May 2, 2016

Don't Miss This Interesting Operator Comment

I'm more optimistic than I've been in a long time with the leadership being provided by Easterbrook. However, I don't think he or others fully understand how many serious problems are being created by the regions. Too many Regional Managers, QSC VP's and their immediate staff have personal agendas, self importance, personal ambition and little concern for the system. MCD does not care about operator equity or about older operators leaving the system. All of that is just fine with them. They are allowing an environment of "Us against them" that is, the Region against the operators to grow and there is little oversight from Oak Brook. Overall compentcy in the regions have declined. Real Estate, finance, field service and leadership are terrible. The company recently closed over 200 stores that should have never been opened in the first place. Decisions are being made that have little to do with good business judgment or positive cash flow. Social issues are more important than profitability. I realize that new leadership has a big mess to correct but the entrenched staffing and attitudes are huge to overcome. In the meantime debt levels at the stores are increasing although sales are up they are not up enough. There are too many stores, too much discounting and too many operators. Smaller operators in average volume stores cannot participate in required reinvestments, payroll increases, fend off law suits without taking on more and more debt and accepting smaller returns on their own investments. Many can't afford to retire and the longer they stay in the harder it becomes. Many if not all of these problems have been self inflected by poor leadership by the company and by giving too much authority to the regions. Leadership at the top has got to get a firm grip on these issues and soon.
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