May 24, 2018

Chipotle To Add Hybrid Drive-Thrus

Any restaurant with a digital order system that relies on the customer's prediction 
of when they'll arrive at the restaurant is going to serve a lot of cold food or suffer 
lot of food waste.

Chipotle is adding drive-thru lanes, but you can't order food at them

May 23, 2018

Questions About McDonald's Chairman

"At Wells Fargo's annual meeting in April 2017, he received just 53% of shareholder votes, the lowest among the 15 board nominees. Such a result was seen as a harsh rebuke, since the directors run unopposed; it's rare in such corporate elections to receive approval ratings below 90%."

McDonald's Chairman Trailed by Legacy of Wells Fargo Scandals - TheStreet

May 22, 2018

May 19, 2018

Another Source of McLeaks

I've never understood why companies allow their advertising people to network with 
other advertising people and even with people from their competitors. 

This week in Chicago The National Restaurant Association is conducting their annual restaurant show. Are McDonald's operations executives wandering the exhibit floor and meeting with competitors or serving on panels discussing McDonald's best practices? 
I doubt it.

Yet, McDonald's advertising and PR people are constantly appearing at seminars, giving speeches at advertising industry events, and networking with a broad spectrum of other advertising folks. 

Why is McDonald's Corp. paying them the big bucks to take time out from their jobs to promote themselves?

But, it works. Former McDonald's ad execs Mary Dillon and Deborah Wahl wandered the 
land giving speeches while on McDonald's payroll and networked themselves into great 
jobs with other companies.

It's pretty hard to participate in such events without leaking things that should not be in 
the public domain.

A recent example - McDonald's senior VP of communications and PR recently participated 
in a meeting put on by AdAge magazine. Why was he there? Why wasn't he hard at work 
in Oak Brook or attending Co-Op meetings? I'm sure it was good for his ego but how did
his attendance at this conference benefit the McDonald's system? Maybe his attendance 
did harm to McDonald's.

If McDonald's Corp. wants to build market share they should keep their folk's noses to the grindstone and make them do some actual work instead of networking at meetings in search 
of their next job.

Please read this article and ask "why".

McDonald's PR chief on how to respond to negative news

May 18, 2018

"Leaks" in the McDonald's System

Apparently the nasty-graham McDonald's Operators received from McDonald's USA legal several weeks ago claimed that communicating with others gave some possible advantage 
to "our competition".

In other words, McDonald's Operators leak proprietary information. Nothing could be further from the truth.

If there are leaks in the McDonald's system - Many of the leaks come from McDonald's upper management during discussions with Wall Street analysts.

Case in point, is it any wonder that McDonald's major competitors were ready to launch new value platforms at the same time McDonald's USA launched the $123 menu? McDonald's management had been publicly blabbing about the new menu during much of the fall of 2017.

Prior to launch the analysts knew more about the $123 menu than McDonald's Operators.

The rest of the leaks in the McDonald's system come from employees of McDonald's outside advertising agencies and PR firms.

These people are loyal to no one and are always networking for their next job. It's important they establish connections with reporters who cover the advertising business. They sing like birds.

So Operator leaking is not the problem. Trying to impress shareholders and disloyalty among agency people is the problem.

May 17, 2018

McDonald's Needs This Guy

"We’ve been saying for a long time that it’s not sustainable."

"they’re hurting the profits of the operators responsible for
running the restaurants."

Jack in the Box CEO Lenny Comma takes a shot at QSR discounting

May 12, 2018

Franchisee and Franchisor Attorneys

Attorney Jeff Goldstein lists his best competitors

"Last, I note that I have always held the very strong belief that franchisees should use 
attorneys who represent only franchisees and dealers, and who do not represent both franchisors and franchisees (or who represent only franchisors). I have written extensively about what I view to be the inherent conflicts in such dual-representation, and how such 
dual-representation is counterproductive to the overall mission of franchisees and dealers. "
Jeff Goldstein

May 11, 2018

Thoughts on McBullying

We've had a week to discuss the nasty-gram from Oak Brook about franchisees working with Wall Street analysts and others concerning their business.

After everything I've heard about this memo, I have one word - nonsense.

Franchisees and analysts communicate all the time - not enough - but all the time. And analysts love to boast about these communications in the reports they publish. They don't name names, the term is "channel checks".

Please keep in mind that sell-side analysts live in a very regulated world. We all skip over the last few pages of the typical sell-side report because they contain the fine print "disclosures and disclaimers" related to the report.

If working with franchisees was in any way inappropriate or illegal no analyst would mention franchisees in their reports.

Buy-side analysts are always looking for franchisees to talk with and research firms such as the two listed in the column to the right don't understand if a franchisee declines to join in their work.

Here's fun example: Carrols, a publicly held company (NASDAQ:TAST), is the largest Burger King franchisee with over 800 stores. They issue earnings reports and conduct investor conference calls just like McDonald's. They communicate directly with analysts and investors about their franchised business and are required to do so. Does Carrols get letters like this from Burger King Corporate? I don't think so.

As you can tell, there are no hard and fast rules for this type of communications and people who work in Oak Brook don't write the rules.

Speaking of Oak Brookers, I think this memo was written by a team lead by the contemptible Robert Gibbs and the general counsel of McDonald's USA was made to sign it in hopes of making it more intimidating.

I can't give McDonald's Operators legal advice but I can encourage you to reread the memo a couple of times. I'm told it's full of words like "can result", "may", "may constitute", "proper channels", "unnecessary distraction". All in all, pretty nebulous stuff.

As the McDonald's Operator community comes under more stress in the future you can expect more of this McBullying.

May 4, 2018

McDonald's Operator Comment of the Week

"According to McDonald's Corporation, I am an independent business owner which means I can share the results of my business within anyone I want, I can also share my perspective on current promotions & how they are performing in my business with anyone I choose. I would never reveal or comment on upcoming or unannounced operational or promotional items or McDonald's Corporation results before announced to the public. But I would also never let Mr. Koulouris or his legal council suppress my voice on my business, I do not fear a cease & desist letter followed by a lawsuit. If something such as that ever occurred I would subpoena every known document, electronic file, personal phone logs from known vendors and corporate leakers, the legal fallout and SEC investigation would start a criminal investigation against McDonald's current and former executives my restaurants value would be far greater for them to get rid of me than the current value, of course at that time any poor grading results would be clear retaliation." 

May 3, 2018

Security at Franchise Equity Group

When franchisees ask, "What security precautions do you use"? My answer is "all of them".

But it's easy because I'm the only one here. There are no employees, no file clerks, no office manager - just me. There's no one to look over my shoulder or sneak a peek at a memo or a computer screen. No one to overhear conversations.

All family members are off doing their own thing - no Next Generation here.

In this digital world I've grown to dislike paper. When I finish a project everything goes in
the shredder. I also dislike keeping files involving ancient history. If it's not something 
I'll need in the next 48 hours it goes to the shredder.

And of course, I don't blab. I would never (and have never) told anyone anything about my other contacts. 

My overused example is - if I was talking to two siblings, one on the west coast and one on 
the east coast - neither one would ever know about those connections unless they told each other. But they wouldn't hear it from me.

And there's much more but my security precautions don't allow me to discuss this further.

There is no need for paranoia - no matter how many letters the bullies send around.

NRN on QSR Value

Quick service puts focus back on value - Nation's Restaurant News

May 2, 2018

9 Minnesota Burger King Restaurants Close in Minnesota

Two reasons this is interesting:

* This is my original Mcstomping grounds.

* McDonald's Operators should follow Burger King, not just as a competitor but as a 
   business model. Many of the changes McDonald's Corp is making to the domestic system 
   are imitations of what Restaurant Brands International has been doing to Burger King -           selling off company stores, going to larger and larger franchisees, etc, etc.

                  9 Minnesota Burger King restaurants close in Minnesota - Business Journal

Face It - Environmentalists Are Nitwits

Of all things to keep out of the waste stream, they pick the tiniest item? There aren't enough decimal points to calculate the percentage of waste that plastic straws make up.

I've participated in a lot of beach clean-ups, it's a great way to spend a Saturday morning. 
I don't remember plastic straws being a big factor. I do recall that most of what we were picking up came in from the surface of the ocean, obviously from fishing boats or cruise ships. Any food packaging waste is faded and deteriorated from the sun and salt water and was obviously out there for a long time. It's not as though people go to the beach and leave 
cups and straws in the sand.

Environmentalist wackos start every initiative with the question. "How can we cause maximum discomfort in other people's lives?"

McDonald’s pushed to ban plastic straws in the United States – Orange County Register

Restaurant Business on McDonald's Traffic

McDonald’s finds again that traffic is hard to come by - Jonathan Maze

April 20, 2018

Walmart Brings McDonald's CEO on Board

Walmart Nominates McDonald's CEO To Board -

Why Pizza Has Little to Fear from 3rd-Party Delivery

Reporter Jonathan Maze covered the Restaurant Leadership Conference in Phoenix this
week. Here's more reporting on restaurant delivery.

"If they (delivery companies)charge more to restaurants—and many, many chain executives
we speak with complain about the losses they take on delivery orders—then those companies will be less likely to promote or push the service."

Why pizza chains have little to fear from third-party delivery

The Ever Tightening Labor Market

Is Uber competing with restaurants for workers?

April 19, 2018

Is Starbucks Making Things Worse?

Having been around food service and also having experience dealing with the media ...
in my humble opinion Starbucks is turning this unfortunate event in one store into a 
national scandal.

Starbucks could have terminated the managers who made all the wrong decisions, 
maybe closed that store for while, and conducted a national internal audit of their own 
corporate culture.

But no, they plan to close 8,000 stores for a one day training effort. So instead of
admitting they had a problem in one store they are demonstrating that they have a 
systemic nationwide problem.

This is one publicity stunt that will backfire, turning an embarrassment that would
have faded away in a few months into something that will be with the brand for years.

Could McDonald's gain fresh hangout status amid Starbucks controversy?

April 16, 2018

Why McDonald's Stock Turnaround May Fizzle

Why McDonald's Stock Turnaround May Fizzle - from Investopedia

And Now a Word From the Left Wing Wackos

The contemptible Robert Gibbs has a dream job. In addition to his huge McDonald's salary and perks he gets to infect the system with fake science from the Obama administration.

The beauty is, Operators will absorb the cost of many unnecessary changes to the system.

Then Gibbs will leave to assist with Senator Elizabeth Warren's 2020 presidential campaign.

April 12, 2018

Hepatitis A Warning Linked to McDonald's in Kentucky

McDonald's stock drops on hepatitis A investigation - Business Insider

"Unfrozen" Will Be The Next Disney Movie

I've sampled enough unfrozen, HOTG sandwiches to have some opinions in my role as 
a McDonald's customer.

Is it a better product? ... Sometimes.

As I consumed the first few QPCs I was struck with the thought, "For 45 years McDonald's
has been over-cooking all those millions of quarter pound patties".

I've sampled about 40 sandwiches over the past few months and my impressions are:

* In a Quarter Pound with Cheese it's better than frozen but only when everything is 
   done perfectly.

That's because the QPC is a pretty simple sandwich.

 * In the Signature Sandwiches the difference in meat patties is unnoticeable. There is so much going on in each of those sandwiches, so many flavors, so many textures that the actual meat patty gets lost in the battle. This lack of difference will become even more noticeable as the builds become more exotic, Angus flavoring, etc.

* One in five patties were pink enough to have failed previous food safety standards. Now, 
don't get me wrong, I like them that way. As a McDonald's Operator I'd often cook a couple 
of quarter pound patties as a low carb, high protein lunch. They were quite pink in the center and I would have never served them to a customer.

However, McDonald's has been overcooking beef patties for so many decades McDonald's customers don't know what a "medium" patty looks like. I foresee many returned sandwiches.

* I was served a few sandwiches that were dripping with fat (very unusual at McDonald's). And, about a third of the sandwiches did not have the brown wrapper, just the box and
the sandwich. That wrapper is essential, especially with the Signature sandwiches and if 
the sandwich is eaten on the road.

* There is a perceptible slowing of service times at the stores I visit regularly. I'm seeing 
more cars pulled to the side and more long waits at the presentation window. Since I'm 
not in the kitchen I can't tell what's holding things up or if this slow down is related to 
HOTG. It might be the nationwide staffing problems. Maybe it's the three patty thing.

Will this change increase sales at McDonald's? Will it be worth the hassles and risks? I'm 
sure there will be a lot of trial when the advertising begins but only time will tell if it 
will build sales.

Meanwhile, Wendy's and other competitors will continue to bark about frozen beef at McDonald's. Unfrozen quarter patties will not solve that problem.

April 7, 2018

Better Hope That High Volume Store Isn't Too Valuable

In Washington DC McDonald's is selling the land under a store for $31 million. 

It's hard to get a rewrite if McDonald's Corp. sells the property

JBG Smith pays $31M for NoMa McDonald's - Washington Business Journal

April 5, 2018

5 Reasons McDonald's May Be Unstoppable

Normally we don't pay much attention to what's published on Seeking Alpha (except for their transcripts) because most of the articles are written by want-to-be analysts looking 
to make a few bucks for the article.

But, this is written by a substantial company and their comments about refranchising and McDonald's Operators are interesting.

5 Reasons McDonald's May Be Unstoppable - Seeking Alpha

April 2, 2018

What Do Hotels Have To Do with Food Deliveries?

"Incremental Sales" can be a misleading term. Of course in a franchise system corporate 
and shareholders love incremental sales because they get their slice of the action no 
matter what happened down the line.

The example of a hotel operator being happy to pay a commission to rent an empty room 
is apt. The room's sitting there ready to go and all the hotel has to do is hand the guest 
their key and re-clean the room the next day.

But incremental sales at a restaurant are different. The restaurant operator has to pay 
for the food, packaging, labor,and all other misc. costs. Plus pay the franchisor rent and royalties on the sale. Plus put up with a distraction in their operation. In the end, the 
restaurant operator absorbs all the liabilities of a delivery order and would probably be 
better off without that "incremental" sale.

Thanks to "anonymous" for this link.

What the fast casual industry can learn from hospitality's $2.5 billion braw.

March 31, 2018

Chick-fil-A is On Track to Become the US's 3rd Largest QSR

Remember five years ago the leftists were going to shut Chick-fil-A down?

Union Behind The 'Fight For $15' Cuts Funding For Fast-Food Campaign

"But for all its successes, the movement has not translated into more dues-paying union members for the SEIU"

Reporting by the very liberal Huffington Post

Less Clowning Around - Even For Ronald

"Then McDonald’s terminated its regional Ronald McDonald program at the end of last year, though it’s vague about the reasons for the move. “Ronald remains an important part of our brand and he will continue to appear at local events,” said a McDonald’s spokeswoman. “We are just moving to a centralized program.”

Doesn't that apply to everything happening in McDonald's USA?

It’s the worst time in history to be a clown — they just want you to love them again

March 29, 2018

McDelivery Risks

"Olive Garden agrees that the equation doesn't work. "We're not willing to give up 
20% to 25% just to get a sale," Darden Restaurants (DRI) CEO Gene Lee said in 

Why Uber Eats and GrubHub partnerships are risky for restaurants - CNNMoney

March 28, 2018

Tim Hortons Franchisees Kicking Butt and Taking Names

"This is just one more in the string of ill-conceived programs brought forward by a group of executives who do not understand foodservice, franchise operations or marketing," 

Gosh, that sounds familiar.

Tim Hortons and franchisees clash over 'ill-conceived' $700M renovation plan

March 27, 2018

Ghost Restaurants Might Have an Afterlife

A Ghost Restaurant is a kitchen located in an obscure place that feeds the delivery stream 
for that brand. The ghost restaurants I've read about are one-off new brands in big cities.

But it's got to be difficult to scale an operation that customers have not heard of and can't 
visit. Web sites and brochures in hotels will only take them so far.

But what about an established national brand with universal name recognition?

It could work like this - a franchised restaurant chain launches a delivery program using an outside food delivery service. The company sets things up in such a way that their franchisees absorb all the costs and of course do all the work. Eventually this establishes which markets will be high volume delivery markets. 

The company then establishes "Ghost Kitchens" in the middle of the best delivery markets.

The build out is simple - a modern kitchen layout in a warehouse or in the basement of a building. The most important location requirement would be easy in/out for the delivery vehicles.

No drive-thru, no dining room, no sign package, no crew uniforms, just a kitchen. They probably wouldn't even need a POS.

Once the kitchen is ready the franchise company gives the delivery company a list of zip 
codes where all deliveries will be routed to the new company operated kitchen.

What about the industry wide movement away from company operated restaurants? This
is something different. It's the restaurant business reduced to it's simplest form. It should 
be extremely easy to run and very efficient (even a McOpCo manager could run it). If it 
does a decent volume with free standing restaurant menu prices it could be very profitable.

No need for franchising. The capital outlay would be small, and again, the operation would
be simple.

The above speculation assumes the delivery business will be huge for QSR restaurants. 
That's still doubtful. With nearly all restaurants getting into delivery the sales are going to 
be spread so thin that individual restaurants will not profit from delivery.

Food delivery services make way for Baltimore's first 'ghost kitchens' - Baltimore Sun

March 22, 2018

How Much Will McDonald's Operators Pay for Fake Science?

Click to enlarge
"In other words, pretty much the entirety of the 20th century warming in the U.S. “measured” by the world’s primary temperature record gatekeeper may be fake."

Nat Oceanic Atmospheric Admin Data Tampering - 'Science Doesn't Get Any Worse Than This'

Flawless QSC Pays Off

Remember when the left set out to destroy Chick-fil-A over gay marriage?

When it comes to reputation, Chick-fil-A is king

March 20, 2018

Fake News About Fake Science

With all the challenges McDonald's 
faces in the future - this politically 
correct  garbage will keep the system 
from growing.

And bringing in Obama's anti-business henchmen will only distract from the 
real world of sales and profits. >>>>>

Maybe they'll have Al Gore address 
the Orlando convention?

On the menu for McDonald’s: Cut greenhouse gas emissions - AP

March 17, 2018

Franchisees Push Back

Amid industry challenges, franchisees get serious about protecting their profits

The NLRB Saga Goes On

Sen. Elizabeth Warren is all in with destroying the USA franchise industry yet, if she ever runs for POTUS,  a 
large number of McDonald's corporate employees and executives will gleefully support her. And the Operator 
PAC will send her money.

Labor Board Scrambles to Avoid Pro-Worker Ruling, Lawyers Claim - Bloomberg

March 14, 2018

McDonald's Accountant Talks Operations and Marketing

On Wednesday McDonald's CFO presented at a Bank of America Conference. This comment 
appears to be gibberish. Is this some kind of McNewSpeak? 

I understand incremental sales, I understand break-evens and contributions margins.

"And so on a margin percentage basis, the franchisees get a lower margin percentage on 
this sale than they do if someone came to the front counter because the added cost is this commission. But in terms of additional dollars, the fact that 70% incremental is giving 
them clearly more dollars and our breakeven, if you will, incrementality is substantially 
below 50%. So there's a lot of room, let's say before we get anywhere close to breakeven 
from an incrementality standpoint."

Here's a transcript of the presentation:

McDonald's Management Presents at Bank of America Consumer - Seeking Alpha

March 13, 2018

McDonald's USA Increasingly Complex Operations

McDonald’s Tech Features Are Pushing Human Workers Out the Door - Bloomberg

McDonald's to Make Quick Changes to Value Menu - RBC

Analyst David Palmer is out with expanded comments on the McDonald's value platform.
Here's an excerpt from his report.

"So what now for McDonald’s? In our view, McDonald’s will likely stay committed to the
$1, $2, $3 menu with some other marketing adjustments that will be supported by its 
made-to-order fresh beef burger launch. While value remains a key pillar in the US 
turnaround—there are others including ongoing food upgrades, a massive reimaging 
campaign, and improving convenience (mobile order and delivery). McDonald’s is asking
for significant investments and has a new grading system that is designed to bolster in-restaurant execution, which may result in fewer, better franchisees in the system."

Trouble is, the people deciding on who's a "better franchisee" know very little about what 
it takes to be successful in McDonald's.

McDonald's (MCD) Expected to Make Quick Changes to Value Menu - RBC

March 6, 2018

Unfrozen Ten to One is Inevitable

Oak Brook has handed Wendy's a marketing hook for the rest of the year (or longer).
Wendy's has McDonald's by the apron strings and they are not going to let go.

McDonald's USA will have no choice but to move to all unfrozen beef.

Beyond this article McDonald's Operators should view the Wendy's Twitter feed for
the complete thread. I think it'll make you nervous. 

Wendy's slams McDonald's in fresh-beef burger battle - Business Insider

The Wendy's Twitter account is at

Unfrozen QPCs

USA Pres. - “Over the past two years, we have been listening to our customers and evolving our business to build a better McDonald’s."

Says a guy who knows nothing about running a real McDonald's.

McDonald’s Starts Rollout of Fresh Beef Quarter-Pound Burgers, Cooked Right When Ordered, to U.S. Restaurants

March 3, 2018

McDonald’s Canada Crops the Golden Arches

I have a good friend in the outdoor sign business. His only complaint is that his clients often want far too much information on their billboards. Even with that my first impression was 
that this sign concept was too simple. But, after looking at all the different iterations I think it's very clever and just the McDonald's colors will do the job, at least for directional billboards.

McDonald’s Crops the Golden Arches to Direct You to the Closest Restaurant – Adweek

February 27, 2018

McDonald's Dates Disney (Again)

Let's hope the relationship is different this time. In previous alliances Disney lead McDonald's executives and McDonald's Operators around on a very tight leash.

February 20, 2018

February 15, 2018

February 8, 2018

Profitable Delivery? What A Concept!

YUM CFO: “We did a thorough process understanding the economics to franchisees and to us,” CFO David Gibbs said. “It was a really important process to us, to make sure franchisees had good economics.
“We think we have a deal our franchisees will absolutely embrace.”
Yum Brands to invest $200M in Grubhub