March 30, 2020

Yum! CEO Donates Salary to Employees

He's Been With the restaurant company for thirty years - QSR magazine

Really ???

Replying to
All day breakfast’s response to this news: “I’ll be back.”
7:21 PM · Mar 25, 2020Twitter for iPhone

Attorney Carmen Caruso's Comment on Linkedin

Carmen D. Caruso

Trial & Appellate Lawyer
6 days ago

Be careful, Franchisees, before accepting temporary financial relief from your Franchisor during the national pandemic crisis.  News that major franchisors are willing to grant rent and royalty relief to distressed franchisees is welcome, but no franchisee should be asked to sign a General Release that would absolve the franchisor of possible liability for other claims that might have arisen before the coronavirus struck.  Any franchisee being asked to sign a General Release should always consult their attorney first.  That golden advice applies now. 

#franchisees # #franchisor #restaurants #IFA

March 24, 2020

Business Interruptus

Don't give up on your insurance coverage. There's still a lot of discussion about business
interruption. While we're not expressing an opinion, here are some arguments:

This article includes comments from attorney Robert Zarco -

Restaurants get no relief from business interruption insurance

This one really digs in on both sides - 

Coverage may hinge on science - Law360

As Zarco says, don't rely on the declarations of your insurance companies or their attorneys. 
I say, don't rely on the advice of your franchisor since they are often in bed with the "approved" insurance companies.

Fox News interviews two celebrity chefs -

Wolfgang Puck and Thomas Keller

March 22, 2020

File Under: Just My Opinion

The previous anonymous comment is terrific but I want to disagree on one point. Getting OPNAD and the Co-Ops to reduce fees by any percentage would take months of conflict 
and negotiations. Time you just don't have.

Trying to advertise or discount your way out of this disaster is like shouting into the wind 
to stop a hurricane. 

These are voluntary advertising programs and go far beyond your franchise obligations. I'm not talking about banking your contributions to be spent later but stopping your voluntary contributions altogether,  NOW. 

Advertising and discounting in this environment is a complete waste of the cash you need 
to survive.

Anonymous - "Don't Pay Your Rent"

I am the Anonymous that laid out my plan what McD. should do. I still stand behind my recommendations, with one big exception. I have truly under estimated the sales effect of this Crisis, my new estimate is at least 45% down for the whole nation. From March 15th to ?????

It is time for each Owner to get serious about making cuts in Outside Services, Utilities and Postponing anything that takes cash out of your pocket. Everything we thought we needed is now a Luxury. If you have been around a long time you know what to do, if you have been around a short time call an old timer talk to them, let them coach you. McD. will not be of help, most have never had to do this.

A “Best Bet” once you get past the current Liquidity Issue, if you have interest paying Cashless Accounts let the Deferrals pileup there. At the very least it will pay for the annual cost of the accounts.

I am making a spread sheet on the things that are rolled back, I do not want to under estimate what I owe when that time comes for the BALLOON payments, by thinking the pile in my Accounts will be enough. You HAVE to KNOW.

Additionally, It is time for OpNad and CoOp to reduce our fees by at least 65%. We will need that money to put back in our towns when the time comes. We need it NOW to stay afloat.

I would love to hear other ”Best Bets” during this “Slash For Cash” time.

Good Luck to everyone. Stay Positive and Stay Safe.

March 21, 2020

Most Press Says MCD Giving Franchisees a $$$ Break

But the corporate press release says: "We are working with franchisees around the world in order to promote financial liquidity (e.g. rent deferrals) during this period of uncertainty."

March 19, 2020

Landlord: Don't Pay Your Rent - Pay Your Employees

Restaurant owners appreciate landlord’s advice to ‘pay employees’ instead of rent

Anonymous Has Left a New Comment on Our "Subway" Post

The deferrals will only stay the DEATH sentence for a little while. Because everything that we pay will go up after this is over. Like Bank Fees, Unemployment Insurance and all the things other companies will try to recover.

We are going to need a Rollback of the following fees to stay afloat; for at least 2 months make the following changes Cut Rent by Half, All Service Fees, OpNad by Half and CoOp by 30%. This will give the average Traditional store 40k to weather the storm. I have spent Millions on remodels and I am tapped out.
Now is the Time for McDonald’s to Show the Operators they care about our true Financial Health. They can suspend the Dividend for 1 Qtr and make this happen.
I am Projecting the USA will be Down 23% from March 15 to May 31, when all the smoke clears.
Ok, NOA and NFLA time to earn your keep. I want to hear directly from you what you are doing. Time to stop working on STUFF that does not matter we are going to hurt real BAD. The sky is not Falling yet, but we need REAL help.

QSR & Coronavirus

Where Fast Food Fits in the Coronavirus Crisis - QSR magazine

Subway Franchisees to Get Fee Relief

Subway franchisees to get fee relief amid coronavirus pandemic

March 10, 2020

One Word Benjamin, Plastics

I sit on the board of directors of a home owners association. Last week we had to adjust 
our schedule to meet during what most people call "Dinnertime". To avoid rumbling 
stomachs we ordered dinner in. Red Robin won the coin toss. We ordered a dozen of 
their upscale burgers each with a side. The food arrived hot, fresh, and on time since 
the Red Robin was only two miles a way.

After the meeting we passed a trash bag and it was stunning how much plastic was involved
in our meal. The divided plates, clear plastic domes, plastic delivery bags, etc. all filled a medium-large trash bag.

I submit it's a snapshot of the restaurant industry. While chain managements are more 
and more obsessed with delivery the amount of waste generated is pretty much hidden 
from the judgmental public.

So, while chains are pissing off customers with poor quality mushy straws, inferior packaging, and recycling efforts in the front of the house ... in the back of the house the delivery teams are increasing the use of landfill bound materials and the like.

It could be that the overall volume of restaurant trash is increasing vs. being reduced. And yet the guests who visit the restaurants are going to suffer with inferior straws, utensils, and packaging.

All to be politically correct.

March 6, 2020

McDonald’s Cancels WWC

They really had no choice. WalMart announced yesterday they are restricting travel and canceling events, SXSW was canceled, etc. If McDonald's had gone ahead with WWC2020 
the public would have seen it as uncaring and irresponsible.

McDonald’s cancels its worldwide convention over coronavirus

Don't miss some great comments on this topic at:

February 25, 2020

Franchisees Dodging Bullets

In January the Department of Labor defined "Joint Employer" and now the NLRB has set 
out a rule that franchisees are not joint employers. This should protect franchisors from excessive litigation and make it difficult, if not impossible, to unionize franchised businesses.

NLRB Issues New Joint Employer Rule Requiring Direct Control

February 21, 2020

Mayor Pete Attacks McDonald's

Buttigieg said in a statement on Friday, "It’s critical that we support workers who are
coming together to fight for a union, fair wages and benefits, and an end to harassment 
and discrimination.”

How much will the McDonald's PAC send to Mayor Pete?

Buttigieg to join striking McDonald's workers next week

An Owner/Operator as MCD Director?

Occasionally an anonymous website visitor submits a comment about having a McDonald's Owner/Operator on the McDonald's Corporation Board of Directors.

At least one commentor recently stated that would be a waste of time. I agree completely, 
it would be a waste of time, effort, and resources.

First, there's no mechanism to make it happen. Just because someone signs a McDonald's franchise agreement doesn't give them the right to help run McDonald's Corporation.

But most importantly, directors of a corporation are "insiders" who cannot discuss the board's business at anytime. When have we ever seen a board member of a public company discuss the company's plans under consideration? I'm sure the answer is never. We might see a carefully prepared public statement by the chairperson or CEO but not from a run-of-the-mill director.

You might have seen public statements by activist investors but those people are not directors, just big shareholders such as Bill Ackman was at one time.

Here's a hypothetical: It's year 202X and there's a McDonald's Owner/Operator on the McDonald's board of directors. Corporate earnings are in a slump and the board is discussing ways to increase revenues. One of the proposals is to raise the "service fee" charged to franchisees by a full one percent. 

Can said Owner/Operator leave the meeting and launch a campaign among their fellow Owner/Operators to discourage the board from making such a move? Nope, they can't discuss it with anyone. And if the change moves forward their one vote wouldn't stop it.

And there are many other governance issues that would cause this one director seat to be ineffectual. After signing a stack of NDAs and other agreements this Owner/Operator would be completely neutered.

There are many ways Owner/Operators can influence the direction of McDonald's Corp.  Spending years fighting a losing battle to force a franchisee onto the McDonald's board of directors is not one of them.

February 19, 2020

Subway's Struggles

"Subway is planning to offer a buy one, get one offer for its footlong subs starting next 
month. Customers who order a sub online or through the chain’s mobile app can get 
another one for free.
Yet franchisees, who operate all of Subway’s nearly 24,000 U.S. restaurants, have 
pushed back against the offer."
Subway works to rebuild its business - Restaurant Business

February 15, 2020

This is What We've Been Saying About Fake Meat

This analyst is looking at nothing but Beyond Meat and is not considering any impact
on McDonald's sales or profits. They estimate McDonald's could sell 45-55 fake meat 
patties a day. I'm sure that's possible after OPNAD spends millions of Owner/Operator
$$$ advertising the product but then it will drop back to 10-20 a day.

But Beyond Meat shareholders will benift greatly. Just how many of those shareholders
work for McDonald's Corp. is the question.

Beyond Meat Rises as Bernstein Gets Bullish on McDonald’s Potential

February 10, 2020

Words Mean Things

Looking back on the January McDonald's conference call with analysts it seems we didn't adequately discuss the CEO's comment that McDonald's Owner/Operators are "Wealthy".

That was an extremely poor choice of words.

In a publicly held franchise company there is always a tug of war between shareholders and franchisees. Shareholders know that franchisees have to be solvent. But, if shareholders perceive the franchisees are making too much money they'll want to move and in and get 
their share. 

There are many ways to describe the financial status of franchisees - "in good shape", 
"solid", "successful", "prosperous", "comfortable", "aligned" etc.

But the word "wealthy" is in an entirely different category. The word denotes a level of opulence that needs to be taken down a notch.

And I'm not just spitting verbal hairs. For example, McDonald's management has to justify their capex expenditures to shareholders. A certain amount of that capex goes to partner 
with Owner/Operators on remodeling. If investors get the impression that franchisees are 
too "wealthy" there will be questions about why part of the capex budget has to go franchisees and not to shareholders. That's just one example.

A management team that understands franchising would not make this mistake. But that's 
not the case at this point in McDonald's history. It might be the fault of the McSpin department that writes the CEO's script but a knowledgeable CEO would have changed it 
in editing.

McDonald's Owner/Operators should resist being labeled "wealthy" or any other over-statement, it could cost you a chuck of your net worth.

January 31, 2020

McDonald's Franchisees Are "Wealthy"

“It’s a really good thing when you have wealthy franchisees who are making a lot of money,”  MCD CEO said. “It means their mentality is to be aggressive to invest in the business.”

McDonald’s perplexing traffic problem - Restaurant Business

January 30, 2020

Huge Numbers

$100 Billion in sales and an enterprise value of over $200 billion? Pretty
soon you're talking about real money.

McDonald's Becomes a $100 Billion Company - QSR magazine

January 16, 2020

Impossible Food Costs

Based on supermarket prices Impossible Foods must be giving BK a huge break on
back-door prices. 

Burger King does plant-based value - QSRweb

January 11, 2020

Could Beyond Meat Be a Millionaire Maker Stock?

Call it a conspiracy theory but it would be interesting to know the level at which current 
and former McDonald's Corp. executives are invested in Beyond Meat. 

Though he didn't last very long it's my understanding that Don Thompson was liked and trusted by his corporate cronies. It would have been easy for him to reach back into McDonald's and sell this group of wealthy executives a substantial number of BYND shares, either before the BYND IPO or after. 

It's easy pickings. McDonald's has the authority to approve the vendor for fake meat. McDonald's executives have the power to decide on the scope of the menu and the 
influence to force McDonald's Owner/Operators to spend their advertising money on 
fake meat. 

The McDonald's advertising of fake meat may not sell a lot of sandwiches but it will pump the price of BYND shares. McDonald's execs cash out at the peak and Owner/Operators
and DCs are left with coolers full of Beyond Meat inventory.

Sweet, plus it's modern and progressive.

Will McDonald's Owner/Opertors Make BYND Shareholders Rich? - Motley Fool

January 7, 2020

McDonald’s CEO is Going to Change the World

"McDonald’s can change the world in a way that no other company can" - NRN

The new McDonald's system anthem:
(Tune: I'd like to buy the world a Coke)

I'd like to build the world a home
And furnish it with love
Grow apple trees and honey bees
And snow white turtle doves
I'd like to teach the world to sing
In perfect harmony
I'd like to hold it in my arms
And keep it company
I'd like to see the world for once
All standing hand in hand
And hear them echo through the hills
For peace through out the land
(That's the song I hear)
I'd like to teach the world to sing
In perfect harmony
I'd like to teach the world to sing
In perfect harmony
I'd like to build the world a home
And furnish it with love
Grow apple trees and honey bees
And snow white turtle doves
I'd like to teach the world to sing
In perfect harmony
I'd like to hold it in my arms
And keep it company