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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.

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?

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

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.

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.

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

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

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 

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:

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

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

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

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.

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

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

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

June 27, 2020

If McDonald's Corporate Executives Get Their Way

Barron's on a Biden Presidency:

"..... calls the Democratic labor agenda the most underappreciated election-related 
risk, as a higher minimum wage and new laws to organize workplaces would be 
priorities, especially hurting McDonald’s, while more labor protections for gig 
economy workers would affect companies like Uber."

Positioning your portfolio for a Biden Presidency

June 22, 2020

No ADB Yet, But You Can See it From Here

From the article: "McDonald’s added All-Day Breakfast in 2015, generating strong sales and helping to bolster the chain after a years-long sales lull."

Here's how this is going to happen. As Jonathan Maze points out, when ADB was launched
McDonald's USA sales had been soft for several years. It was time for a natural business cycle rebound that made ADB look more impactful than it actually  was.

Easterbrook took credit for the "success" of ADB and gave it so much fanfare that it's a major
part of this career history. The media and Wall Street analysts still believe the hype and will
expect ADB to make a comeback once more dining rooms are reopened.

McDonald's management can't admit that ADB was over hyped in 2015 so they will continue 
to claim that customers are clamoring for ADB.

After all, what are they going to tell analysts - "We want to bring it back but our franchisees won't let us"?

McDonald’s is reconsidering the future of All-Day Breakfast - Restaurant Business

June 13, 2020

When McDonald's Corp. Plays Politics It Always Backfires

So McDonald's Corp. is using the phrase "Black Lives Matter" in corporate produced advertising?

From my perspective Black Lives Matter is three things:

* It's a slogan.

* It's a massive internet presence.

* It's becoming a political party.

At the present time the focus of BLM is apparently the Defunding, Deconstruction, and Demonization of law enforcement across the country.

It's hard to imagine there's a company in the USA more interwoven with law enforcement
than McDonald's and its franchisees. And it's not just because of McDonald's size. It's about the all American image, the flag flying at every store, and the constant interaction between McDonald's Owner/Operators and law enforcement.

This was true when I was a crew person and police could eat for free at McDonald's. It was 
true when I was an Owner/Operator and the San Diego County Sheriff's Department was a 
key component of my LSM activities. And It's true today as evidenced by thousands of 
postings on social media.

The trouble is, McDonald's management appears to be completely unaware of this long-standing relationship. And the ad agencies and public relations people will be oblivious to
this history.

So management will act emotionally and thrust the brand right in between BLM and law enforcement. That's the last place any company should find itself.

Taking sides in this situation (which appears to be getting worse as I write) could be the 
biggest Lose-Lose in the history of McDonald's.

McDonald’s #BlackLivesMatters Ad Was Shortsighted and Hollow – Adweek

Workers Aren't Impressed by Corporate Anti-Racism - NYmagazine

No, That Company Cannot Fund Trump's Champaign


  Quashing some internet rumors about Trump and Biden

June 8, 2020

Taking Their Time

"Hopefully, we’ll get our lobbies open soon,” Mr. Meoli said. “Personally, I am in no hurry, especially at 30%. With all that is required on cleanliness, sanitation, hygiene, keeping customers safe, keeping our crew and managers safe, to do that for 30%, that doesn’t make a whole lot of sense right now."

McDonald's Owner/Operator Mike Meoli

Delaware State News

This Is Taco Bell Being Smart

The McDonald's PAC is a dinosaur from days gone by when our country was not so 
divided and when both McDonald's franchisees and McDonald's corporate believed 
in free enterprise and entrepreneurship. 

Taco Bell Corp. does not make donations to presidential political campaigns and has no involvement with or control over donations made by franchisees.