from Kallowski o/o survey• “The people running our business today have no concept of what our managers andcrew are going through.”• “Not sure if there are relationships; don’t know many people. I think our region is goingto have another outstanding year.”• “Much more dictatorial today.”• “We need some operations people in McDonald’s upper management.”• “I am concerned that we have NO comprehensive plan for our business. It feels like weare throwing stuff on the wall. I am concerned that we roll out New Programs likescheduling during our high-volume quarter and nobody trains us. I am concerned that Iam told to buy a new McCafe machine and nobody can explain how we will sell more. Iam concerned that we have less and less control over what I can do with my Franchise.I am concerned that the larger operators are going to run inferior operations and makethe situation much worse. I am concerned that I missed another window of retirement.”• “My region [is doing funny things with] pricing… [I have reason to believe Corporatedoesn’t like what I do with my pricing]. I have been informed I will be held accountablefor transactions in the future. I do believe, however, that focusing on the quality of ourcore products is a good move. I am behind this effort as an operator.” • “They don’t seem to realize the poor cash flow [situation] many owner/operators are in,and the low morale. Yet they continue to push us to buy more equipment and remodelTHEIR building, regardless of the low-to-non-existence of return on investment andsales.”• “Most people in upper management know nothing about McDonald’s. Make them workin the stores one day a week!”• “McDonald’s is trying to do whatever they can in the short term to raise profits and it will continue to result in sales and guest count declines. We cannot staff the stores. Wecannot afford to staff the stores and McDonald’s continues to push the Operators toborrow money for non-sales generating programs.”• “Who will be [in key senior management positions] at the 2018 worldwide convention?”• “In my 30+ years in the business, I’ve never seen so many Owner/Operators leaving orplanning to leave the McDonald’s system. Something is terribly wrong with this picture.”• “We should not count on future sales increases to fund future debt on the stores. Basedon the past few years, it’s just not going to happen.”• “McDonald’s is changing from a restaurant company to one focused on financialengineering. Franchisees need to sell food to survive.”
This is not your daddy's old McDonald's anymore folks, there's a new Sheriff in town and the road is about to get bumpy! As Mike Quinlan once told me the train is leaving the station either get on it or we'll help you get off. I bet with these bigger franchisees down the road the bigger they are the greater they will fall. Some of these big operator organizations will take on have massive amounts of debt, be over leveraged and when we hit a bump in the road in sales some bankruptcies will happen. Sick back, save your money and enjoy the show!
"the train is leaving the station either get on it or we'll help you get off." Isn't that what's already happening?
There is plenty of blame to go around for why we are in this situation. I know several good operators who love MCD and are ready and willing to retire and get on with the rest of their life with no hard feelings toward anyone. However, they have too much debt. The return we were all told we would get on these reinvestments never materialized. Some if not most of that debt remains on balance sheets sucking cash out of operator organizations and must be paid in any sale. So many areas of MCD have under performed for several years now. Regional staff are not as smart or as committed as in years past. They make poor decisions. There are too many of them. They think it is their spiritual calling to impliment political correctness rather than make good business decisions. The MCD bureaurrucy is a beast dragging it down. The only people that can do anything about it is top management. Easterbrook has made a good start but seems to have slowed down considerably.
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