September 17, 2019

The Plastic Straw Fraud

"Straws account for a nearly immeasurable amount of refuse in the ocean, yet laws are being changed at the whim of a widely shared conspiracy that they pose a significant risk to the planet despite significant evidence to the contrary." 

Why Plastic Straws Are Actually Better For The Planet Than Paper Straws
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September 16, 2019

Fast Times on McDonald's Agency Changes

Why the future of McDonald's marketing looks a lot like Nike's
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Don't Go To McDonald's - Says McDonald's Corp.

McDonald's urges customers to 'stay home' Thursday night:

McDonald's is calling the world's attention to its huge and ever-growing delivery business
this month with a special 'Global McDelivery Night In' on Thursday, an event the mammoth burger-based QSR is pulling off in partnership with Uber Eats...
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September 12, 2019

Seeking Alpha on McDonald's

I don't usually post articles from Seeking Alpha because it's just some one's opinion and the articles are written for money, not necessarily for insight.

But this one is different as the author recognizes the importance of the Owner/Operator in 
the future of the McDonald's business.

It's Not The End Of McDonald's Tug-O-War With U.S. Franchisees
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Uber Continues to be a Cash Burning Machine



California Just Made Uber’s Survival Odds Even Longer - Bloomberg

September 10, 2019

McDonald's Announces Another Tech Aqusition

Inc.com asks, "Is McDonald's in the food business or the tech business?"

We ask - Are these technology companies intended to improve productivity or are
they meant to be a profit center for McDonald's Corp. funded by franchisees?

McDonald's Just Made Another Surprising Move, and It Could Change Some of the Biggest Things About McDonald's - Inc.com

Here's the corporate press release
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August 30, 2019

Crain's on Chicken Sandwich Wars

McDonald's plays catch-up as Chick-fil-A, Popeyes race ahead
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A Consumer Reports

After three Impossible Whoppers at three different Burger Kings, my verdict is in - sellers 
of real meat do not need to be concerned.

It's not a bad product. I finished all three. But it's all bread and condiments. I found no meat
flavor and the patty's relationship to beef is only in appearance, not in taste.

If your intention is to enjoy the sandwich, don't look at the patty. It has a very manufactured look and the broiler marks appear to be painted onto the patty. I suspect they are cooked on
flat grill, not on the broiler.

I only consume a few Whoppers a year but that's enough to be familiar with the distinctive charbroiled flavor of Burger King beef. The Impossible Whopper lacks that taste entirely.

After all the advertising and hype, when Burger King moves on to other products or deals,
the typical Burger King store will sell 10 or 15 a day.

QSR players should ignore fake meat products and focus on the chicken sandwich wars.


August 21, 2019

Blunders in Architecture





The McDonald's brothers and Ray Kroc apparently agreed that it's important to erect a building that would pull drivers off the thoroughfare and into the restaurant parking lot.

While I've never been a fan of the shoe-box McDonald's store architecture I understand that the McDonald's building must evolve. But they don't have to become butt-ugly. The first two pictures above are stores that just completed an MRP. At first glance it looks like the same store but look more closely. One is in the Midwest and one is on the east coast. The third picture is the shoe-box design from a decade ago.

Imagine, you're a parent with kids in the car - would you rather visit the third store pictured for some Food, Folks, and Fun or would you visit the new design that has all the warmth of a Federal Penitentiary.
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Whole Foods CEO on Fake Meat

Whole Foods CEO: Plant-based “meat” not all that good for you
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August 13, 2019

Forbes on Delivery

"The economics of the delivery service on overall profitability is still clouded and will take some time to get a clear picture.  As expected, franchisors are jumping on the delivery service bandwagon whereas franchisees are less enthusiastic. "

The Rush To Offer Food Deliveries Is Leaving Franchisees At The Crossroads
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August 8, 2019

August 5, 2019

It's Not Raining Men

Why is restaurant traffic down? Look to the men
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America's Favorite Quick-Service Restaurants Revealed



McDonald's Operators have expressed concerns about being beat by thirteen competitors 
in the latest Market Force survey.

I say - don't worry about it. It's due to attributes that McDonald's USA can't/won't change.

* McDonald's is the biggest in the industry, and the loudest. Being omnipresent turns 
   people off.

* McDonald's is the oldest. All but the most senior Americans have never known a life 
   without McDonald's. Many of the U.S. competitors are relativity new on the scene. 
   They're more interesting and customers haven't been hearing about them all of their lives.

* Reduced local store marketing means less warm feelings about the local McDonald's. 
   Firing Ronald McDonald didn't help.

* More stores per Operator. Twenty years ago there was a good chance a U.S. consumer 
   knew or knew something about their local McDonald's franchise owner. This helped to            mellow out many people's opinion about such a big company. If an Operator has 
  30 stores they are not going to know very many of their customers. McDonald's is just              a huge corporate entity.

And, as someone has already pointed out, when Americans vote with their dollars, McDonald's blows these other burger competitors into the weeds.

America's Favorite Quick-Service Restaurants Revealed in Latest Market Force Study

QSR Mag covers Market Force survey more extensively
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McEmbarrassment in the United Kingdom

McDonald's hated 'environmentally friendly' straws cannot be recycled – but plastic can – Sun
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July 29, 2019

Goldman Sachs Agrees With NOA

Goldman Sachs warns that Chick-fil-A is taking a bite out of Wendy’s, KFC, Popeyes
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Deep Thoughts

Apparently MCD investors and analysts are comfortable 
with sales increases driven by menu price increases. 
They must assume McDonald's Operators can take 
unending price increases to buoy up the stock price.
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July 28, 2019

Jonathan Maze on McDonald's Second Quarter Results

"Franchisees’ cash flow, meanwhile, has increased for eight straight months. By May, higher cash flow had already eclipsed last year’s decline in cash flow—a decline that prompted operators to form an independent franchisee association.
Ozan said that “more stability in the restaurants” is helping drive labor efficiency, while the higher sales are improving profitability."
Remodels push McDonald’s sales higher
.

McDonald's Q2 2019 Results Transcript

McDonald's Corp Q2 2019 Results - Seeking Alpha
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July 26, 2019

How Much of the 5.7% Sales Increase Was Menu Price?

Management says menu price increases were 1/3 of the increase and their brilliant
initiatives were responsible for the balance. What do McDonald's Operators think?

Higher Prices Drive McDonald’s U.S. Sales Gain as Traffic Lags - Bloomberg
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July 24, 2019

Why Are Delivery Companies So Poorly Run?

These delivery companies seem to be run by people who've never operated a business 
before and who've never seen a restaurant P&L statement.

DoorDash drops policy of keeping tips meant for workers - CBS News
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July 15, 2019

Monday Morning Chuckle

This morning's E-mail included an advertisement from Anchor Packaging who appears to be
an industry leader. Look at all the pretty plastic packaging!

Meanwhile, the environmentalist whackos are hassling the food-to-go industry about plastic straws, cups, lids forks and many other items that provide a pleasant customer experience.
And two little girls in London are getting headlines around the world for starting an on-line
petition to stop the use of plastic Happy Meal toys.

Imagine the headquarters of a major restaurant chain. At one end of the building, in the 
office of "Sustainability" the staff (all pajama boys) are working on changing everything 
about the company's packaging thereby degrading the customer experience.

At the other end of the building, the operations staff is working on the delivery program and are searching for ways to use plastics by the ton to improve the quality of delivered food.

On the top floor the CEO is trying to figure out how to be politically correct and still make
profit in the restaurants. 



Fool Says McDonald's Franchisees Are Wrong

I usually ignore articles from the Motley Fool just because I wouldn't use the word "fool"
when naming my company. But, a friend sent this in and it makes some interesting points.
Please note the writer states that Chick-fil-A is the third largest restaurant chain in the U.S. 
That's by total sales, not locations.

Every time traffic is soft at McDonald's writers and analysts start pumping out articles asking "What's wrong at McDonald's" or "Who will fix McDonald's?" I would ask, maybe doing AUVs just under $3 million a year is the best a 14,000 restaurant chain can do? What would Chick-fil-A be doing if they had 14,000 stores in the marketplace?

McDonald's Franchisees Want War on Chick-fil-A: They're Wrong -- The Motley Fool
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July 2, 2019

Speaking of Former USA Presidents and Fake Food

Mike Roberts was President of McDonald's USA until 2006. After resigning he moved 
forward with his theory that Americans were ready for a "healthier" restaurant menu.

LYFE Kitchen was launched with one store in Palo Alto CA growing to 15 locations 

scattered around the country. The chain went through various ownership structures and Roberts was bought out/forced out somewhere along the way. 

Most of the locations have since closed leaving three LYFE Kitchens operating in Chicago.

The owner says they are doing great but who knows?

Proving once again that the market for "healthier" restaurant food is largely a mirage.


Wikipedia on LYFE Kitchen

Under New Ownership, LYFE Kitchen Lives On - QSR magazine
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June 25, 2019

McSpin At Its Finest

This is amusing. McDonald's media people can pull any number out of their hat and no 
one can prove them right or wrong because they control the information. But, the announcement got huge global headlines and most articles inferred that overall sales at McDonald's are exploding, not just Quarter Pounders. Actually pretty clever (and amusing).

McDonald's Has Sold 40 Million More Quarter-Pound Burgers - QSR mag
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June 24, 2019

The $4.7 Million $$$ Man

Compensation Information for President, McDonald's USA - Salary.com
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What is a Pajama Boy?

A few people have written to ask about the origin of the term "Pajama Boy" 

In 2013 the Obama administration launched a website to encourage millennials to sign up 
for Obamacare. Their website featured a picture of a young man who was apparently the model of the new American male (as defined by liberals). The internet went crazy and 
many modifications to the photo were circulated.

We offer the original pajama boy here but your search will yield some clever changes.



June 14, 2019

Beyond Meat is the Latest Bubble Stock

Beyond Meat is the latest bubble stock — have fun while it lasts - MarketWatch
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Whataburger Has New Majority Owner

This is going to be interesting to watch. At over 800 stores Whataburger is large enough
to get the asset-lite treatment from their new owner.

They have very few franchisees and boast that the chain has been "family owned and operated since 1950". The new owners can begin to recoup their investment by refranchising stores at any pace they choose. 

If they are planning aggressive growth the franchisees will fund that growth.

The chain has a history of erecting funky buildings. Many of those may need remodeling
or replacing.

The dining rooms are festooned with pictures of the chain's past including pictures of the founders. Those will have to go in order to make the chain "modern and progressive".

In other words it will be the same strategy used to reformulate Burger King and to some 
degree McDonald's. Stay tuned.

Whataburger Sells Majority Interest to BDT Capital Partners - QSR magazine
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Price for Former McDonald's HQ Revealed

Purchase Price for Former McDonald's Headquarters Revealed - Oak Brook Patch
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June 10, 2019

Real Burgers vs. Fake Burgers



Click to Enlarge
The third and fourth lines of data are the most interesting. We get less cholesterol with 
the impossible Whopper but pay with more sodium. Everything else is about the same.
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June 4, 2019

Food Militants at Work

I haven't known many vegans but have seen enough to know they are typically fussy 
people who can't stop themselves from criticizing other people's food choices.

Such people won't get invited to my backyard barbecue and QSR Operators shouldn't
want them in their restaurants.

A 5-Year Quest To Put A Plant-Based Burger On The McDonald's Menu
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June 2, 2019

In Case You Missed the Q1 McEarnings Call

"McDonald’s is especially thriving with technology and facility investments. The company announced that it had completed 400 updates in Q1, and planned for 2,000 in 2019 with another 2,000 in 2020 as it nears a complete the Experience of the Future update. CFO Kevin Ozan said it’s starting to move the needle.

“We are now seeing an overall net positive contribution to comp sales from our aggressive modernization efforts,” said Ozan during the Q1 earnings call. “This means that the sales lifts from completed projects now exceed the downtime impact.”

Here's the article from Franchise Times
.

A 5-Year Quest To Put A Plant-Based Burger On The McDonald's Menu

A 5-Year Quest To Put A Plant-Based Burger On The McDonald's Menu

Oak Brook Is Moving Ahead Without McDonald's

$500 million development on McDonald's Plaza site in Oak Brook gets final approval
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May 31, 2019

Pizza Hut works to fix its asset problem

While pizza delivery seems to work it's unknown if delivered burgers and fries will work. 

But, it is interesting that both pizza and hamburger consumers are less and less interested 
in dining in the restaurant. Whatever happened to the idea that every McDonald's could 
be turned into a Starbucks?

Pizza Hut works to fix its asset problem
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May 29, 2019

Beyond Meat's Stock Could Jump 30%

A deal with McDonald's would be a real windfall for Beyond Meat shareholders. I guess
the decision will depend on how deeply McDonald's executives are invested in BYND.

It's been a busy week for Beyond Meat but as far as I can tell no reporter or analyst has
looked into whether a very high food cost product would actually fit on a QSR menu. All
the coverage is about keeping the wacko vegans happy.

Two great ways to waste the OPNAD budget, first, advertise McDelivery. Next, advertise 
fake meat.

Beyond Meat's stock could jump 30% if it partners with McDonald's, analyst says
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May 28, 2019

This Was Not a Test, It Was a Stunt



BK says St. Louis traffic up 18.5%? Easy to do if you give away enough food and do a market-wide coupon blitz.

Impossible Whopper boosted BK’s foot traffic by double digits
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Doing Without Delivery

"But more companies are shifting their focus to profitability, getting bolder in their 
 demands in the process."

Why a big Applebee's franchisee may ditch delivery
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May 20, 2019

More on JACK DT Speed

While franchisees are calling for his ouster CEO Comma sounds pretty smart in this article.

"Comma seemed to suggest that remodeling business for dine-in sales is not efficient, given that the vast majority of customers take their food with them.
“Not only do 70% of our guests come to the drive-thru, but half of the remaining 30% that go into the dining room are takeout customers,” Comma said."
Jack in the Box focuses on speed
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Wasting OPNAD $$$ ?

McDelivery commercial - delivers happy when you're feeling all those other emotions
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May 16, 2019

JACK Not For Sale - Will Improve Service

"The overall objectives of these efforts are to make training and execution easier on our crews, provide faster and more consistent service for our guests and deliver more sales and profits for all operators. By the end of 2021, we’re targeting a one-minute improvement in average service time, while maintaining quality, accuracy and friendliness ratings." - JIB CEO

Sorry bud, you're about 30 years late with that objective.

Jack In The Box takes itself off the market - Restaurant Business 
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BK Parent to Grow Too Fast - Will Fall Down - Go Boom



BK parent company RBI unveils global growth strategy
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May 15, 2019

Fortune on Uber Eats IPO

"One key to Uber Eats success may be the help it gets from its partners, some of the nation’s largest food brands including McDonalds, Subway, and Starbucks, all of 
which boost the number of transactions with smaller, less expensive orders."

Uber Eats Could Help Fuel a Post-IPO Stock Price Rebound

Wouldn't it be interesting to know how many McDonald's corporate employees are shareholders in the Uber Eats IPO?
.

The Simple Life

Simplifying ADB and phasing out Signature Crafted are good moves. It's great to see 
changes that are actually "Operator Driven". 

I have a suggestion to take things a little further - back off on all the "customization".

There was a cultural shift in the McDonald's system someplace in the last decade when McDonald's corporate people convinced themselves that customers wanted menu variety 
over fast service. It seems to have started with slow service times after the introduction
of Made For You.

I've written often that the dumbest thing I've ever heard a McDonald's corporate person 
say was when a PR person was trying to justify the long lines with MFY ... "Guests don't 
mind waiting longer if they know the meal was prepared just for them". Felony stupid.

Here's an example - using the in-store kiosks - the kiosk is constantly asking you if you 
want to "customize" your order. Maybe some of that is unavoidable (McCafe) but it sure 
could be deemphasized.

I'm suggesting Operators go though the McDonald's operating system including kiosks, 
the McDonald's App, McDelivery, etc. and look for anyplace a customer might encouraged
to make changes to their product.

I'm not suggesting that Operators turn off or turn away customers that want to "Have It 
Their Way". They will always be with us. Just don't encourage them to develop bad habits.

And maybe we'll see less goofy YouTube videos of millennial customers screwing around
with the kiosks.
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May 13, 2019

Uber Eats is More Important Than Uber Ride Share

"Uber said in its IPO filing, “a significant amount of our Uber Eats Gross Bookings come from a limited number of restaurant chains.” It needs to make these guys happy."

Uber Eats Needs to Deliver More Than Ever - Bloomberg
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This Vegan Thing is a Lot of Bull


My Sunday paper included a flyer from an organic grocery store (a smaller version of 
Whole Foods) advertising "Beyond Meat" burger patties. Packaged two quarter-pound 
patties (8 oz.) the sale price is $4.49. Yes, that's $9.00 a pound.

Amazon Fresh has the same product but for $5.99 or $12.00 a pound.

Now that's retail and economies of scale will bring that price down but it's going to be
a long time before Beyond Meat or any of their competitors fit into this 2 for $5.00 world.

Vegan items sweep fast food as Chick-fil-A, McDonald's eye options - Business Insider
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May 2, 2019

Great Discussion on our Featured Post >>>>>>>>>

Big New Profit Center For McDonald's Corp?

The eye opening discussion the NOA started last week about Technology Fees charged to McDonald's Operators is important. Many franchise systems are initially built on selling products or services to franchisees (Baskin-Robbins, etc). 

Other than real estate McDonald's has not tried made a lot of money that way.

But, ironically, that's how McDonald's got started. In chapter six of Grinding It Out Ray Kroc writes about his mindset during final negotiations with the McDonald brothers:

"Remember, I was thinking more about prospective Multimixer sales than hamburgers at that point"

Ray's priorities soon changed but selling equipment or products to franchisees might have doomed the McDonald's system.  If McDonald's gets too aggressive about selling technology services to  franchisees  it will forever change the business model.



Being a McDonald's Operator Keeps You Young

Too old to sell Big Macs? And update on the New Jersey lawsuit.

McDonald’s wants to get rid of franchise owner because of age, lawsuit says
.

Uber Losses = $3 to $4 Billion a Year

No problem, McDonald's Operators can make that up.

Uber hints at brutal delivery market 2019 - FranchiseTimes
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