August 19, 2017

Easy McMoney

On August 8, 2017

McDonald's VP Joseph Erlinger exercised an option on 10,793 shares of MCD at $57.08 - $63.25 and immediately sold the shares for $154.44 per share for a profit of approximately $1,017,870.00

On August 13, 2017

McDonald's VP David Ogden Fairhurst exercised an option on 4,782 shares of MCD at $57.08 and immediately sold the shares for $157.05 per share for a profit of approximately $478,057.00
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August 8, 2017

Don't Mess With The NYPD

NYPD Steps Up Boycott of Dunkin' Donuts After Cops Refused Service
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Nobody Builds Any Equity Without Real Estate Tenure

If the Lake Forest IL store is only 20 years old that means it would have been developed
and opened during the "Convenience Strategy", a misguided effort to impress Wall Street 
by building too many new stores in all the wrong places.

In the 1970s and 1980s McDonald's Corp. did an excellent job of negotiating the
purchase of new sites or obtaining long term leases. Leased sites always had the initial 
20 years set in stone with decades of options after the first 20 years. If management 
couldn't be sure there would be a McDonald's at that location in perpetuity there was 
no deal.

The idea that a store would be built with an opened ended rent number at the end of 
20 years was extremely rare or unheard of.

But that changed during the Convenience Strategy - deals were rushed, inexperienced
real estate people were hired, and uniformed brokers became involved. Many deals 
were, in a word, sloppy.

I don't know anymore about this store's lease than what's contained in this article but
McDonald's Operators should be wary of stores opened in the mid-1990s and should 
become educated on the exact status of each store's real estate. And don't accept the 
verbal representations of McDonald's corporate employees. They won't know a top 
lease from a ground lease.

High rent pushes out Lake Forest McDonald's
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August 6, 2017

Restaurant Analyst John Gordon Looks At Delivery

Your mileage may vary

For a QSR franchise John uses a 5.5% "royalty" so he probably assumes the 
franchisee is paying a fixed amount for rent, not a percentage. McDonald's 
Operators would probably want to add 8/10/12% to that line item.

The "Ad Fund" line would probably be higher.

John uses a delivery commission of 25% - Yikes!

As you can see, even with a $12.00 average check this doesn't work for a QSR 
and it works marginally for a casual dining location, even with a $57.00 check.
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America's Top 50 Fast Food Restaurants

Ranked by QSR magazine
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August 2, 2017

McCashing In - Summer Edition

On July 26, 2017

McDonald's VP J. Krulewitch exercised an option on 11,755 shares of MCD at $75.93 
and immediately sold the shares for $158.38.

McDonald's VP Kevin Ozan exercised an option on 25,322 shares of MCD at $57.08 
and immediately sold the shares for $158.50.

McDonald's VP Douglas Gore exercised an option on 17,286 shares of MCD at $75.93 
and immediately sold the shares for $158.50.

McDonald's VP Fred Borden exercised an option on 4,820 shares of MCD at $56.64 
and immediately sold the shares for $158.37.

Source: Nasdaq.com
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Source: Fox News

Texas Roadhouse’s Thumb's Down On Delivery

“We encourage all of our competitors to do as much delivery as they can so they 
can deliver lukewarm food to their people,” 

Texas Roadhouse’s contrarian view of delivery
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July 26, 2017

Lyft Teams Up With Taco Bell

Said it before and will say it again - With so many QSRs jumping into the delivery business -
I think the market is very wide, but very thin - meaning - a lot of people will order delivery 
from a QSR - occasionally - so occasionally that no chain will do any real volume and with 
the commissions taken by the delivery companies it'll be a real money loser for franchisees.

Lyft teams up with Tacobell, Uber goes deeper with McDonald's
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Updated WSJ Coverage on MCD Q2 Results

This is what you get when you let people who've never operated a restaurant run a 
major restaurant company.

McDonald's CEO says, "McDonald's speed of service has been declining ..... but order accuracy and quality perception scores have improved, he said, adding that he hopes
the self-order kiosks and mobile-order and pay app will shave seconds off order times."

McDonald's Sales Show Improvement
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July 22, 2017

See You LAT-er

Hearing about the Leadership Alliance Team term jumps out: 
"Star Chamber". 

The term dates back to 15th century England and is also the title of a 1983 movie about a panel of judges who decide who lives and who dies.
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July 19, 2017

More On Delivery Services

“A customer will equate the delivery person with your restaurant even if it’s a 
third party, so that’s something to take into account,” 

How restaurants can launch effective delivery services
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July 18, 2017

Chipotle - It's Happening Again

And McDonald's is going to unfrozen beef and chicken? Good luck with that!

Chipotle closes restaurant where customers got sick - Business Insider

The above article mentions a very nasty little website that publishes anonymous 
reports of food borne illnesses as totally credible.

This will give restaurant Operators a little heartburn.

iwaspoisoned.com
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July 15, 2017

This One's Just For Me


This is the story of the McDonald's restaurant where I began my McDonald's career. 
When I was hired the store was more than a decade old so I've slowly learned about
the importance of this store to the history of McDonald's.

McDonald's history buffs or those who liked "The Founder" will enjoy.

Battle over St. Louis Park, Minnesota McDonald’s had big impact on ‘the founder’
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Can Fancy Remodels Save the Fast-Food Industry?

Nancy Luna at Orange County Register
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July 10, 2017

I Get This A Lot



I recently spoke with a McDonald's Operator who is thinking about blowing off some steam
by initiating a conversation with one or more Wall Street analysts. The Operator was having doubts because "I'm not a McDonald's shareholder and I don't follow the stock". 

That's not the issue - analysts don't want your input on the stock market - that's their job. Analysts want to know what's going on in the stores and in the marketplace as a counter balance to the never ending happy talk they get from Oak Brook.

It's common knowledge that I've been working with a certain analyst for the better part of 15 years. In all those years, with countless phone calls, E-mail discussions, and survey work we've never discussed the McDonald's share price or the stock market in general. He's never asked and I've never offered. My job is to help him better understand what's going on with McDonald's Operators, period. 

The same applies to all the analysts I've worked with over the years, no one's ever broached 
the subject. Wall Street analysts would have no reason to discuss share prices or trends with 
me or with McDonald's Operators.
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This Is Why It's Hard To Find Good Help - Video

JP Sears Explains Why Millennials Are Today's Superior Species
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July 8, 2017

High rent pushes out Lake Forest McDonald's, bank could take its place - Lake Forester

High rent pushes out Lake Forest McDonald's, bank could take its place - Lake Forester:



'via Blog this'

McDonald's And Its Debt Binge

I don't often post from Seeking Alpha because it's mostly opinion. But this concise article
is fact based and well thought out.

McDonald's Corporation (NYSE:MCD) - Seeking Alpha
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Deep Thoughts On McDelivery

The first McDonald's franchise I operated was in a growing suburb 
of San Diego. The local high school was bursting with students 
and every household contained at least 1.5 teenagers. This was 
great for staffing the restaurant but there sure were a lot of crew people's "friends" hanging around the place. The first week I was working in the store I observed several instances where a 
drive-thru crew person would be running an order out to a 
parked car and bumps into one of their "friends" at the door of
the restaurant. The crew person hands the order to their "friend" 
and asks them to take the order out to the blue Chevy.

The second time this happened I called an emergency drive-thru 
meeting to establish that no one touches the food in any way 
except myself, my employees, and the customer.

I can't imagine running a McDonald's (or any kind of restaurant) and handing a prepared order to a complete stranger, a person with no accountability to me or my business, who 
would eventually deliver it to my customer.

Change is difficult and every franchise system program has pluses and minus for the franchisee. But this is the first program in McDonald's history where the McDonald's 
Operator has nothing to gain and a lot to lose.

Or is there an upside here for McDonald's Operators?
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July 7, 2017

Missouri Bans Cities' Minimum Wages

St. Louis minimum wage to decrease on Aug. 28
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Fast Food Makes Its Biggest Change Since The Drive-Thru

"Commissions paid to third-party delivery services risk degrading margins, so restaurants need to watch their delivery sales trends to justify the hit,"

"Delivery fees also raise costs for consumers. A McDonald's Quarter Pounder with cheese meal, with a medium Coke and fries, delivered via UberEats to IBD's Los Angeles office from the Marina del Rey area takes an estimated 20 to 30 minutes. A $4.99 "booking fee" is tacked on to the food charge of $6.89 and 60 cents in taxes, bringing the total cost to $12.48."

Investor's Business Daily reports on McDelivery
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July 5, 2017

Land of Lincoln Dead Broke

If a major corporation is moving their headquarters wouldn't it make sense to move a
few miles north or south and get out of the second worst governed state in the USA?

Illinois Senate votes to override Rauner veto of income tax hike, budget - ChiTrib
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June 30, 2017

Qdoba Franchisees Organize

With franchisor on the block, Qdoba franchisees organize
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What's a Pajama Boy?

A few people have written to ask about the origin of the term "pajama boy" that's popped 
up here a few times. In 2013 the Obama administration launched a website to encourage 
young people to sign up for Obamacare. The website featured a picture of a young man who was apparently the model of the new American male (as defined by liberals). The internet 
went crazy with what's now called a meme and circulated many modifications to the photo.

We offer the original pajama boy here but your search will yield some clever modifications.



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June 28, 2017

Who Counts The Votes?

Or, who is keeping track of the number of Operators who've signed on to EOTF?

We hear Oak Brook is claiming they've hit the magical 67%. 

Does anybody think that's true?
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Another Study: Bad News For Full Service Restaurants

Study: Fast Food is Flattening Full Service - QSR mag
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Study: 25% of Americans Stopped Buying Because of Politics

In my humble opinion, there's something to this - there's a change happening in our 
culture. Aside from politics, it seems more and more normal people are, if I may coin
a phrase, "Issue Spending". We've always had extremists on all sides of every issue who 
will boycott, protest etc. But now we have middle of the road parents who won't take
their kids to Sea World because of the treatment of Orcas or those to complaining
about who advertises on what TV show. These people won't be marching and carrying 
signs but they'll beat up a brand on social media and will never pull into that parking 
lot. Anyway, as the one branding expert says, 

"brands shouldn't worry about political biases of consumers and should refrain from 

getting caught up in politics". 

CMO Strategy - AdAge reports
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June 26, 2017

You Can Learn a Lot About a Liberal From Twitter

If you're on Twitter you should take a look at the left leaning views of the 
President of McDonald's USA. He's allowed any views he wants but to vent 
them so publicly shows a lack of maturity and good judgment. And for the 
President of the domestic division of a major company to bash the President 
of the United States (no matter the POTUS' party affiliation) displays his
incompetence on a large scale.


  1. Replying to 
    Great reporting. Fascinating and frightening
  2. Replying to 
    U.S. needs to honor its commitment to the Paris Accord. Our nation's credibility depends upon it, and more importantly, so does our planet.
  3.   Retweeted
    So proud that is a founding member of Catalyst CEO Champions For Change.
  4.   Retweeted
    Twitter notified us that our account was compromised. We deleted the tweet, secured our account and are now investigating this.
  5.   Retweeted
    Historic piece on spy story behind role in 2016 election. What a cover too!

  1.   Retweeted
    Trump elected president. Membership applications at Mar-a-Lago surge. What to do? Double initiation fee to $200K. √

  2.   Retweeted
    "There's scientific consensus on guns—and the NRA won't like it,” says Harvard professor
  3.   Retweeted
    I never thought a serious candidate for US President could be a serious threat against the security of the West. But that’s where we are.
  4. Interesting Fox News website doesn't cover Gretchen Carlson's lawsuit against Roger Ailes. Fair and balanced??