December 29, 2018

West Loop McDonald's Being Remodeled - Already

What does this say about the future of McDonald's service? The store needs "more room for customers to wait for their orders" and they are installing "standing rest pads for customers 
to lean against while waiting".

Yikes! If this is the future of McDonald's then it's a road back to $2 million average unit volumes.

McDonald's remodels restaurant at new headquarters — just months after opening
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December 26, 2018

NLC Survey Says...

Quadrant Strategies' survey of 1,154 McDonald's Operators paints a picture of a company 
that hired a management team off the street and that management team broomed the deep bench of people who actually knew the business. Then they tried to "reinvent" McDonald's.

These events will be discussed in business schools for years to come.

It's particularly interesting that "Operators with more restaurants tend to be more 
dissatisfied with their cash flow performance than those who own only one restaurant".

It wasn't supposed to be that way. Going to a Burger King style of franchising was supposed
to give the larger Operators unlimited ability to reinvest in the business and enhance the McDonald's real estate portfolio.  

Of all the blunders the new McDonald's USA management team has made, long-term, 
changing the franchise model might be the biggest.
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December 19, 2018

What Happened to McDonald's Legacy?

We've often discussed the erasing of McDonald's history. From the closing of the Des 
Plaines museum store to the move out of Oak Brook, there's no doubt that McDonald's 
legacy is a threat to McDonald's management. I've been putting it down to ego and arrogance.

But viewing Blake Casper's Tampa speech we find the answer. Blake stated, 

"Legacy is a derogatory term in most business schools. Something companies need to be cleansed of, not celebrated". 

That explains everything. They learned it in school! Bring in a team of people who are 
educated beyond their level of intelligence and they set about trying to change all that
came before their arrival.

Modern and progressive.
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December 18, 2018

Paul Schrage on McDonald's Service


McDonald's first marketing officer offers some great history and comments on restaurant operations.

"Fast service is why we exist. Fast service is our operational niche in the marketplace."

Paul Schrage addresses the NOA
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December 16, 2018

From Twitter

The franchise (NOA) group is organized and respected that it will likely cost senior management jobs in 2019. Hard to see how the President of MCD USA survives. How can a senior exec with zero experience tell a second or third generation franchises how to run a store?

December 15, 2018

December 13, 2018

Crain's Chicago Reports on Operator Blog Comments

McDonald's Franchisees Flock to Second Organized Meeting
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From Twitter

1,300 people attending the second meeting of the McDonalds franchise association in Dallas this week. Major turnout. That’s three quarters of the franchisee base. Major moment in the company’s history.
    Not only a "major moment" in McD history, has the potential to be a major moment in franchise history. It's not just a McD issue, it's an industry (QSR & franchise) issue.
    .

December 12, 2018

Comments From Dallas NOA Meeting

Hey McDonalds, I am sitting in a room with my Fellow Owners 1,300 strong. 
I am looking around and see Men & Women that have lead this business to
great success in previous years.

I thought you said this is just a small fringe group of Disgruntled Operators. 

We ave found our voice, the train is coming. 

Make McDonald’s Great Again (MMGA) 

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December 9, 2018

How is McDelivery Like McCafe?

So OPNAD is to vote on advertising McDelivery - this is McCafe all over again.

In the spring of 2009 OPNAD began national advertising of McCafe when only about two-thirds of the stores had the product. A lot of customers were disappointed.

On the October call with analysts, management claimed that by the end of the year 9,000 
U.S. stores would have McDelivery. Again, that's about two-thirds of the 14,000 stores. 
Deja vu all over again.

This a particularly dicey problem since some stores will never have McDelivery.

And when OPNAD wastes money like this national sales suffer. The year 2009 was going 
along pretty well with positive same-store sales until McCafe and then sales flattened out. That's bound to happen when advertising a product millions of customers can't access.

Operators will be able to tell a lot about their OPNAD reps when this vote is taken.
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December 6, 2018

Fraidy-Cat Operators

It's disappointing to hear that there are still McDonald's Operators who are afraid to attend Operator-Only meetings.

I submit that those Operators who are still afraid are kind of stuck in the past. They've been busy running their stores and haven't stopped to realize that they are afraid of a company 
that no longer exists.

Let's take a look at McDonald's USA's current ability to retaliate:

* The McDonald's USA management team is incompetent, the gang that can't shoot straight. They don't understand the business, franchising, or franchisees. 

* McDonald's USA appears to be understaffed and no longer has the army of corporate goons with which to bully Operators. They've downsized themselves into impotency.

* McDonald's USA has a serious shortage of McDonald's Operators. This goes back to the incompetence of the management team. Their plan to reduce the number of USA Operators 
is strangling their own efforts in many other areas. If they were to try to force an Operator 
out, who buys the stores? If they deny a rewrite, who takes the store? This is especially important now that there are so few McOpCos.

* The USA management team will spend 2019 distracted by the problems with BBV2020.

* I can see how, if a McDonald's Operator attends a worldwide convention along with thousands of other people, they might come away feeling like a tiny cog in a huge machine. Well, they're not a tiny cog. If there are really only 1,700 McDonald's Operators left in McDonald's USA the individual Operator is part of a very select group.

* And there's safety in numbers. These Operator-Only meetings aren't a dozen nervous people secretly meeting in the back booth of a Denny's. The first meeting involved 25% of USA Operators. The next meeting looks like it will involve more than half of USA Operators. 

How does McDonald's corporate put that many Operators on their enemies list?

If an Operator is afraid to attend such meetings they might be reacting to years of conditioning that no longer applies.

Keep this in mind - The corporate side of McDonald's USA has been pushing hard on BBV2020 yet it's unlikely that the people doing the pushing will still be with the company when the 2020 Worldwide rolls around.

December 5, 2018

Shop NOA

When you visit the NOA website check out the merchandise opportunities.


November 27, 2018

Bloomberg on Changes to BBV2020

“While these companies are generating record earnings, the franchisees are really struggling,” he said. “You have to keep the franchisees happy or things can turn ugly fast.” -
Bloomberg analyst

McDonald's Remodels to Take Several Years Longer Than Promised
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Just In Time For Gift Giving



Some fun videos here

Dunkin' makes quirky 'Espresso-Wear' for hands-free coffee on-the-go - AdAge


Delivery is Wide But Very Thin

As we've discussed before, there are so many restaurants trying to get into delivery and
so many delivery services that the total sales number will be huge but the individual
restaurants will have a tough time profiting from delivery.

Amazon is reportedly halting restaurant delivery service in the U.K.
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November 23, 2018

Panera Founder on Activist Investors

"but often the investors operate with a generic playbook: avoid capital spending, refranchise restaurants and sell off assets. Fear hangs over the decision-making process in most public companies as boards seek to avoid becoming a target”

How Wall Street is hurting restaurants
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November 20, 2018

Franchisee Association - Power Broker of Papa John's

“The damage to the brand image and the franchisees’ businesses has persisted and continues to persist,” adds the attorney. “The Papa John’s system continues to struggle as Mr. Schnatter remains in the press.” (Robert Zarco)

Franchisee Association Positions Itself as Power Broker of Papa John's - Blue MauMau
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November 13, 2018

Working to Reduce Average Check

I spent much of last week talking with reporters, analysts, and 
McDonald's Operators about the problems created for franchisees 
by the never ending discounting in the QSR industry.

Then, over the weekend, I stopped at a McDonald's drive-thru. 
Pulling into the inside lane I was confronted with a back lit display
box mounted six or eight feet in front of the full menu board. The 
message in the sign was essentially the same as this banner to the
right >.

Riddle me this - you've got me in your drive-thru lane, I'm not going anywhere, why are you suggesting I order your cheapest food? 

Wouldn't an Operator prefer I spend a few more bucks on a signature sandwich meal? 

I remember when increasing the average check was a good thing. 
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November 6, 2018

October 25, 2018

Burger King Plays Catch-Up

Three years ago McDonald's began copying the path Burger King had already been
on for several years - financial engineering and refranchising.

Since Wall Street believes the McSpin, Burger King is now copying McDonald's
digital strategy - not because it works - because it impresses investors.

"Burger King Of Tomorrow" or BKOT?

Burger King’s owner plays 'catch-up' on technology
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October 24, 2018

A Discussion on Twitter

This is a super legitimate point. Just about every major QSR chain in the publicly traded universe has unloaded nearly all of their stores on franchisees. And then they discount the hell out of the menu even as labor costs skyrocket.

National Owners Association Has Updated Website

With videos of October meeting and historical McDonald's clips
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October 18, 2018

Discounting Fails Del Taco

"During this past quarter, Del Taco found weakness in its bargain $1 Chicken Quesadilla Snacker, which drove customers into the store but failed to pay off in sales for the brand."

Del Taco Shifts Value Menu Focus
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October 16, 2018

NRN and QSRmag on NOA

McDonald's Operators Move to Form Franchisee Association - NRN

McDonald's Franchisees Band Together - QSRmag
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From One of MCD Corporate Internet Trolls

just let franchisees push the ETOF remodel for their restaurants by 1 year (into 2020) if their restaurant was recently remodeled. Let’s operators get 1 more year out of a location which decor may only be 2 yrs old (& still may be paying off that CAPEX). Great move

October 11, 2018

Best Line of the Day

"One (1) email generated a response from 400 operators to come to the meeting. Operators from all over the country flew through a hurricane to get to Tampa. 
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October 10, 2018

Start Of Something Big?

McDonald’s operators consider a franchisee association
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Attorney Carmen Caruso on Facebook

Today I addressed a meeting of over 300 McDonald’s franchise owners gathered in Tampa, Florida, who are seeking to work with McDonald’s to positively impact the system for the benefit of all franchisees, McDonald’s company, its shareholders, and ultimately the customers.

October 9, 2018

This Is The McDonald's Fred Turner Warned Us About

If you've taken my advice to read John Love's book "McDonald's: Behind The Arches" 
you'll remember the last several pages of the original book focuses on Fred's dream of 
having McDonald's Operators and suppliers own a large chunk of McDonald's stock.

At the 1986 Worldwide Fred told the convention, "I own some of your store, now I want 
you to own some of mine".

The book says this effort was about making the company more entrepreneurial. Maybe 
it was but there's a back story. 

McDonald's was a darling of Wall Street and management was concerned that outside 
investor groups or hostile entities would someday control enough shares to have a major influence on how the company operated. Putting 20/30/40% of the shares in the control
of McDonald's Operators, suppliers, and company employees could prevent that from happening. 

The three-legged stool would be able to protect the company.

Protect it from what? Investors who didn't understand the culture of the system. Greedy investors who wanted to take excessive cash out of the company. Shareholders who didn't understand the need for solid, productive franchisees.

But now, five years after his passing, Fred's fears have been realized. It happened from 
the inside, not by outside robber barons.

The company and the Operators have been stripped mined to return cash to MCD shareholders. The culture has been changed or erased by individuals who don't know 
what made the system successful. Franchisees are considered liabilities not an asset.

The McDonald's board of directors was once peppered with executives from some of the 
major system suppliers. Those folks are gone and the board is made up people with no 
history with, or connection to McDonald's.

Only McDonald's Operators can fix McDonald's because they are the only people left who remember how McDonald's is supposed to work.
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JIB Franchisees Are Revolting

Jack in the Box franchisees want the company to replace its CEO
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September 29, 2018

And We Think the USA Has Too Many Restaurants




McDonald's and Burger King didn't take off in Vietnam - Six minute video

Know-Nothings Hiring Know-Nothings

I'm sure most McDonald's Operators are numb to it but I still find it astounding that McDonald's Corp got rid of so many experienced operations people and is now out on 
the street trying to replace them with people with zero McDonald's experience and  immediately thrusting them into operations positions.

Case in point - the Chicago field office just promoted or hired six new people to be 
"Operations Associates". Two are experienced McDonald's people. The other four are 
from off the street. One from Panera, one from Starbucks, one is a former Firehouse 
Subs franchisee, and one from Berlin Packaging.

Rumor has it that the Denver Field Office is busy hiring Burger King people.

I guess if the decision makers at the top have so little experience with McDonald's they 
don't know the value of a team with deep experience.

Also, the job description for an Operations Associate is "Offer expertise in tools and 
resources for restaurant operations (shift management)".

How long does it take for a person off the street to become an operations resource for McDonald's Operators? A year? Two? Three years?
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