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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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