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December 30, 2020

Does This Sound Familiar?

Maybe this "artist" can be the next McDonald's promotional partner!

"Nathan Brand, a spokesman from the National Republican Senatorial Committee, retweeted the screenshot and wrote, "This is who Georgia Democrats Raphael Warnock and Jon Ossoff had headline their event today. Will they denounce this disgusting individual?"

Hip-hop artist who headlined Ossoff, Warnock event stirs controversy after screenshot emerges: report - Fox News
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December 10, 2020

Elon Musk Decries ‘M.B.A.-ization’ of America

Peter Thiel, the venture capitalist who started PayPal Holdings Inc. with Mr. Musk and others two decades ago, once said: “Never ever hire an M.B.A.; they will ruin your company.”

Elon Musk Decries ‘M.B.A.-ization’ of America - WSJ

(Subscription required)

December 7, 2020

NRN on McTurmoil

McDonald’s tells franchisees to expect new fee charges in 2021
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Barron's on MCD

“We believe this move by McDonald’s is being received overwhelmingly negatively by franchisees,” analyst James Rutherford wrote.

It's obvious that the person who wrote this headline did not read the article they were posting.

McDonald’s Has Handled the Pandemic Well. Its Stock Shows It. | Barron's
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Education Vs. Experience

Many have commented about the education and experience levels of the new McDonald's corporate management team. This simple schematic explains the difference.


Anonymous Comment

"What's clear, the operators no longer have the true faith and trust of the existing McDonald's leadership and Board of Directors, to honestly, openly, and most important compliantly engage with the franchisees and their signed franchise agreements. This includes the obvious ineffective NFLA and OPNAD, which were conveniently thrown under the bus on the current ongoing McDonald's conference call.

It is evident, the driver in McDonald's Corporation today is the current stock drivers. Not building, maintaining, and nurturing the long-term relationship that built the Golden Arches into a worldwide powerhouse brand. Today, this powerhouse is being steered with leaders that little to no history, bear minimum investment, and having absolutely no skin in the operational gain.

McDonald's has lost ZERO in this national COVID crisis. Operators have taken the brunt of added cost in trying to keep stores open; with plexiglass, sanitizing equipment, and other needs to address BOTH McDonald's and Government COVID-19 concerns. They have done this many times with only 50% of a facility; even when the government allowed 100% of the dining room is open. However, operators paid FULL RENT. They also paid full service fees, when most of McDonald's Corp sat at home, on the beach, or offsite - sending dictates to the restaurants. A $5000 per restaurant technology fee is a drop in the corporate bucket they drenched operators with during this pandemic. The $5000 is a fraction of Operator cost owners paid to keep their businesses open during this pandemic. Where's the partnership? There was none, and the rent and service deferments were a joke (if not in some states illegal) - so I won't even acknowledge them.

Restaurants are buckling down for ANOTHER round of lobby or restaurant closures, lost service areas, and other obstructions - where's our "partners" head in these matters? Sending FOOD SAFETY inspections warning that these will commence in full force on January 1, 2020. Guess it's their way of saying we know your down - here, here's a kick in the teeth while you're there. And we will zap you with these other financial struggles.

Questions will only make it easy to identify the weakly positioned operators. Be leery my friends, there are those in the bushes wanting to reduce the operator number."
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December 4, 2020

Latest Editorial From Anonymous Owner/Operator

Great read, heartfelt and timely. Grab a cup of coffee, it's a long one.

Find it HERE

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Jonathan Maze Reports

McDonald’s franchisees ‘blindsided’ by new charges for 2021
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Bloomberg Reports

 McDonald's Plans Changes to Some Franchisee Fees, Subsidies

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Our Future "Investments"?

McDonald's Owner/Operators should expect more announcements like those in the December 3 letter from U.S. "Leadership". McDonald's management has to convince investors that this is a growth company. Sales, corporate income, share price, dividends must constantly increase, year over year. Since they can't expand the number of stores the growth in corporate income has to come from somewhere. From here forward it's your turn.

That's why the CEO is eager to see the federal minimum wage go to $15.00.

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November 29, 2020

Can't Fake Meat

McDonald's November news has been dominated by the announcement of "McPlant",  the latest fake-meat venture.

For me, this is a bit of deja-vu. There are similarities to the introduction and roll-out of McCafe in 2008/2009.

First, McCafe was sold to Wall Street long before the actual "testing" even began. The test was not a test but a publicity stunt. The outcome of the McCafe test was predetermined.

Secondly, McCafe was sold as a "Starbucks Killer" and the world outside of McDonald's assumed that McDonald's could duplicate Starbucks drinks and sell them for one-half the price. Today the publicity generated by the fake-meat manufacturers and chains already selling fake products has convinced the mainstream press and some in the QSR industry that the world is clamoring for fake-meat.

The chain that's gotten the most buzz is Burger King with the Impossible Whopper. In truth, Burger King is doing very poorly and domestic same-store sales are flat or down while other major burger chains are trending up nicely. It would be impossible to make the case that the Impossible Whopper is doing anything for Burger King. 

Nonetheless, reporter after reporter is writing that McDonald's is "behind" Burger King in serving fake-meat.

Outside of the Owner/Operator capital investment, the biggest risk in venturing into a new product category is the waste of precious advertising dollars. McDonald's management assumes the power of OPNAD can sell anything. So does Wall Street. McCafe proved that to be wrong - OPNAD spent millions and sales went down.

Most McDonald's Owner/Operators are eager to upgrade their chicken lineup next year. I've never heard from an Owner/Operator who wants to invest in or serve fake meat products.

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November 19, 2020

Scores of Stores on the Block

Now that big restaurant companies no longer want to be in the restaurant business 
it's harder and harder to sell large groups of franchised restaurants.

Wendy’s makes a bid for bankrupt NPC International’s restaurants

November 13, 2020

New CEO Single-Handedly Saves McDonald's

Maybe it's because their ancestors were ruled by kings and queens but European journalists generally treat big company CEOs like royalty. They love publishing glowing articles, even 
about mediocre executives.

When the U.K.'s Steve Easterbrook was promoted to CEO of McDonald's it was bigger news 
than the D-Day landing at Normandy.

Schumpeter - Takeaways from McDonald’s remarkable comeback -| The Economist

November 9, 2020

The McDonald's System Invented Diversity

McDonald's veterans are universally proud of the system's track record on diversity and inclusion dating back to the 1960s. So most of these "McVets" are disappointed to see 
headlines and news articles such as the one below.

I don't have any internal insight but from 30,000 feet it's apparent that the new McDonald's 
CEO is attempting to make the case that he was handed a company rife with racism and he intends to bring in people who will fix the problem. He alone will valiantly expunge the Klansmen from McDonald's.

But any examination of the current problems will show that the complaints are about events 
that occurred during the Easterbrook/Chris K. regime.

Downsizing a company is a messy business and if not done properly it leaves a trail of angry 
and disappointed people. That's the work product of the past five years.

Steve Easterbrook couldn't have understood the culture of diversity in McDonald's USA 
because he spent his McDonald's career in Europe. Chris K. couldn't understand the culture 
of diversity in McDonald's USA because his business "knowledge" comes from sitting in the classrooms of liberal colleges. Then he rode around in corporate limousines for a few years 
before becoming President of McDonald's USA.

Not knowing what they didn't know management steamrolled ahead thinking they were making McDonald's Modern and Progressive.

As usual, in a franchise system, everything rolls downhill. McDonald's Owner/Operators can expect that they will be lectured and talked down to about these issues. And, ultimately, McDonald's Owner/Operators will be blamed for the problems. 

It's nice that these new folks have these good jobs but they will soon learn that the root of the problems they were brought on to address is the person who hired them.


October 29, 2020

Red Chains, Blue Chains

"Only five of the 10 CEOs on Eater’s list openly donated to political causes — mostly via 
their company PACs. Just one CEO, Chris Kempczinski of McDonald’s, donated exclusively
to Democrats, giving $2,500 to Joe Kennedy’s Massachusetts campaign for U.S. Senate. 

Most of the other donations went to Republican candidates and PACs."

Which Politicians Are America’s Largest Fast-Food Chains Donating To?
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October 25, 2020

Felony Dumb

In 2014 Bloomberg published an article titled "Burger King is Run by Children" because 
BK CEO Daniel Schwartz was only 36 years old and most of his management team was
even younger. It appears that in the six years since nobody at Burger King has grown up.

Who could think that QSR customers are interested in hassling with paying a deposit on 
cups and packaging and then bringing it back to recover their deposit. 

In addition, the world's population will emerge from the pandemic as more "germaphobic". 
Products and processes we found acceptable in 2019 will be unacceptable in 2021. That 
includes cups and packaging that were supposedly sanitized enough for repeated reuse.

Can Burger King's reusable packaging change fast food forever? - MarketWatch

And yet McDonald's Corp. is monkeying around in the same arena.

October 16, 2020

Our Flux Capacitor Takes Us to the Future

At the end of this article the National Restaurant Association lists a few of the impacts 
ithe election follows the polls as they stand today.

If the election goes wrong, at the end of 2021, the United States will look more and more like California. By 2024 the United States could look more and more like Venezuela.

Restaurants, Down $200 Billion Already, Prepare for Election Fallout - QSR magazine

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There's One For You, Nineteen For Me

"IRS issued a ruling that business expenses paid with forgiven PPP funds could not be written off as normal tax deductions."

Restaurants with forgiven PPP loans could face a tax wallop
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October 9, 2020

Joe Erlinger Buys Chicago Lakeshore Mansion

McDonald's exec Joe Erlinger buys $2.42 million mansion - ChiTrib
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Prepare For the Return of ADB

On November 9th McDonald's will Corp. will host an expanded, virtual investor 
update with analysts. Unless thoroughly covered in the formal presentation the 
analysts will be asking two basic questions.

* When will all the dining rooms be open? * When will you bring back All Day Breakfast?

ADB was so over-hyped that every profile on Steve Easterbrook mentions that he 
was the guy who brought ADB to McDonald's USA. This puts management in a 
tough spot. They can't downplay the "success" of ADB and admit to the hype in 
previous years. And they can't tell analysts, "The franchisees won't let us".

McDonald's weighs the return of all-day breakfast - The Gazette
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October 7, 2020

Teens Prefer Chick-fil-A

Even though Piper Sandler interviewed 9,800 teens in 48 states the results in this survey 
cannot be correct.

Chick-fi-A is not modern and progressive. They don't have promotional partners in an entertainment genre that markets obscenities to children. They are making the mistake
of protecting their culture and their family values.

Unless they become hip and "with it" Chick-fil-A is destined to fade into obscurity.

Teens prefer Chick-fil-A by a wide margin
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October 4, 2020

 


Another LTO Cut Short

Given the shelf life of unfrozen beef it's easy to excuse running out of quarter meat 
but nuggets  are a different story. Prematurely running out of product is not a sign of 
a good promotion. It's a management problem.

McDonald's is running out of its Spicy Chicken McNuggets | Restaurant Dive
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October 1, 2020

The 2020 QSR® Drive-Thru Study

While the internals of this study are interesting the rankings are questionable.

Chick-fil-A deserves the top spot but McDonald's does not deserve such a low ranking. 
Panera is better than McDonald's? I enjoy Panera's tuna salad sandwich but you 
need a calendar to time their drive-thru service.

Dairy Queen has a better drive-thru than McDonald's? Give me a break.

The 2020 QSR® Drive-Thru Study - QSR mag
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September 23, 2020

Just My Personal Political Opinion

Small business owners should not participate in "Get Out The Vote" efforts.

Citizens who are not registered and don't vote are generally uninterested and uninformed. They will then depend on mainstream media to make their decisions. And all big government ideas sound good to them. Emotional ballot language works on them. Do we want such people to decide the future of our country?

Before you get involved in such efforts, ask yourself:

* Will my customers vote in the best interests of my business?

* Will my employees vote in the best interests of my business?

* Will uninformed citizens vote in the best interests of my business?

And, there is no such thing as a "non-partisan business coalition" or any political organization that is "non-partisan". They are all, at the core, liberal, pro-big government entities.

There are certainly non-partisan people who don't know anything about politics or care. Anyone who would build or work for a supposedly non-partisan organization is almost certain to be a big-government liberal and will stealthily steer the organization in that direction.

Having said all that, I would never attempt to stop or discourage another citizen from voting or would I be involved in any kind of disenfranchisement.

However, if I have a liberal, big government neighbor (and I do) I will not block his driveway so he can't go to the polls on November 3rd. But, if his car won't start I will decline to drive him to the polling place so he can cancel out my vote.

As illustrated on this website every day, the interests of small business owners is very different from the interests of large, multinational corporations. And these large companies are often run by card-carrying liberals who love big government despite the damage government does to the owners of small businesses.

Just asking you to think about it before you participate.

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Why McDonald's All-Day Breakfast Should Not Return

 Jonathan Maze - Restaurant Business

September 16, 2020

100,000 Restaurant Closures Expected in 2020

I've tried to stay away from much of the negative news in the restaurant industry because 
it's depressing and kind of scary. But since much of the bad news doesn't apply to QSRs 
with drive-thrus here's a comprehensive article on the industry and the current political 
situation in Washington D.C.

I'd think this would be good news for QSRs as people have to eat someplace and I'm sure
they are sick of eating at home. One problem - when Operators get sales increases in the 
future they might not know why. Whats working and what's not? The corporate guys will 
take all the credit but maybe it's just a different industry?

100,000 Restaurant Closures Expected in 2020 - QSR magazine

September 14, 2020

Defending Travis Scott

Some of the comments herein and other communications with McDonald's Owner/Operators appear to blame Travis Scott for being affiliated with McDonald's. And some had no idea that the rap genre contained such vulgar language.

First, Scott made himself famous. Then, in a search for celebrity promotional partners, McDonald's Corporation chased him until he caught them. On one hand, you have to admire his creativity and entrepreneurship. On the other hand, I can't support any "artist" who records spoken pornography and sells it to junior high kids.

But he didn't invent rap. The rap genre dates back to the late 1970s. Many of us became
aware of it through artists like MC Hammer. His biggest hit "U Can't Touch This" was an enjoyable, catchy song with fairly sanitized lyrics. I still enjoy it. But folks, that was thirty
years ago.

Somewhere rap went astray and we ended up with famous rappers like Eminem. At least
that was the guy I found my youngest son listening to as he entered high school. That was
fifteen years ago.

Responsibility for the fact that McDonald's Corp. is now part of the rap scene is 110% on McDonald's management and no one else. They are the ones who don't understand McDonald's historical culture.

Since rap has been around for a while why hasn't McDonald's gotten involved with rap celebrities before? It's because the company was run by people like Jim Skinner and Jim Cantalupo who understood the importance of building a company with actual values.

This generation of "leaders" just wants to be modern and progressive - and gross.
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September 6, 2020

What is McDonald's HQ Thinking?

The past month has seen some huge contradictions for the McDonald's brand. The
Easterbrook soap opera stays in the news and McDonald's management's 
holier-than-thou response is to talk about "values".

Out of the other side of their "values" management has gone all-in to partner with 
a rapper who (like most rappers) glorifies obscene language, sex, drugs, misogyny, 
and racism.

How can a corporation have "values" and then partner with a celebrity who promotes 
the lowest in human behavior?

I remember when McDonald's was a family restaurant chain.

I know, you're thinking it's a generational thing and I wouldn't understand. You'd be 
right that I don't understand how anyone of any age could listen to such garbage or 
pay to hear it. But the generational gap I find frustrating is that many McDonald's Owner/Operators in their 40s/50s/60s might not know what their marketing budget 
is supporting.

But don't take my word for it, read for yourself. Below is a link to McDonald's new 
partner's recent lyrics. 


How are your "values" doing now?
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September 1, 2020

Three Big Questions on McDonald’s War with Easterbrook

"What’s more, it has raised questions from franchisees, who’ve seen significant changes 
under Easterbrook and now question them given the company’s current allegations. “Operators are pissed,” one franchisee said."

By Jonathan Maze - Restaurant Business
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August 23, 2020

Great Choice for NOA Speaker

Click to enlarge




I've worked with Jonathan for years and he's one of the best reporters covering the restaurant industry. He has superior knowledge about the financials of the business. Not only at 
the corporate level but he always seems to understand the 
restaurant profitability side. Don't miss his presentation!

More on Goodyear

Topeka TV coverage that went viral - YouTube - 2:43

Fox's Tucker Carlson and guest discuss Goodyear

His guest blames corporate Human Resources departments for this kind of mess. 
I think it's a combination of corporate PR, adverting dept., and HR.
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August 19, 2020

Fun With Ronald

Click to Enlarge
This is a still shot of the filming of a McDonald's commercial in the late 1960s. Obviously Ronald is waiting on a technician fixing the flying hamburger. This is likely the only photo
in existence of Ronald McDonald (in costume) smoking a cigarette. 

Enlarge and check Ronald's right hand.
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August 13, 2020

A Historical First

If McDonald's Corp. has a culture problem it came to pass during the Easterbrook / Chris K / Hernandez regime. And now they expect two of the culprits to clean up the mess?

It's Official. McDonald's Has a Culture Problem
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July 30, 2020

ADB says, "I'll Be Back"

Translated, this comment by Bloomberg's analyst Michael Halen means "Franchisee 
profit be damned, bring back all-day breakfast".

“McDonald’s kind of underperformed a little bit early on in the pandemic. I think part 

of that was the fact that they halted their all-day breakfast to kind of help to improve franchisee margins and throughput at the drive-thru during lunch and dinner times."
- Michael Halen

But we can't blame analysts. For four years they've been told ADB was a huge success.

It's now official Wall Street lore and management can't go back and say, "ADB was not a
big deal".

McDonald's Earnings Disappoint, Starbucks Beats - Restaurant Engine
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July 25, 2020

Why Would McDonald's Promote Sauce Complexity?

It appears McDonald's has a "deep state" of marketing and advertising people who are 
driven to promote menu diversity and complexity that has nothing to do with what's 
happening in the restaurants.

Why all these sauces? Why would you advertise that you had so many sauces?

This is something completely contrary to what's working at McDonald's yet OPNAD is 
wasting their budget on a counter-productive commercial.

Five/six years ago I visited a McDonald's to sample the latest new chicken product. I placed
my order with a young man and he asked me what sauce I wanted. Since I was the only one 
at the counter I mischievously asked, "What kind do you have"?

He looked at the POS screen and started rattling off the various sauces. He looked like 
a healthy teenage fellow but his respiratory system couldn't handle the list and halfway 
through he stopped to take a breath and mumbled, "McDonald's has too many sauces".

If there had been a line behind me how much would I slowed up service times? Worse yet, 
what if I'd been in drive-thru?

Yeah, McDonald's has too many sauces yet OPNAD is blowing their budget promoting the 
variety.

There's a deep state in McDonald's that doesn't support or understand menu simplif -
ication. If such ads are on the air it concerns me that some of those in the deep 
state are Owner/Operators who participate in such decisions.

Candidate for the dumb commercial of the year:

https://www.ispot.tv/ad/nCxL/mcdonalds-mcnugget-sauce-portfolio
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July 23, 2020

There Can Be No Better Example of the ‘Cobra Effect’

While this article is about Wall Street and the global economy the first paragraph explains
the infamous "Cobra Effect". 

This is why the unemployment rate is high yet every business is looking for employees. Employees can make more money filing for unemployment. The Feds should no longer
be supplementing unemployment,

Government has been way too generous
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July 20, 2020

Fast Food Chains Focus on Simplicity

"Diners, in other words, might not be choosing their restaurant based on the products they 
serve so much as they pick them based on the length of the drive-thru line."

Jonathan Maze on keeping things simple - Restaurant Business

Taco Bell eliminating 12 menu items - NRN
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July 18, 2020

Coke, Your Customers, and Their Phones

Coke claims there are 52,000 Freestyle machines in service?

Pre-pandemic, one of the McDonald's stores I frequented has plenty of seating, a Playplace, 
a full size SSBB,  and does well over $3 million a year. When things are busy there is always a line 2 or 3 deep at the SSBB. I'm imagining guests standing in front of a Freestyle machine screwing around with their phones trying to make the app work and trying to decide what 
exotic drink they want to create. The line will stretch back to the kiosks.

Given the transaction counts at the typical McDonald's it would take three, maybe four Freestyle machines to replace one of today's SSBBs.

NRN on touch-less
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July 13, 2020

SSBBs Are So 2019



I've gotten some negative feedback on my comments about SSBBs. But none other than Coke agrees. I wonder, how many people are comfortable enough with their smart phones to use 
this kind of application?

We talk on our phones, we text, we e-mail, but in truth we use little of the phone's power. 

I carry a phone that could launch a mission to Mars but I only use its most basic functions.

It will be a few years (5/10?) before every consumer is ready to order their drink on their phone. Of course the younger generations will pick it up right away and that's why Coke
sent out this publicity photo of a twenty-something creating a drink on his phone.

But if Coke can leverage their experience from the implementation of 52,000 Freestyle machines into a replacement for the SSBBs they can corner the market and sell or lease a lot of equipment to QSRs. And get their syrup volume back up.

https://www.businessinsider.com/coca-cola-reveals-a-touch-free-freestyle-machine-2020-7

https://finance.yahoo.com/news/coca-cola-just-invented-a-way-to-save-the-soda-machine-from-covid-19-120031011.html
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Owner/Operators - The Cultural Conscience of McDonald's

Thanks very much to anonymous who sent in an insightful comment HERE including a
link to the YouTube video of the October NOA meeting.

Anonymous highlighted the speech by Larry Light. I'd only seen clips of his talk but the full
version is terrific! If you were in attendance it's worth a re-watch. If you haven't seen it - it's
the best 35 minutes you'll spend this week.

As anonymous indicates, Larry's portion begins with Blake's introduction 21 minutes in. 

The video is HERE

Again, the anonymous comment is HERE
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July 8, 2020

A Rare WSJ Article

WSJ articles don't appear here often because they're behind a pretty expensive 
paywall. But this is worth a peek as it ties in with the previous post  If you are not 
a WSJ subscriber check back as these articles often appear on other sites for 
no $$$. We'll them find them when they show up.

Buffets and Salad Bars, Closed by the Pandemic, Remain Roped Off - WSJ

This CNN article is very similar to the WSJ article
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July 5, 2020

Will McDonald's USA be Ready for the New Normal?


During the June 19 NFLA call management was asked about a "Drive-Thru" only option. Management seemed to poo-poo the idea based on previous experience. This is the new normal and previous research and knowledge mean very little. The typical McDonald's 
drive-thru percentage of sales is going to settle in at 5 or 10 percent above of what it was 
pre-pandemic. If it was 70% before, it may be 80% in 2021. 

This is now a germaphobe nation and your customers have been retrained. They'll also have a little PTSD and it's going to be difficult to get folks to feel comfortable eating next to strangers. Drive-thru only new stores and rebuilds as options might make a lot of sense in the future.

And on the June 19 NFLA call management was evasive about the future of Self Service Beverage Bars. SSBBs are another thing that will keep guests out of the dining room.

I've already admitted to being a germaphobe and that I think SSBBs are disgusting, always have. Restaurant operators of all brands should prepare themselves for a world without SSBBs. 

Following is a video from a radio station that appears to be a local patch job with some corporate video. Can you imagine customers viewing this or similar messaging and then be willing to use an SSBB in a restaurant?

The more you boast about cleanliness and safety (as you should) the less your guests will go anywhere near an SSBB. As said before, if guests are afraid to touch your outside door handles they're not going to touch the levers to get ice or pour a drink.

This rejection of SSBBs will drive more customers to the Drive-Thru where they will feel 
that the McDonald's crew person handling their drink is more trustworthy than the customer before them at the SSBB.

Video from an Atlanta radio station

How the pandemic will change how restaurants are built - Restaurant Business
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