Coalition of Franchisee Associations

December 19, 2016

Chipotle Adds Another McDonald's Guy to Board

Remember when activist investor Bill Ackman tried to get McDonald's to spin off some
of its real estate and McOpCos? At the time the CFO of McDonald's was one Matthew Paull.

Soon after Paull "retired" from McDonald's he ended up working at Ackman's investment 
firm. Ackman has taken a position in Chipotle and has put Paull on the Chipotle board of

Humorously, this is supposed to give Chipotle someone with restaurant experience. Trouble 
is, Paull was the chief financial officer at McDonald's. He knows as much about restaurant 
operations as Jack Greenberg knew.

And, from day one there have been two former McDonald's execs. on the Chipotle board, 
Pat Flynn and John Charlesworth. If McDonald's experience can fix Chipotle those two
guys should have already gotten it done.

Chipotle Adds Four Board Members in Ackman-Endorsed Shake-Up - Bloomberg

December 16, 2016

McDonald's, Uber Partner On Delivery

Still wondering - if a franchisee has a third party deliver food, who's responsible
for quality, food safety, and system standards?

Consumer News - Crain's Chicago Business

December 12, 2016

Two Takes on Chipotle's Burger Business

Our friendly analyst Mark Kalinowski recently visited Chipotle's "Tasty Made".
His report is covered in these two articles.

Tasty Made Changes Beef & Prices - βurgerβusiness

NRN on Tasty Made

December 5, 2016

McDonald’s Digital Officer Logs Off

I don't know if this guy ever did any actual work for McDonald's Corp. but he
was famous for giving speeches and attending technology conferences.

McDonald’s digital officer departure continues executive turnover:

AP Interviews McDonald's CEO

"Q: You've introduced more premium burgers with the growth of all the "better burgers" 
out there now. 

MCD CEO: There's clearly a market for a more premium priced burger with more 
premium ingredients. If we can bring to our menu the quality ingredients, but maintain
the value of McDonald's, then I think that gives us a competitive edge."

Odd, those are almost the exact same words Ed Rensi used to sell the Arch Deluxe to 
Operators - just over 20 years ago.

McDonald's CEO: Chain still plans to expand in the US again:

Has All This Been Approved by OPNAD?

VP of strategy sure talks a lot!

McDonald’s Revamps Its $4 Billion McCafe Brand - Bloomberg

November 28, 2016

Iowa Operator Bankruptcy - Part II

The previously mentioned McDonald's Operator bankruptcy has created a stir,
unfortunately leaving many questions unanswered. Following legal proceedings
can be very frustrating. The attorneys can't talk about the case and typically 
instruct their clients not to talk to anyone. 

In this environment the media can only report on what has been filed with the 
courts. And, since few civil cases go to an actual trial, there are rarely public 
proceedings to follow.

And when a civil matter does go to trail the presiding judge usually frowns on
"trying the case in the press". Trust me, I've had many opportunities to connect 
eager reporters with franchisee plaintiffs but their attorneys usually kill the 
idea. And in big-bucks litigation your attorney is your boss.

The initial document filed on 1/18/16 is only five pages long and was filed with 
the Southern District Court of Iowa and is available (with some effort) at:

To access documents on the website you'll need to establish a "PACER" case 
locator  account  on the home page which I found to be laborious but doable. 
It's almost as if the legal establishment doesn't want citizens to have easy 
access to information.

The case number is 16-02263 and is Document #14

November 17, 2016

Walk Right In - Sit Right Down

Reuters reports on McDonald's big city kiosks

A statement that is both stupid and arrogant at the same time.

"Demonstrating returns is key to convincing franchisees to make the switch, 
executives said. In a video, one UK executive said sales grew 8 percent in 
downtown London as a result of the initiative.
"People may not always like to change, but people like to make money," 
Kempczinski told Reuters."

Have MCD Execs Ever Seen a Store With a Drive-Thru?

Question of the day: Why is Oak Brook focused on initiatives that don't apply to Drive-Thru?

McDonald’s Introduces Screen Ordering and Table Service - The New York Times

November 8, 2016

November 1, 2016

Lie Down With Dogs - Part Deux

According to notes from the recent NLC meeting the contemptible Robert Gibbs is giving McDonald's Operators political advice. Talk about letting the fox into the barnyard ! 

Making predictions is a risky business but I think his future will go in one of two directions.

If Hillary Clinton wins the White House Gibbs will have an opportunity to leave McDonald's 
and go to work for organized labor joining their reenergized efforts to organize McDonald's 
and eventually the entire industry. With the internal knowledge he's gained at McDonald's 
he would be a great asset to the SEIU and others.

If Hillary Clinton does not win the election the Clinton crime family will go down in flames. 
Keep in mind, the Democrat party has historically been dominated by family hierarchies: 
Roosevelts, Kennedys, Clintons, etc. If the Clintons have to spend the rest of their lives 
avoiding prison they won't have much political clout. The party will be leaderless. Into that
void will step the Obama family.  Lacking a taxpayer funded staff they will need to bring 
together their loyal henchmen to rebuild the Democrat party. Gibbs could be a key figure 
in that reconstruction and go on to be a power player in the  2018 and 2020 elections. 

It's unlikely Gibbs will be around to celebrate his two year anniversary in Oak Brook. But, 
along the way, he'll have done great harm to the McDonald's Operator community. Nothing 
good can result from taking business advice from a liberal.

October 29, 2016

Why Does Deborah Wahl Publicly Disclose Proprietary Info?

McDonald's USA chief marketing officer addresses Masters of Marketing conference

While McDonald's Operators receive nasty, bullying E-mails negating their American right 
to free speech, Deborah Wahl wanders the land openly discussing McDonald's marketing plans. 

How does it benefit the McDonald's system when she shares McDonald's plans or corporate philosophies with her advertising industry peers? It doesn't. It's networking for her personal career path.

Hey, it worked for Mary Dillion. She worked at McDonald's for five years, gave a lot of speeches, and left to head up a cellular company. She is now CEO of the very successful Ultra cosmetics.

Disclosing proprietary stuff can be good for one's career - if you're a McDonald's executive.

Is this all she does?


Sonic to Franchisees - Raise Wages

Fast-food chains have long argued that due to thin profit margins.....

Domino's is a Digital Company That Also Sells Pizza

How Domino's Pizza's Tech-Savvy Dominance Is Deleting Its Competition

October 26, 2016

BK Dresses Up As a McDonald's

Click to enlarge

Kinda funny, kinda dumb

Vegi Burgers Again

“Consumers are very hungry for a solution from plant-based meats,” Brown tells Fortune.

How many decades have we been hearing that?

Beyond Meat's Plans Broader Rollout for Vegan 'Beyond Burger'

October 24, 2016

Are McDonald's Operators "Insiders"?

Do McDonald's Operators possess the necessary clout to be corporate "insiders"? Keep 
in mind this entire subject centers around one activity - trading shares of the company. 

Here's how website Investopedia defines insiders.

"Insider is a term describing a director or senior officer of a company, as well as any

person or entity that beneficially owns more than 10% of a company's voting shares.
For purposes of insider trading, the definition is expanded to include anyone who 
trades a company's shares based on material nonpublic knowledge. Insiders have to
comply with strict disclosure requirements with regard to the sale or purchase of the 
shares of their company."

Since there are no Operators on the McDonald's board of directors or as senior officers I'd suggest that any McDonald's Operator who owns 10% or more of McDonald's voting shares should refrain from communicating with Wall Street analysts.

Others still have their first amendment rights.

Here's what the Securities and Exchange Commission says

Here's the Investopedia link

Again, this about trading shares of companies. It's not about someone you trust asking,

"How's business?"

Burger King Installing Drive-Thru Timers

Timers? We had drive-thru timers in our McDonald's stores in the early 1980s.

Burger King works to improve service speed

California's New $10.00 Minimum Wage Brings Joblessness

Isn't that a given?

California Joblessness, Taco Bell Mean Bad News For Jack in the Box

Beware Fake Surveys

It seems that some McDonald's Operators are receiving E-mail solicitations to participate
in an on-line survey on Surveymonkey. This is obviously an extension of the SEIU's effort
to organize McDonald's.

McDonald's Operators should be assured that Franchise Equity Group has nothing to do
with this particular survey.

We don't use on-line, website-based surveys. Probably never will. Private E-mail  is our 
only survey method.

The SEIU did not get E-mail addresses from here. I started collecting Operator's private 
E-mail addresses in 1996 and have NEVER sold or shared my list of addresses with anyone
- never will.

I do use my list to advertise McDonald's stores for sale. The seller provides the necessary information and I send it out. The seller never sees my list.

There is also a producer and a couple of writers sneaking around telling folks they are 
working on a documentary film about the process of opening a QSR restaurant. Give me a break - where is the market for such a film?

As if it's something to boast about, they use sleazes like Morgan Spurlock (Supersize Me) 
and Michael Moore (Where to Invade Next) as film industry references.

Obviously, such a film would be an SEIU backed attempt to attack American business and
criticize the restaurant industry.

If the wrong person gets elected POTUS these are going to be the good old days.

October 23, 2016

Management Promises Wall Street More Discounting

From the call transcript:
"Earlier this quarter, I spent some time in Phoenix and Scottsdale in Arizona, and then went
up to Portland in Oregon, and one common success factor in both those regions, both of them are the strongest sales regions we have in the U.S. currently, and what was also particularly successful there was they were complementing local beverage value alongside the McPick 2 platform alongside fundamentals of running better restaurants. So, there are these pockets 
of great success that we’re looking to lift and localize and then launch rapidly."

Jim Cramer -- McDonald's Has Its Mojo Back - TheStreet

Jim Cramer says the CEO has got the company's franchise owners fired up and willing to do more to generate sales. 

McDonald's Q3 2016 Results

McDonald's CEO on Q3 2016 Results - Earnings Call Transcript

October 20, 2016

CBS News on ADB and Operator Survey

“We are discounting almost everything,” said one respondent to the Nomura survey 
whose name wasn’t disclosed. “It is all about top-line sales, not running profitable 
restaurants. That’s why operators need several restaurants today, as the return on 
their investment dwindles.”

What McDonald's needs: A follow-up to all-day breakfast - CBS News

October 18, 2016

More Coverage of Operator Survey

Lots of Operator quotes in these articles.

McDonald’s Operators: Focus on Our Core - βurgerβusiness

Franchisees: McDonald’s same-store sales slowing - NRN

McDonald's Franchisees Are In A Funk — Like Its Stock - IBD

McDonald's Turnaround Needs a New All-Day Push

From the article:
"And then there is the 1,000-pound gorilla in the space: The new guy leading the 
all-important U.S. business has a giant hole in his resume. Chris Kempczinski, who 
will take over Jan. 1 as head of McDonald's U.S. from retiring Mike Andres (who 
was the architect of the U.S. turnaround), has never held an executive position at 
a restaurant prior to joining McDonald's. It's unclear from his LinkedIn profile if 
he has worked in a restaurant at all during his career."

McDonald's Turnaround Needs a New All-Day Push - TheStreet

October 17, 2016

OPNAD at Two Percent ?

From time to time we like to have some fun arguing about whether McDonald's Operators 
are obligated to belong to OPNAD and if the pledge card is a real contract or just a 50 year 
old bluff.

Now I hear a rumor that during September's meeting OPNAD discussed increasing the 2017
contribution rate to 2.00%. 

First, congratulations to OPNAD on keeping the rate at 1.60%. But, as I understand it, 2017 
is the second year of the current pledge period.

If the OPNAD pledge card is a "contract" signed by individual McDonald's Operators how
can a group of their peers even discuss changing the terms of that contract? Wouldn't that require all new pledge cards with new terms?

Of course, I haven't seen an OPNAD pledge card in a few years. Do the 2016/2017 pledge 
cards say "as OPNAD will determine from time to time" in reference to the percentage 
of sales pledged?

McDonald's Operator Comment of the Day

Anonymous has left a new comment on your post "WSJ: Karen King "Retiring"": 

"MCD has never explained what they want to be or look like after all of these changes have

been completed. We know that technology will play a much larger role at the store level and 
in Chicago. But, no one knows what that means in terms of cost and operations. I hate to see 
Karen King leave but downsizing in general is a good thing, IMO. MCD has become too fat 
and sloppy and the employee's have been running the company more for the benefit of the 
employee's for far too long. Refranchising 4000 stores will make a huge difference. Many of 
those stores will require massive reinvestment. However, at some point the system needs to
become focused on selling our food and not just making changes. When I say selling food 
I'm not talking about selling discounted food. I understand that regional managers will begin 
meeting with individual operators to ask for support for the beverage program against co-op 
leadership recommendations. The co-ops need to stay united. "

WSJ Covers Oak Brook "Retirements"

McDonald's Faces More Executive Departures -- WSJ -

McDonald's Operator Survey

Thanks to those Operators who participated in our latest survey - CNBC reports

October 15, 2016

How Much Did Your Favorite Burger Cost 30 Years Ago?

                                          Analysis from

MCD Takes $130 Million Charge To Sell 4,000 Stores

Back in the good old days selling McOpCos was a profit center for the company.
More details to be released Oct 21.

McDonald's to book $130 million restructuring charge - MarketWatch

October 12, 2016

Famous Dave’s Names One of Their Franchisees as CEO

Famous Dave’s of America Appoints Restaurant Industry Veteran Michael W. Lister as CEO

Only One in Five Millennials Has Ever Tried the Big Mac?

This is rubbish. Four out of five millennials have NEVER eaten a Big Mac? 

A complete fabrication.

I have two millennial children in their mid-20s and over the years they've been my in-house focus group on everything from Happy Meals, McCafe, Angus, etc. In the process they've 
eaten many, many Big Macs. During his football years my son ate Big Macs two at a time. 
If she could, my daughter would put Big Mac sauce on every sandwich.

When we feed groups of their millennial friends it's either pizza or multiple bags of Big Macs.

I'm sure there are millennial food snobs in New York City or Chicago who have never eaten
a Big Mac but I'd bet the ratio is the reverse. Maybe one in five millennials have never eaten
a Big Mac, but not the majority. 

Most of what we hear about marketing to millennials is distorted because - well - it's written
or spoken by millennials.

Why the McDonald's Big Mac is America's burger - Business Insider

October 5, 2016

Robot Revolution Skips Restaurants

Even with rising wages, robot revolution skips restaurants

QSR Magazine's Latest Drive-Thru Survey

McDonald's was not the fastest but beat the 226.30 sec average. That's not bad considering that, other than Chick-fil-A, the typical McDonald's DT serves two to three times the customers than these other chains.

Overall survey results are HERE
Chainsort descendingAverage Time (in seconds)
Burger King201.18
Carl's Jr.268.89
Dunkin' Donuts181.03
Panera Bread267.90
Pollo Tropical231.23
Taco Bell220.11
Taco Cabana240.73

October 1, 2016

Coke and Dunkin Working Together

"Dunkin' Donuts, which is largely franchised, said it would equally share with
qualified U.S. franchisees the net profits it receives from selling the ready-to-
drink coffee through outlets outside of its restaurants."

What a concept - like how McDonald's Operators share in the profits from

grocery store McCafe sales?

Dunkin launches 'ready-to-drink' product

McDonald's Adds A Webseries To Its Menu

Forbes reviews McDonald's videos

House Approves Delay in Overtime Rule Implementation

Nation's Restaurant News Reports

September 21, 2016

McDonald’s High Growth President Leaves Chain

Another accountant bites the dust - NRN reports

What's Up With OPNAD?

Why all the arm twisting to get OPNAD back in the discounting and price fixing business?

In about forty days McDonald's USA is going to be up against one of the balmiest, warmest, zero snow winters in recorded history. Management knows that a normal or even a mild 
winter could send sales negative. As usual the only Oak Brook answer is more discounting 
and couponing.

Can OPNAD stand up to the pressure?

Chipotle is losing customers to McDonald's

Business Insider reports

September 15, 2016

Speaking of McDonald's Operators

It's been 2 weeks since stunning changes in McDonald's USA management were announced. 
While I haven't communicated with every McDonald's Operator I've heard from enough to 
form a consensus of their opinions about the move:

1 - Appointing a new hire with ZERO McDonald's operational experience as President of McDonald's USA indicates that management and the board of directors no longer prioritize 
Quality, Service, Cleanliness, or restaurant profitability.

2 - Appointing someone with ZERO franchising experience as President of McDonald's USA indicates that management and the board of directors has no respect for the Operator community or interest in relations with that community. Any yokel can handle McDonald's Operators.

3 - It doesn't really matter because McDonald's USA presidents come and go so fast they 
don't have much impact on the system. The real damage will be done by the people who 
made this decision.

September 14, 2016

HONG KONG (Reuters) - Fast-food giant McDonald's Corp (MCD.N) has received final offers from at least three bidding groups for its China and Hong Kong outlets, with global private equity firms Carlyle Group (CG.O) and TPG Capital teaming up with Chinese partners for the business worth up to $3 billion, sources told Reuters.
Carlyle has joined with Chinese state conglomerate CITIC Group, while TPG has teamed up with mini-market operator Wumart Stores on their separate bids, said the sources, who declined to be named.
Real estate firm Sanpower Group also made an offer for the assets. The company has previously said it was teaming up with Beijing Tourism Group.
TPG and Carlyle declined to comment on their final bids, while CITIC, Wumart and Sanpower didn't return requests for comment during a holiday in mainland China.
McDonald's reiterated a previous comment that it is making progress in finding a long-term partner for the assets.