Coalition of Franchisee Associations

April 30, 2020

The Media Loves the Kalinowski Owner/Operator Surveys

Report: McDonald’s sales improving but still down in April - NRN

Restaurant Dive - McDonald's franchisees frustrated


Anonymous said...

McDonalds Corporation makes it seem like Operators only want their money, when in fact, operators are asking for some sort of cooperation in maintaining funds to keep the overall system afloat.

Deferment isnt aid, its a strategy. Switching a dollar from one hand to another, still requires forfeiture of the dollar. Just at a different place and time. All the while operators are taking huge hits financially.

Even the THANK YOU MEALS, with food and paper reimbursement, doesnt account for the operators cost of Labor, Utilities, Taxes and other expenses to produce the meal. Not to mention, the dramatic loss of sales in a major segment of the transactional sales force that is actually out on the road using the drive-thru. Understand, the meals are a great return to the community. Operators always step up when needed. But be clear, when it meets the give... its never a WIN/WIN for the operator. Especially, when the giving is DURING the active crisis, not afterwards.

Seems most are stepping up to the plate for the brand, from taking PPP loans to keep a workforce and restaurant open, struggling to keep product flows. Everyone that is, except the brand itself.

Deferment is a stock price strategy play, not a sincere obligation to the brand.

Currently, the brand cuts products to support suppliers.. it will issue a dividend to stockholders...but cant cut rent and service fees for its franchise operators?

When compared to other QSR brands, McDonalds has done little for its franchisee's that currently shoulder 95% of the active restaurant force in the USA.

Hell, to be fair, its done little for its own corporate employees during this downturn. All the while, dictating to franchisees they need to do more for their independent businesses.

In the end, the brand will survive, because theres still a slight majority threshold in the field that have the 'ketchup in the blood' to make it survive. Not sure what the next go around will look like. But when your in for only the stock price, I guess that will be someone elses issue, right?

Anonymous said...

Keep talking to Kalinowski. MCD corporate cares far more what he thinks and says than it does any operator or even NOA.

MCD has its foot on the throats of operators and NOA. Stock analysts cannot be controlled like that. If corporate lies to them (the only way to control the spin) it's a short term thing and the market makes corporate pay dearly after that forever.

Anonymous said...

Agree McDonald's will survive but this will be a far different company for years to come and probably not a leader in the restaurant industry. McDonald's borrowing money to pay shareholders a dividend does not serve the franchisees well. McDonald's borrows another $6.5b dollars to add on to their all-time highest debt ever owed of $47b who do you think has to pay that debt off? McDonald's basically has only one revenue stream, income from restaurants so who operates those restaurants, so who's going to reduce their debt obligations?

McDonald's has made massive investments along with the operators that will have little ROI in the coming years, and the overall mounting debt we all face will prevent us from being nimble and move quickly as new technologies, machinery and the way people dine changes over the years not just due to COVID-19 but would have happened anyway. That is why you preserve capital so you can do investments over time as needed and as new technologies come about.

I could never say all McDonald's required re-investments have had no benefit, double DT's, digital menu boards, etc. all have benefits; even refreshing lobbies make sense but should it cost $500k of course not and no one will ever get any ROI on that expensive lobby. Did kiosks ever make sense for every location of course not, do our kiosks look like someone using a mobile phone from the 1980s? I have never seen one brand with bigger more costly kiosks in my entire life and now one wonders if they will ever be used again and to what degree and the cost to operate them having someone cleaning them after every use? Kiosks are just one example like many re-investments that have virtually no ROI, they don't save labor, don't have customers visit more often because we have them, they are only promoted as having a higher average check and we all know why that is. The sad part of their demise will be blamed on COVID-19 versus if we would have done it differently and not forced the franchisees to do them we would have a different feeling towards them.

Anonymous said...

MCD corporate believes that any dollar made by an operator is a dollar stolen from them.

This is why there is no relief and why they want operators to blow wasted money on 500k lobby remodels on real estate that MCD owns. Its not really your money that you earned. They really think this way.

The sooner operators realize this and weaponize NOA against this current management team and gets them replaced, the better. Time was running our before this crises. The crises just shined a brighter light on what these people think.

Anonymous said...

To the operator above- How exactly do you WEAPONIZE the NOA?????

Anonymous said...

Exactly. To McD's, the NOA is just a vehicle through which Operators can vent their concerns and complaints about the unfairness in the system. To McD's, it's much simpler to have to deal with complaints coming from one organization than 1,600 different organizations. It's much easier to say NO! to one organization than 1,600. Read your franchise agreement.... McD is the weapon, not the NOA!

Anonymous said...

I’d also like to know how “they get replaced”.....BODs are elected. CEOs are typically fired for policy violations (Steve E) or dismal business performance relative to competition. Looks unlikely here to be honest...

Anonymous said...

To weponize NOA and get Mangement and even directors replaced, look to the franchisee associations that have succeeded at doing it. Dunkin, Jack in the Box, Subway ( seen Sue Greco around HQ lately? How bout a $5 foot
One.) BK ( yes, even from second tier competitors something can be learned) and others.

Another comment or asked what they had in common. They joined Together and learned from each other's battle scars and then won their battles and then their wars. It's pretty obvious.

Or keep talking. That still seems like its popular.

Anonymous said...

I made the last comment on weponising and outsing bad management. I in no way meant to malign or diminish that Blake Casper and his fellow NOA directors have done or accomplished. Their courage should be applauded and appreciated by their fellow franchise owners.

They need continued support and help recruiting the owners who are not yet members.

They can get more aggressive if they continue to get support for their exploring options.

Anonymous said...

If you want the NOA to "weaponize" and you are NOT a member of the NOA, YOU ARE THE PROBLEM ! There is strength in numbers and MCD would have a much harder time if the NOA had 1400-1500 members.