Coalition of Franchisee Associations

May 31, 2018

May 29, 2018

Starbucks - Land of Confusion

Schultz makes emotional decisions instead of business decisions. This incident could
have been handled quickly and internally. Instead he creates an international spectacle 
that implies that every Starbucks employee is ignorant and insensitive.

This will not yield a positive result.

Howard Schultz public statement

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

Jonathan Maze on "Value"

Maze is the best financial writer covering restaurants. His work is always worthwhile.

Why refranchising and value don’t mix

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