If Jiving Joe and Clueless Chris read this blog (and they should), they are about to have a very bad day.
McDonald’s has clearly communicated through their actions that they care more about their shareholders than they do the owner operators, and that is a painful reality to deal with"MCD owes a legally binding duty to the shareholders, and not to operators beyond the very few words in the franchise agreement (and those are even diluted to mean nothing at all). The sooner O/Os realize this, the better. Why it took this crises for people to see what was written all over their newly demolished and rebuilt (4 times over) walls is the really stark story. MCD IS NOT IN THE SAME BUSINESS WE ARE IN!!!!MCD is in the royalty/rent collection, financial engineering and money printing for shareholders business (with a hefty side of boosting stock option to be in the money business). MCD may need operators, but not any particular operator. MCD doesn't care who is in the restaurant. I fact its more profitable to churn you out and resell "your" business to the next operator in line adfyter you are drained of funds rebuilding MCD's real estate for them.
Full article here:https://www.investors.com/news/management/leaders-and-success/kroc-built-mcdonalds-restaurants-into-an-empire/Here's an extract on how it used to be. Many of you would remember:Paul Facella, a longtime consultant at McDonald's and the author of "Everything I Learned About Business I Learned At McDonald's," notes that Kroc had a slogan that epitomized his unique relationship with the franchisees: "You make the first buck, I'll make the second buck."When Kroc first opened for business in 1955, contenders in the fast-food arena were A&W, Dairy Queen, Tastee-Freez and Big Boy."Kroc took great pains to differentiate McDonald's from these players. ... The crucial difference between Kroc and his rivals was one of world view. He saw franchises as business partners, not mere customers," wrote Daniel Gross in "Forbes Greatest Business Stories of all Time." "In his travels selling the multimixer, he had observed the way franchisers milked franchisees for profits without concern for their long-term viability. Kroc vowed not to fall into that lucrative, but ultimately unproductive, trap," wrote Gross.Facella added: "Kroc understood the franchises were a long-term relationship. He wanted to make sure the franchises were successful, because the success of the franchise would ultimately make the company successful. In the beginning years, if a franchise was struggling, if he had to help, he would work with it. He realized it was to the company's advantage as opposed to saying, 'Hey you missed your franchisee payment.' "Ultimately, Kroc left his competition in the dust as he expanded his operation while focusing on quality every step of the way.
This was a well written letter to the operators, please make sure you read it. I fear to many times folks do not read the articles first. I applaud who ever wrote it. Secondarily, this letter or a version of it needs to go to the Operator community, the Rank & File Operator needs to hear from them their leaders, sometimes un-sanitized. That way we are all speaking we the same voice. Lastly, I heard on the NFLA call last night similar information, however the most shocking information I heard was the lack of preparedness by financially distressed operators when it is time to engage with McD. You MUST know your numbers and make a case for what you want. We all employ CPAs that can help us prepare a plan to sit down and discuss the facts with any Field Office finance person or Ops Lead. This type of POOR prep is what lead to a portion of the PPP loans not going through and yes in fact that is just what David Bear said last night.
To the comments above -Just another reason to join the NOA. They may not 'need' any one of us, but they sure as hell need all of us. All they have to do is give us something, anything... something small for the whole US... cut a few percentage points off of service fees, something that shows they understand and are trying to help. And then come to the rescue for the hot spots that have been unbelievably hit hard. If they are waiting to get paid in August/Sept, there is going to be a lot of relationship issues at that time. Especially for O/Os who did not get in on PPP.One of the company's principals was to 'lead by example'. I'm not sure they know what that means. Leading would be coming up with the solutions and presenting them to NFLA. Not the other way around. Leading takes sacrifices, and they are not making any. Leading wouldn't be selling a majority of McOpCos and then blasting our people practices in a letter to the NOA. Do they even understand our people practices are directly related to the economics of this business that they could help with. Nobody is asking McDonald's to guarantee Cash Flow and Equity. But we are expecting them to recognize that our Cash Flow, our life blood is being hit hard, and they could take a small part of that off our shoulders. For the US leadership to preach Sales, TCs & CF for the past year, it sure seems to be the last thing they want to talk about now. I would like to see some factual data on CF % decline for Operators vs the Company and then lets talk about equality. Join the NOA!
This response was fantastic. I will add one thing that was left out. In Joe E's letter, he made some comments about how we should be treating our people during this time. He outlined a few behaviors we should be doing for our teams....... In short, it's insulting. The things we've done for our teams over years..... is absolutely humbling and in some cases life changing for the individuals. His suggestion was in poor judgment. We're not in the joint employer business and if, in fact, McDonald's does feel that way -- be a part of the solution. NOT the problem. Come to the table to mitigate our financial burdens that would "allow us to do the right thing for our employees."I'm not expecting much from McDonald's, but I do expect SOMETHING! Pay all US Real Estate Taxes this year. split service fees, pay all technology fees for the rest of the year. ANYTHING to show a full time best efforts attempt. As there is a good argument to be made that our Franchisor is not delivering on its own franchisee agreement.
Where's Gerald "Jerry" Newman when you need him. He's spinning in his grave after seeing what has happened to the "operator first" system he helped build with Ray and Fred. Very sad!
If McD truly treated us like partners instead of employees this would be better. Unfortunately our partners are screwing us I SUPPORT THE NOA
I am so very tired of the butt kissing operators who drink the Mcd koolaid to try and get more stores. AS OPERATORS WE NEED TO STAND TOGETHER. If you disagree please go work for MCD. ( youre already doing so unfortunately). There are nearly 200 operators who will not survive this due to MCD refusal to help. The partnership is DEAD
The NFLA is useless and toothless as long as Mcd has them on the corporate lease like they do. The NFLA should be disbanded and the NOA should take over as owner advocates. My opinion.
A franchise company will always want a corporate-approved advisory panel. If the NFLA was dissolved McD-HQ would find a way to form another group. It's unlikely the corporate-approved advisory group will ever be a junkyard dog. Joe E. already threatened to stop communicating with the NOA but corporate is forced to deal with the NFLA. Seems to me the structure that has evolved here is a perfect balance. Messy? Yeah. But politics is always messy..
NOA needs to learn how to do the politics the right way, like the Jack In the Box franchise association did. They got their way multiple times.MCD franchisees? Not so much.
Joe E would be stupid to stop dealing with NOA and NOA needs to realize that right now, Joe E's biggest fear is that NOA stops talking to him. Other systems' franchisee associations made the management of their franchisors pay the price regardless of whether they were talking to them or not. Management are hired hands. Owners in those systems knew it and acted like it. You don't have to be mean, just consistent and persistent. It doesn't need to be Joe E or Chris K that you are talking to.
No one wants to show up to a negotiation looking for a fight. However, if you're unwilling or unable to fight, that is a different concern. I have no doubt, somewhere in the fingerlings of the corporate sphere there is a passing of the NOA membership rolls being used to identify and target specific operators.There will be discussions with those operators when it comes to financials, ratios, and compliance - that will differ from the remaining "operators" that toe the corporate line. The corporate expectation is a minimum of a 25% loss in operator numbers over this crisis. There ar at least 25% of operators refusing to join the NOA in hopes of acquiring that dying percentage.Operators can sense the sickness in the corporate ranks. However, if they are unwilling to address the same sickness in its own ranks. It can never be successful. That's the difference between other systems - they want to fairly growing shares thru honest business deals and acquisitions - not hostile or subversive take-overs.Three years, and a national crisis with outrageous cost pressures on operators - and they still cant get the $1 drink off the menu. They can allow the LIMIT OF THE OVERALL MENU, adding to their revenue generation dilemmas. Hows that for leadership?
Retribution for belonging to an independent franchisee association can work if the group represents 10% or 20% of the franchisees in the system. When an organization pulls the kind of attendance/membership that NOA gets there's not much the corporate folks can do about it. Hence the defensive tone of Joe E.'s letter.And keep in mind, McDonald's USA is getting very close to having too few Owner/Operators. This is what you get when you have a management team that doesn't understand franchising..
As a NOA rep, I can assure you that the NOA does NOT share its membership rolls. If they (McDonalds) knew about a specific owner, it is because the owner TOLD them by their words and/or actions. Participation is both voluntary and confidential. (if desired)75%-80% of the OWNERS cant be wrong.JOIN and SUPPORT the NOAMMGA
Can you honestly say that hasnt happened?No one said the NOA deliberately shared the list. However, to honestly think someone hasnt is very naive thinking.Also, with the field office structure to give Chicago plausible denyability. I seen first hand the unorthodox, if not outright criminal treatment in Business Reviews making operators ineligible and forcing restaurant sales.Theres no ombudsman process, no recourse.. as franchising simply states its their right of refusal. All acted upon by the same unscrupulous data filed from a field office. NOA or not, there isnt a protection or arbitration process in place.They cant even address a $1 soft drink. How are they gonna be a arbitrary force for unscrupulous acts on their membership. Theres more than enough active examples to involve themself if they truely wished. Understand, we all want the NOAs success. But no video is gonna quell the issues and doubts. Actions speak louder than words. If not NOW, WHEN?
ONE MORE TIME- OPNAD is responsible for $1ASD- blame your OPNAD REP not the NOA or NFLA!
It is time to address the “service fee”...pretty sure every survey done says the whole system feels there has been a loss of support since field first...so why am I paying same for less. I get that MHQ has to pay their people etc but our Field Office staff are unproductive fixed costs right now....and no end in site.
Re: two comments above. I totally agree how can we blame the NOA when our operators on OPNAD vote it in $1 drink. Makes no sense. I do grow frustrated with operators that talk the talk but don’t join the NOA but then sit back and enjoy the benefits of our unity. If your not happy with the results of the NOA so far you are being shortsighted. One on one we have zero voice, you must know that from your biz reviews and conversations/dealings with corp. JOIN THE NOA!!
NOA does have zero voice as long as our fellow operates sell us out, whether in secret to curry favor with Chicago to get more units or in votes "representing us."
What should NOA do?Google Steve Horn and DDIFOSteve Horn engineered an equity extraction program against Dunkin's own franchisees. They had to unite and take action. The franchisees won.
Post a Comment