Coalition of Franchisee Associations

July 3, 2019

Higher Wages = Inflation

"McDonald’s Corp. long-time distributor Martin-Brower Co. is raising delivery fees, imperiling low menu prices."


Anonymous said...

What low menu prices? When corporation has fixed prices locking out the EVM to a point the system had to abandon the longest lived value strategy McDonald's ever known - switching to COMBO PRICING.

Suppliers that milk the operator of ever rising cost. Mismanagement of construction and other projects fleecing the operator - with added investments with little to zero Return of Investment (ROI). Magnanimous technology cost nearly $23,000 ANNUALLY per location - while service declines as services are shifted overseas to "control THEIR cost".

Averaging 23 discounts on a mobile APP daily, multiple FREE or BOGO events weekly. Rising a stock value to where the average investor can no longer invest in a brand that once called the average person their customer.

When was the last time you heard a valued NSLC discussion over commodity pricing? Why is it when SUPPLIER cost increases, that gets passed to the restaurant. But when the restaurant cost increases - operators have to discount price or offer promotional events to lessen cashflow? My local McDonald's discounts a $1.00 Drink, when the closest QSR competitor drink price is 229% higher than its SMALL and 389% higher than its large.

The restaurant sells a $2.00 12oz McCafe to market to a customer walking into a SUPERMARKET can purchase a 13oz McCafe in the refrigerated section for $2.99. Where do the profits from those sales go too?

Oh, there quick to say a franchise is responsible for their own pricing. While they force anyone who deviates from their plans out of the system. Cashing out and then bailing out - there is no one in the corporation betting for the long game. Even the minions who feel they will advance by stepping on others are getting driven out in droves. Zero investment in the brand.

They are fleecing the gold from this mine until one day McDonald's operators will awaken to find all that's left is the SHAFT. The NOA was the last bastion of hope and even that is slowly slipping AWAY!

Anonymous said...

Previous post was right on

Like he said “where did the combos go”? The MCD person responsible for that 40 years ago JIM RAND - now that’s been gone
for years

Remember in the 60’s


FRYS 15 cents MINE NOW small 1.70 med 2.70. FOR FRIES - I have no choice

SHAKES 20 cents MINE NOW 2.00 because of the 2.00 menu

we are out of wack on pricing

What sit down restaurant charges twice as much for a baked potato then a steak

RICHARD what are your thoughts?

I would text about wages BUT I better have a few drinks first

What did leadership do to our GREAT brand?

CHICK FA LE - IN & OUT - even CULVERS are kicking at butts - none of them have dollar drinks- AGAIN 1.00 DRINK
mentioned above

I would like to retire but cannot because I just did 4 MRP’s with an average cost of 550,000 - 1 more note on this
3.00% sales increase guest count flat

See you in DALLAS


Anonymous said...

The above comments reinforce why it is IMPERATIVE THAT YOU JOIN and SUPPORT the NOA. Lack of operator unity is why McD can so easily force things down our throats without regard to our profitability. This is why McD stock has reached all time highs- Making Stock Price Steve and Clueless Chris K into mega multi millionaires and BANKRUPTING many Operators (or destroying their equity). And don't get me started on the NFLA - they have already gone wobbly and caved in on multiple issues.
RETIREMENT ? Whats that?

Save your business- JOIN THE NOA


Anonymous said...

Its why the push on RFM, Digital menus, and a National pricing strategy is so important. When they control your menu, your prices and now the marketing - they are quickly realizing the reality of why do we have operators.

The Board of Director is quickly forgetting why 90%+ restaurants are run by franchisee's - as corporate couldn't run operationally sound restaurants. Taking control of a menu board and pricing doesn't substitute operations on the ground - where corporate has always FAILED.

Its a vicious cycle that corporations go thru, as most lack strong leadership skills. Skill #1: surround yourself with competent leaders. #2: know when to leave them alone to produce results.

Our leadership today is sinking most competent franchisees in the system - substituting age for experience. This allows them to abolish Rule 2, as they begin to think the boardroom is a fine substitute for operations on the ground.

Question is - will franchisees ever wise up in time? Can the system recover from such a corporate hostile takeover? Just like Corporation had to reach out to the BENCH to get past leadership to return and help restore the brand - will they find themselves in a place to reaching out to those operators they once stepped on to bring the operations back into the brand?

Anonymous said...

The game plan is pretty obvious. 1-MCD takes central control of marketing, menus, pricing, tech, delivery, the app etc. 2-MCD forces operators to expunge lots and lots of cash reserves on MRPs, tech "upgrades", useless and misguided equipment and other programs, 3-MCD forced operators to create the McCafe brand and hijacks McCafe to monetize it by competing against its own operators in grocery and drive traffic out of the restaurants because they keep 100% of that revenue, not just the fees and rent produced by any McCafe sale (anemic, BTW) in restaurants.Why do you think we can't sell it for more than $1 or $2 for a latte when our competitors get multiples of that? Because MCD wants it that way.

This leaves operators in a highly weakend state with severely reduced cash reserves and cash flow. Operators are now glorified employees with the owner part of the title rendered a joke.

But, you say, MCD NEEDS real operators. That's true, but they don't have to be us. MCD can just take the restaurants for free, they already own the real estate and buildings. They can operate them for a short period with that great centralized control until they recruit excellent operators from other franchise systems to replace us. If these other franchise owners buy the newly remodeled stores cheap, and they will need to to be induced, they chug right along on money that we spent on those huge remodels.

Those people are out there, operating hundreds of units of other brands with their own infrastructure, all being wooed by multiple brands to join their teams. They are cash rich and sought after operators who will strike favorable deals to buy up blocks of restaurants They areVERY easy to find and you see their pictures and names in all the trade publications. MCD sees them as shiny new toys who aren't "legacy" operators that are irritants to MCD management. Their demands will be low due to the low purchase price and resulting good cash flow and they can fold our restaurants right into their own systems, lessening the G&A that MCD needs to spend policing them.

MCD keeps the fee and rent streams going with zero interruption.

Oh, by the way, the public won't care what happens to us. They see only the Golden Arches, not who is toiling under them. We have done such an excellent job of standardizing the MCExperience that it will be seamless. Even if anyone did figure out what happened, we are looked at as old rich white men who abused their employees. We already had targets painted on us by SEIU and other unions while MCD management allowed it.

Join NOA and fight. Learn from other systems that faced this and won. It's coming. It's an old franchise playbook which finaicial engineering franchisors have learned by heart.

Anonymous said...

Higher wages=Higher prices=Higher fees+higher rents=Less franchisees