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November 5, 2019

From Today's Wall Street Journal

"The typical McDonald’s restaurant in the U.S. generated about $360,000 in cash flow annually, an executive said in March, down roughly $30,000 from two years earlier. Franchisees have formed an independent association to press their interests.".....
"Mr. Kempczinski said in an interview Sunday that operators are enjoying a record year for cash flow. Average cash flow for franchisees has grown for 11 consecutive months through September, executives said last month."
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11 comments:

Anonymous said...

“We have about 2,000 owner-operators in the U.S. It’s a place where there is always lively debate,” Mr. Kempczinski said.

How many franchisees were there when Chris K became US President? Where'd they go and why? WSJ writer needed to be a bit more curious.

Anonymous said...

If Chris K wants to be successful, he needs to recognize the NOA!!!

Anonymous said...

This post is 100% correct "If Chris K wants to be successful, he needs to recognize the NOA!!"
He loses nothing by doing so and not recognizing and not accepting an invitation to attend only alienates him with franchisees.

Richard Adams said...

What's this obsession with the NOA getting corporate approval or "recognition"?
If you guys want an independent franchisee association then be independent. If the corporate suits want to follow along behind you that's fine but the NOA does not need anyone's recognition.

In fact, using that as a goal could be harmful. It continues the same old carrot and stick relationship that has dominated the system for 20 years (or more).

This week should prove to everyone that corporate leadership is a revolving door and the Owner/Operators are the only stakeholders truly interested in the long term health of the system. Why would NOA need recognition from people who will only be here temporarily?
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Richard Adams said...

"WSJ writer needed to be a bit more curious."

That kind of reporting doesn't happen anymore if it ever did. And if a reporter or editor wanted to dig into a franchisor/franchisee relationship where would they go? Corporate isn't going to cooperate and franchisees don't return phone calls.

Now, if franchisees came out in substantial numbers to work with someone on a story that would be huge but we can't criticize reporters who have no sources for not being curious.
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Anonymous said...

Excellent Point, Richard. If anything let them come to us or to the NOA leadership. They never needed the operators as long as they controlled the operator leadership on various committee's who would rubber stamp their recommendations. Still, many operators will not speak with the media for fear of sure retaliation. Like what we are seeing in our government MCD has a deep state that is mostly anti-operator. You can see it and feel it when around them. Keep them at arms length and focus on running profitable businesses.

Anonymous said...

Exactly Richard. The NOA needs to be independent, and grow some cahoonas. Operators want to work with corporate, but if they have opposite opinions.. operators need the NOA to express them and find common ground. Without losing ground.

Anonymous said...

It is interesting that the Wsj can report on operator cash flow. We run private businesses. Thanks for sharing cash flow numbers... if they are even correct.

It’s a genius move from Corp MCD. Here’s the general summary of what they are saying. “Hi world, here’s how much a McDonald’s franchisee “makes” per store.... it’s a big number. So don’t feel bad for them” all the while not sharing the median cash flow number.. or including the total debt service amount, G&A, or even taking about the ridiculous capex we have. 20K for a non working shake machine for example. Heaven forbid you have to replace a fryer, grill, Hvac unit, parking lot or try to save any money.

I’ll give it to them. Crafty people. Operators, apparently, are the enemy. which is also interesting because perhaps we operators are our own worst enemy. Greed seems to have found its way in our ranks. Perhaps perpetuated by McDonald’s street fighter mentality and impact and favoritism. Many owners will understand what I’m talking about. And if you’re an owner who doesn’t... you are probably part of the problem. That is, sending flowers to a fellow owners funeral while also asking who can buy those stores.... yes this happens and greed perpetuates it.

I’ll say it again. Corp Mcdonalds seems to be light years ahead of us. They have something we want. And are using it against us and for their advantage. I don’t know how to fix this. Maybe with stock options for all owners??

Speaking of stock. It will also be interesting to see if Chris K comes in with enough cash to own stock in McDonald’s. Like most s&p 500 companies he’s required to own a certain amount. Roughly 6 times his salary. Currently, he owns ZERO shares....I can’t fault him. If given free money, I’d cash it in too. Perhaps he got caught in a interesting situation. That he was cashing out to move on and old Steve got caught with his pants down. Then ole Chris K got the call. That’s speculation. Except for the Steve part. But I’m really not sure how you can be US prez and get plucked for ceo with zero ownership in the company. At the end of the day that ownership will come at a price. Our price. Get ready to spend more money and be in debt for the rest of our lives. But if you can, buy the stock bc it will probably go higher. In truth, woe is us.

Anonymous said...

There is a lot to unpack here, all of it important.

1-CHRIS K GAVE OUT OUR PERSONAL FINAICIAL INFORMATION!!!!! and then asks US to sign an NDA?!!?!?
Has he not been aware of the war that SEIU and their little commie factories are waging against us every day (they ironically call Restaurant Opportunity Centers to skirt around the very labor laws they pretend to champion) ? Thanks, Chris. You should get fired for that alone.You gave them a nuclear weapon to launch against the entire franchise industry that MCD always hides behond. Not Chris K just handed the activists a talking pint about how owner operators make X times what their lowest paid employee makes and how we should make less (despite Chris' plans making sure of that all on their own). I

2-NOA absolutely doesn't need "recognition." Richard is spot in. Independence is critical. Corporate already has and will always have rubber stamp franchisee boards. NOA needs to stand apart and be unwavering in protecting owner operators' families' equity. No one else cares. Remember that. That isn't and never will be corporate's job. Just look at #1 above.

3-Please stop begging analysts or reporters to expose the truth behind MCD.They need owner operators to talk to them. They will take the info off the record, and we have NOA to speak for us. It's one of the most important assets that an independent franchisee association possesses-cover for its members. Other franchise owners in other systems speak directly to reporters and analysts without disclosing any trade plans or secrets and push their own agendas forward. I've seen it and know some of these folks. Go hear some of them speak at the trade conferences. Ask for their stories and take from them what you think can help us. I plan to next week in Las Vegas. No one is going to save my business if I'm not willing to steady pitch in, but it has to be more than one. Divide and conquer is Chris K's plan to control us. That's not new and its up to us to make sure that it stops working.

4- This transition is a unique time of opportunity. Let's not waste it. Save your equity and grow it.

Anonymous said...

I registered for the Caolition of Franchisee Associations Legal Symposium and the Retautant Finace Conference that are taking place together on Wed.

Guess what happened? I got emails from several Wall St analysts wanting to talk. Lunch invitations. Dinner invitations EMC.

People like Palmer. Regan. Tarantino. Slabagh etc etc etc. It was automatic just like I read in another thread here said it would be.

Anonymous said...

To get closer to the facts of this matter David Fairhurst (People Person) should be interviewed. RUMOR's are that he buried complaints from multiple women to protect Easterbrook. The boards investigation uncovered this and Fairhurst was fired. Plus, Chris K. was close to Easterbrook and had to know something.