an Operator pending

July 29, 2015

What Was That CEO Thinking? - Nick Morgan

Reviewing the transcript of the conference call brings back memories of the McDonald's 
CEO's much hyped video presentation on May 4th. Nick Morgan is a renowned public speaking consultant and for those interested in verbal communications his writings and 
blogging are illuminating. Those interested in improving their public speaking can't go
wrong following Nick Morgan.

Nick's website is HERE

His McDonald's post - What Was That CEO Thinking? - Public Words

McDonald's Q2 2015 Investor Conference Call

If franchisees of publicly held companies want to know where their system is headed
they can get a good idea by paying attention to the dialogue between management and
Wall Street analysts. On last week's conference call there was no news made and 
management's statement were, as usual, vacuous but the questions from analysts are 
always interesting.
A playback of the one-hour call is HERE

The Seeking Alpha transcript of the call is HERE

July 28, 2015

Famous Dave's Puts a Franchisee on the BOD

Until recently former McDonald's exec Ed Rensi was CEO

Famous Dave's gets an interesting new director - NRN

McCashing In

On July 24 McDonald's President of High Growth Markets David Hoffman sold 979
shares of McDonald's Corp. at $96.34 = $94,316.00

July 27, 2015

Dunkin's CEO on McDonald's Breakfast-All-Day

Interesting comment from BTIG analyst Peter Saleh on Operator breakfast vote:

"What if they vote no?" Saleh said. "If they do, the stock is going to get clobbered.
At this point, people (shareholders) are waiting on all-day breakfast."

Opinion from Nation's Restaurant News

Operator Comment of the Day

hold on to your hats. The corporate "partnering" contribution for all day breakfast 
REQUIRES you to participate in "Taste Crafted Bundles" and/or "Build a Burger. 
ITS RIGGED. Yet its endorsed by the NLC !!!! 

Businesses Are Getting Steamrolled On Minimum Wage

Businesses are getting steamrolled on the minimum wage. Here’s why. - Washington Post

July 24, 2015

Technomic On Delivery Service

The trend toward delivery of QSR meals is going to be interesting. Isn't this the first time 
there has been a third party in between the QSR Operator and the customer? Who is ultimately responsible for customer satisfaction?

If the restaurant is part of a franchised chain who deals with customer satisfaction issues? 

Especially when the franchisor has something to do with selecting or managing the outside 
delivery service. When a customer calls the corporate office or complains on a feedback 
website about food quality or order accuracy who who's responsible, the franchisee or the 
delivery service?

The franchised restaurant business is supposed to be about control and consistency. A lot of 

that goes out the window when an Operator hands an order to Joe from Acme Delivery service.

 Technomic - Delivery Service Trials

Millennials Eat McDonald's All The Time

Millennial Reporters from Business Insider talk about McDonald's - Video

July 23, 2015

McDonald’s Sales Dropped in 2nd Quarter

McDonald’s Sales Dropped in 2nd Quarter, Cutting Profit - NY Times

Franchises Fighting Back

Where's the beef? Fast-food franchisees pan NY wage hike - Washington Times

Fast-food coalition hires Pit Bull attorney - Blue Maumau

Operator Comment of the Week

What happened?.

Growing up McDonald’s was a marketing dynamo – with brand recognition around the world.

Ronald and friends, social responsibility and quality messaging filled the airwaves.
Ray Kroc, Fred Turner hit the talk shows… delivering the brand message that McDonald’s wanted to present.

Over the decades, that messaging – that marketing – eroded to ADVERTISING

Ray Died, Fred Retired. Combined with POLITICAL CORRECTNESS – McDonald’s turned adversity into weakness. Where the brand should have returned to boldness, it cowered.

When attacked over nutrition – the brand didn’t recognize it as a result of its crumbling marketing message – it inflicted self-guilt in not trusting its products or its people. It rapidly abandoned strategies like SUPER SIZE over a false movie, instead of launching a media campaign. Hiding under the disguise of SOCIAL RESPONSIBILITY for better nutrition – while competitors stole those pieces of the business and created profitable niches.

OPNAD transitioned from being a BRAND AMBASSADOR – to being a DOOR TO DOOR salesman. Its message of BUY ONE GET ONE FREE and DOLLAR MENU, not only continued to erode the brand image for QUALITY – it cheapened the brand marketing ability altogether.

Focused on REBATES and COST SAVINGS – OPNAD destroyed the McDonald’s Powerhouse image. A brand renown around the world, including starving nations. Nations that didn’t have food to eat, much less a McDonald’s, knew the GOLDEN ARCHES.

Food, Folks and Fun transitioned to cheap and low quality.

Even today, when it’s critical to deliver the message of BRAND REIMAGE and QUALITY – the brand messaging is overrun by a growing competitor field. At a time when the brand needs to ensure its message entry into every household to discuss QUALITY; it resorts to a decade old strategy of crew “telling our story”

The juggernaut that once made the world tremble with its marketing might; places its entire trust on a 16-year old pimply kid behind the register. Instead of the Multi-Million dollar abilities of its OPNAD Marketing force. Choosing, yes Choosing, to keep its focus on the same value driven marketing strategy that has placed the brand in this decline to begin with. 

Leadership at all levels are responsible for the out of control development of a Program called R.O.I.P. Once designed as a program to make “good restaurants great”, has grown to a bureaucratic process with a life of its own. The program of visitations, turned to grades, turned to Mystery shops, 800-number, VOICE and other measures that have generated a complete business focus on the “TEST” and not the customer. Our people are to scared to do anything. Mistakes lead to complaints. Complaints lead to job loss.
Restaurant leadership was stressed over change, products and business results – now have to worry about ex-employees, ex-lovers or other competition infiltrating any number of measures that can lead to their termination – as it can lead to a franchisee losing their license.

Turn Over in management is the highest it’s ever been in the history of McDonald’s
McDonald’s Corporation now sets the PEOPLE, the PRODUCT and EQUIPMENT

It also now sets the PRICE.

And when things fails – It sets the blame. Never accepting any itself.

Local COOPS are useless. Most just churn out a message that’s been decided long before the meeting went into session. Forced into submission by REWRITES, GROWTH opportunities.

A system that no longer prides on the fact of WHAT THEY KNOW, choosing prizes for those WHO THEY KNOW – selecting those who will blindly carry whatever message given. Unwilling or unable to make a conscience business decision if required.

At a time when the brand is looking at so many new things, allow me to suggest it may need to go RETRO to find success.

OPNAD needs to polish the arches to build the employer image, food quality and social responsibility to aid restaurants in attracting the Quality applicants necessary to deliver the Quality, Service and Cleanliness.

COOPS need to market its food and strategies to get people in the doors.

Restaurants need to be able to upsell and provide the hospitality to keep them coming back. This means giving back the control to the POS to allow stores to generate LOCAL STORE MARKETING packages to address its customers AND (most importantly) their competition.

Field votes need to cover more than DOLLAR MENU and BREAKFAST ALL DAY. Everyone needs to have a say, provide input into design, equipment and services – THEY HAVE TO PAY FOR!

Let’s be honest has to be more than a slogan on a button.

None of us, is as smart as all of us!

And any store up for sale should open to the highest qualified bidder – not just who the region wants to promote an agenda. Especially if the "buyer" is on a leadership team.

Do these few things and the brand is 80% of the way there.

Don’t do any of these things, it’s going to be an interesting decade. 

$15 Fallout

In Seattle prices appear to be going up on everything

July 20, 2015

Let's Get the Straight Numbers

We've discussed how QSR Operators are being oversold on the size and importance of 
the Millennial Generation - mostly oversold by millennial writers, millennial corporate 
people, and millennials working in advertising and public relations.

In the same manner ... I'm told that the McDonald's Operator website contains this statistic:

"Approximately 6 - 7% of adults report to be LGBT", the site goes on to extrapolate those percentages into millions of people and billions in retail sales.

Trouble is - a recent Gallup Poll (May 2015) reports that only 3.8% of the population 

identify themselves as lesbian, gay, bisexual or transgender.

Now, the difference is not huge but it's not legitimate to nearly double a segment of the population just to make a political point. 

The Gallup report is HERE


New York Panel Is Set to Propose $15 Fast-Food Wage

It's hard to imagine that picking on one industry can be legal?

Analyst Opinion On McDonald's

RBC analyst David Palmer thinks the McDonald's USA "turnaround" begins now

July 13, 2015

McDonald's Breakfast All Day - a "Test"?

I am told the notes from the June NLC meeting refer to "Breakfast All Day" as a "test".

Sorry folks, Breakfast All Day is not a test, it' s a done deal. As your expert in watching McDonald's Corp. interact with Wall Street and the business media I can assure every

one that Oak Brook will not allow this "test" to fail.

Knowing nothing about operations, Wall Street analysts have been beating on McDonald's
management for years to consider breakfast all day. This is a reaction to the McSpin that
even in periods of slow sales growth, McDonald's breakfast sales hold up.

It all comes down to Steve Easterbrook: knowing nothing about operations, does he want 

to be the CEO who just couldn't make breakfast all day happen. Or will he want to be the  CEO who made breakfast all day work for the first time in McDonald's history?

You do the math.

Look for a public announcement in January saying that breakfast all day is to become 

the national standard (possibly announced in October).