Coalition of Franchisee Associations

March 30, 2019

Funding The Enemy

Now that the Democrat party has gone full-on socialist will McDonald's Operators continue
to  give them 1/3 of their political donations?

OpenSecrets info on McDonald's

March 28, 2019

Minimum Wage - Minimum Thought

I think I've absorbed most of the news on McDonald's Corp's announcement to the 
National Restaurant Association on the minimum wage issue. But none of that news
explains why this change in policy had to be made into such a spectacle.

First, McDonald's relationship with the NRA was not a public issue. I've never seen 
it in the press, never been asked about it by a reporter or an analyst. Never heard a
McDonald's Operator mention it. The bizarre stuff the unions send out or post online 
doesn't mention the issue. If it was a public issue only a few people knew about it.

Secondly, it appears that this could have been handled with a private phone call between
McDonald's Corp. and someone at the restaurant association. Instead, someone at 
corporate made the decision to issue a manifesto and make a public splash.

Thirdly, this hands organized labor a moral victory and they are already asking for more

But there's a reason this was handled so poorly...

The corporate culture at McDonald's has been taken over by employees with liberal 
political leanings. One of the traits of liberals is they think that almost everyone 
agrees with liberals and the small percentage of the population who don't agree with 
liberals are best ignored. 

And being a liberal is a way of life. Their political views can't be separated from their 
personal and business lives. This makes it very difficult to make good decisions.

Which brings us to McDonald's VP Genna Gent, the signatory of the unnecessary letter.
Who is she?

She's been with McDonald's for two years. Before McDonald's she did political work for 
the American Beverage Association and before that she was with the State of Michigan 
for ten years as communications director. For most of those years, she worked for uber-
liberal Governor Jennifer Granholm. 

Anyone familiar with Governor Granholm would know that she's the type of political 
leader who wants everyone around her to share her uber-liberal political views. Just like Robert Gibbs had to share Barrack Obama's views.

Like I said, liberals have trouble making good decisions and this minimum wage debacle 
proves it.

March 25, 2019

McDonald's Acquires Machine-Learning Startup

McDonald's Acquires Machine-Learning Startup Dynamic Yield for $300 Million - WIRED

$300 million here, $300 million there, pretty soon you're talking about real money.

The real question is, how much will McDonald's Corp. let this company charge McDonald's Operators?

The K. boy says the restaurant cost "will be at a discount from market rates". That's completely open-ended, it's unlikely there is any way to determine market rates.  

If it increases sales McDonald's Corp. will get their ROI, they don't need to look at their 
ownership of Dynamic Yield as a McDonald's restaurant profit center.

Restaurants Go On the Political Offensive

New York City Hospitality Alliance pushing back against socialism

March 20, 2019

McDonald's Presents at JPMorgan Conference

On Friday McDonald's.CFO spent 45 minutes with an analyst from J.P. Morgan.

I'll never understand why they send out a bean counter to discuss operations and 
marketing, but the analysts share the same type of education so they take him/her 

About half-way through the discussion the CFO talks about Operator cash flow and 
for the first time McDonald's has admitted that the Operator cash flow numbers they 
give Wall Street are "pre-debt".   

Here's the Seeking Alpha Transcript

March 16, 2019

Poultry in Motion

At the end of February, a memo from the NOA board expressed some frustration with the development of "a better chicken sandwich".

On March 5 a press release appeared on the McDonald's corporate website featuring the "test" 
of "Mighty Chicken" in Augusta GA.

Now, I don't hang out on the McDonald's website very much but I've been there enough to know
that announcing a small market (35 stores) test on a website available all over the globe means 
it's not a "test", it's a done deal.

Local press in the test market? Absolutely. But it's not global news unless all of the decisions 
have been made. I wouldn't be surprised if this product isn't already on the OPNAD calendar.

Otherwise, it wouldn't be on McDonald's global website.

Here's the corporate press release:

Testing Mighty Chicken in Augusta, Georgia - McDonald's Corporation

March 9, 2019

News on McDelivery

A skilled negotiator knows to avoid making an initial offer that might be insulting to 
the other party. Best example - a home buyer making an extreme low-ball offer that is 
so far below the listing price that it insults the seller's judgment and their beloved

That was my reaction to the proposed corporate rent caps on  McDelivery sales. It
will apply to so few stores that it's an insult to the intelligence of the Operator 
community. And there wasn't any real thought put into it. The majority of restaurants 
are still below 20 McDelivery orders a day so they just double that and make 40 orders
the starting point for rent relief?

At least it's a springboard point for discussion. I like the goal of making McDelivery transactions as profitable as drive-thru transactions. A stretch goal but a good one.

And it's also good to hear that OPNAD is holding off advertising McDelivery. Let Taco 
Bell waste their advertising dollars. 

This weekend's WS Journal contains an article about restaurant and grocery delivery. 
It's behind their paywall so you'll need a subscription to their website.

Here's a pull quote: "McDonald’s Corp. started using San Francisco-based Uber Eats
for delivery in January 2017. In a survey that a newly formed association of franchisees conducted of its members in January, 565 respondents said that delivery is not contributing positive net cash flow to the business, while 198 said it is.​"​

Too Many Stock Buybacks? A Debate

"So while franchisors spend billions to make Wall Street happy, they would be wise to 
spend something on the innovation and support necessary to stand out on Main Street."

In the last two years, McDonald's spent more than $16 billion on share repurchases.  

Too many stock buybacks? - Franchise Times - March 2019

March 6, 2019

Funny or Sad?

It's ironic that while environmentalist wackos are trying to shut down tiny things like plastic straws the restaurant industry is developing more and more packaging for delivery and take-out.

Los Angeles bans self-service plastic straw dispensers

Packaging could be the new differentiator in to-go - Slideshow


March 2, 2019

McDonald's and Martin-Brower Under Pressure

America's Trucker Shortage Is About to Hit Consumers Where It Hurts - Fortune

Making McDelivery Famous

Comments here and in other conversations have suggested that McDonald's Operator 
issues with McDelivery should receive media attention.

That job is done. When there's extensive press coverage on an issue or event I usually 
limit the posts here to one or two articles. In this case it was this February 15 post: 

McDonald's Franchisees Dump On McDelivery

This article originated in Advertising Age which is owned by Crain Communications 
which publishes many business magazines in major cities such as Chicago Business
We can be sure the article appeared in most of their magazines and web sites around 
the country.

Nation's Restaurant news and Restaurant Business covered the issue, both in print and 
on-line. CNBC and Fox News did segments on McDelivery. super station WGN conducted
an interview with reporter Jonathan Maze and it's still in podcast form in their website.

I'm sure that's only the tip of the iceberg since I spent a big chunk of February talking 
with reporters and analysts about McDelivery. I think we can assume that all MCD stakeholders know there's a problem with McDelivery.

Now it's up to McDonald's Operators to deal  with the issue internally. 

In my humble opinion McDonald's Corp. will eventually do away with charging rent and service fees on delivery charges and will do so thinking they've solved all the problems 
with McDelivery. It will be up to the Operators to decided if that's enough of a victory.