May 2, 2019

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.



2 comments:

Anonymous said...

Next step in this disastrous chain-MCD will soon be SELLING us services from Dynamic Yield

Richard Adams said...

Oh, that's a given. They've got to get their $300 million back somehow.

Another question is - will they be selling services to McDonald's competition?
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