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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29 comments:

Richard Adams said...

The current McDonald's USA executive team will not be able to survive this movement.
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Anonymous said...

Great! Say good bye to “Stock Price Steve”, “Lying Chris K”, “Snake Oil Spero”, “Charlie Cash Flow ain’t Strong”, “Amazon Alvaro” amongst others!!

Anonymous said...

Over 1300 of 1650 US operators in Dallas.

Anonymous said...

I’m here and the feeling is...incredibly enthusiastic. So many Owners love the brand, want to love doing this again. NLC rep, to me looked very weak; almost felt sorry for him. One O/O asked a number of tough questions about his situation, what’s being forced on him. Answer...”that’s not supposed to happen”. Followed by an uncomfortable silence. The O/O, clearly a gentleman and not confrontational guy let it go after an awkward silence. The NLC has been weak and this made the case for an outside advocacy group as well as anything.

McD’s must publicly recognize this association, it is legally required.

It’s a proud day for Owners, it’s a sad time for our system. Shouldn’t have come to this but it has. NOA is the big stick, air cover for elected reps to become true advocates. It’s a big stick that should never have to be used.

Undoubtedly videos from speakers will be released, I urge all O/O’s to watch them, especially legal and financial.

I have had crap pulled on me by the company that is ILLEGAL. I am a good O/O w/good numbers, comparitaves, a great business review. I spoke to 5 O/O’s - EVERY ONE that I spoke with, two I didn’t know until today that have experienced the same. That is over, unfortunately we probably signed our rights to unravel what was done (won’t get more specific here for privacy reasons) but it won’t happen again.

That’s a W. Richard is right, this started at a very specific time, clearly by specific people. The environment they created led to bullying, coercion, shady and even illegal systemwide practices. Wonder if they’ll be held accountable or just fired? Wonder if now is the time for O/O representation on the board?

Anonymous said...

"MCD must publicly recognize this association. It is legally required."

That's not entirely accurate. Franchisor S are required to list the existence of an independent franchisee association in its FDD, but has no obligation whatsoever to "recognize" or even talk to it. Of course, IFA is lobbying on the Franchise Rule so that,may go away if it changes its stance that the Franchise Rule should remain unchanged and toothless.

However, it appears that NOA has successfully rendered whatever MCD management thinks about it irrelevant because the vast majority of owners have joined. NOA, like other franchisee associations before it, had to TAKE the reigns when the franchisor became predatory and endangered their business. About 10 years ago, the Dunkin franchisees had to do it and before and after them the BK franchisees did it, all leading tones management and ,even new ownership.

Anonymous said...

The cash flow/non-stop reinvestment abuse has been going on a long time, but I think it started to come to a head about 10 years ago when McCafe was introduced along with the technology upgrade and forced on the operator system via Don Thompson, et al. The only push back on discounting I remember was the $.49/.59 hamburger/cheeseburger. Does that sound right??

Richard Adams said...

In my mind, the most memorable "pushback" was the fight to remove the Double Cheese from the Dollar Menu. Seems that went on for a year or two.

Anonymous said...

Yes, Richard, but the Double Cheese was on the $ menu for two years before it was nixed. The 49/59 Hamb/Cheese never made it onto the menu board. It scared everyone!

michael webster said...

Richard, this from the Crain's article:

"The second meeting of McDonald's recently established owners association—a franchisee version of a union—has drawn about about three-quarters of the restaurant chain's 1,700 U.S. franchisees, according to people present. "



Do you think that this owners association sees themselves as "—a franchisee version of a union--?

Richard Adams said...

Michael, not in the least. Unless we consider our local chamber of commerce to be a "union".
Those are the Crain's reporter's words, not the franchisee's. From the association's website:

"The National Owners Association (NOA) is an independent, self-funded advocacy group of “owners-serving-owners” on the most crucial issues - Financial, Franchising and Relationship."
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Richard Adams said...

Thanks for the clarification on 49/59.
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michael webster said...

Yes, I thought that Crain's was trying to goad members!

Richard Adams said...

No, I think it is just a misuse of the term. Don't see an ulterior motive. I've had good luck with Crain's over the years. They also own AdAge and many articles appear in both publications.

michael webster said...

Thanks, Richard -- yes AdAge is also very good.

Anonymous said...

Where are the RECENT Operator surveys? What is MCD afraid of?

MAGA

Anonymous said...

IF you have not joined the NOA, WHY NOT??? Its the cheapest insurance policy your could buy!

Anonymous said...

I hope that NOA opens membership to International franchisees too

Anonymous said...

Best meeting I have been to in years. Everyone needs to join NOA very professional, well-organized group of advocacy for the entire McDonald's system.

Anonymous said...

Imagine how the European franchisees feel , with new rents at over 20% and EOTF partnering at much lower rate .Make NOA international .

Anonymous said...

NOA next move is a simple act - pick 4 dates in 2019, one per quarter - predetermined and agreed upon by the members. Work in conjunction with Franchisor as long as there is open and transparent discussions.

When it breaks down, every franchisee store closes that one day. One would hope it would never come to that, but with 90% of stores in franchise hands - the board needs to understand those without McDonald's experience cannot be leading this brand. It is still Ray Kroc's MCD - open discussion with innovation, franchisee partnership has always been a Kroc trademark.

Enough of the threats, let the adults back into the room. Everyone's for a BIGGER, BOLDER and BRIGHTER future. If owners aren't ready to fight, the franchisor will continue with the threats and cease and desist letters to the NOA - and soon its individual members.

Now that owners are learning they have kahonas; it needs to be understood owners have teeth too.

Richard Adams said...

I agree with most of your points except the idea of closing stores. That could be considered a material breach of your franchise and it's a public spectacle you don't need. If you want the attention of the McDonald's board of directors - call them up! They're easy to find.

Rewatch attorney Carmen Caruso's Tampa speech. He cautions franchisee associations, "Do not bash the brand". Dragging your customers into an internal dispute just isn't good for the brand.

Thanks for commenting.
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Anonymous said...

When corporation abandoned Ronald without franchisee input it wasn't considered BASHING THE BRAND.

When the corporation President USA states, this isn't RAY KROCS McDonald's any more... wasn't considered BASHING THE BRAND.

When corporate is sending CEASE AND DESIST letters to franchisees, when operators are being identified as ELIGIBLE FOR GROWTH AND REWRITE, but not a PREFERED OPERATOR for real Growth... that's not bashing the brand either, right? Operators need to read the writing on the wall, and be ready to take the action to save the brand. Just because its CORPORATE, doesn't make them right. Especially today, when so many at corporate have no depth, knowledge or loyalty to the brand.... just a stock price.

Having potential response dates, like closing MEMORIAL DAY, LABOR DAY, THANKSGIVING or CHRISTMAS would be considered BASHING THE BRAND? Id have to say, sometimes you can take the people out of corporate, but you cant take the corporate out of the people.

This is a powder keg, and it was corporate that broke it open. It will be corporate that strikes the match to ignite it. They shouldn't whine when it explodes in their face. Corporate leadership isn't working in a vacuum - and the board has to be aware. They are worried about stock price and dividend today - their commitment for the brand ends with tomorrows trade.


To them, MCD is a gold mine, shareholders will take the gold... leaving franchise owners with the shaft. Why else sell off so many stores to franchisee's? Where's the WIN / WIN in that scenario? We used to call it, "skin in the game". No one wants a battle, but wars are easily lost when one side knows the other is too timid not to strike back.

The fact operators would be willing to list those days as a potential response is a bullet in the arsenal to keep the discussion fair and level. If they ever got used, it would be a proper and minimum retaliatory response to a improper corporate retaliation response.

Otherwise, what are operators gonna achieve or accept. For the new NLC elections will be filled with the same self-serving people pushed by the REGIONS/COOP leadership today. Same intimidation tactics, nothing changes. Back to being left without a seat (voice) at the table and another expense on the restaurants for a ineffective membership.


The only other real response happens in 2020, when the operators tear up their OPNAD membership renewals - forcing the NOA to being the primarily representative of the franchisee. Until then, pointing a finger and going BANG, BANG - will not slow the corporate hammer (AX) from falling. Its coming, being prepared isn't a fault - its a necessity.

Otherwise. common sense would be for the NLC to dissolve immediately and new Corporate leadership at the US level. Sensible people (for the brand) would of resigned, they hadn't - they are entrenching for a battle. Franchisees didn't ask for this fight, but they better understand the ART OF WAR quickly. For by all accounts, corporate is planning to wage a very heavy-handed prolonged legal war. They been positioning themselves with the consolidation of operators to stupid to fight them for quite some time now.

The CEASE and DESIST is understanding... its a declaration.

Richard Adams said...

OPNAD should certainly part of the answer. As structured under 2020 it gives corporate far too much control. OPNAD dates back to 1966. Is it still relevant?
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Anonymous said...

I absolutely love the post above. Well said. One problem, operators have debt. it's a four letter word and the ultimate motivator. MCD knows that and that's part of the intimidation equation. I'm not sure how to get out of that part, especially when there's not an open market to sell restaurants to. some folks are stuck. at least until 7 years pass by. Or, depending how upset with the business you are, you can break even and just walk away.

Anonymous said...

Share Price Steve and Lying Chris K are NOT owners of this company....they are EMPLOYEES of it and need to know the difference!!!

Richard Adams said...

The company is owned jointly by the Operators and the shareholders. The corporate guys are just punching a time clock. This is why the Operators should be communicating with the shareholders.
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Anonymous said...

Closing stores bashes the brand in the public consumer eye? Chick-Fil-A closes all of its stores every Sunday, even one in an NFL stadium. The public seems to like that brand just fine. They understand when businesses have principals, especially when a local owner is being threatened by a giant international conglomerate that just got a giant tax break that they didn't get.

Anonymous said...

Closing the Restaurant is a Material Breach. However there are 2 other possibilities with in our control that are not.

1). Following Strict Hours of operation that are in the Franchise Documents. 7am to 11pm.
2). Turning Off the UberEats IPad for 1 day.

If you wanted a little civil disobedience this would be the way.

Anonymous said...

MCD permanently closed stores where MCD was operating them when the cash flow was insufficient, by the hundreds each of the last few years. Closing for an hour or two each day when cash flow is insufficient can be said not to be material breach because you are following MCD's own course of conduct despite what the onerous franchise agreement says.

The tides are turning in a few court decisions where franchisor conduct is considered by judges. That never used to happen. Now judges are becoming more educated about franchising.