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February 13, 2021

IMHO

A franchise system should have a corporate-approved advisory group and a franchisee entity independent of the corporation.

Much like we have two houses of Congress. The Senate is supposed to be the upper house where ideas created by the House of Representatives are reviewed or stopped cold. Members of the Senate serve six years or more so they learn how government works. House members serve two-year terms so they are constantly running for reelection and are more in touch with their constituents.

A healthy franchise system needs similar entities. A group that interacts with corporate and moves a little slower and a group that's sometimes wild and crazy, is constantly making trouble, and forces the corporate-approved group to deal with real-world issues.

Imagine the United States if we only had the U.S. Senate. We'd be ruled by a bunch of politically correct fat-cats who use their positions to serve their own self-interests.

Why does that sound familiar?
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20 comments:

Anonymous said...

Richard- I totally agree with your sentiments. Unfortunately Chris K, Joe E, and the Senior Leadership Team (SLT) never learned the lessons that Ray and Fred taught. Ray said "Be ethical, Do the right thing". Fred warned that the company should NEVER be a supplier to operators because it is a conflict of interest. Fast forward 66 years- McDonalds is our (corrupt) technology provider, and will not even give proof of a supposed debt. And Chris, Joe and the SLT do not even know what being ethical means. They treat their so-called "partners" like dirt, impose fees on us without substantiation, change long established policies without notice, and even compete with our stores by selling our products in grocery stores. They call us partners yet ignore and belittle our elected leaders. They put the stockholders interests over the owners interests. For the first time in my multi decade career, I AM ASHAMED OF MCDONALDS!

Anonymous said...

I must sadly agree with the above post. Due to the behavior of the Top management of the company, I no longer believe in the system. The partnership is DEAD.

Anonymous said...

Ditto!

Zero confidence in the current corporate leadership.

Its time for operator leadership teams to publicly claim the same.

#walkaway

Anonymous said...

There will be need of a different corporate structure altogether, with 95% of restaurants independently owned and operated.

Theres no need for these regional offices and hierarchies- with less and less operational knowledge and experience.

Last thing restaurants need are clowns with purported book smarts, no operational expereince, coming to evaluate. Seems they should of learnt that lesson with Mystery Shoppers.

Need a simple rent structure (8.5%), give them the service fee (they do nothing for it anyways) and make OPNAD entirely operator driven.

Outsource tech with real tech partners, reducing those cost by 2/3 - reducing restaurant financial losses from the constant patches and updates.

The list of low hanging fruit is endless...

Anonymous said...

Amen to the above...each FO has about 60-75 staff.....ask yourself how much this costs and the value you get. I don’t need them.

Anonymous said...

Today, the McDonald's CFO committed an seriously erroneous report, if not an outright attempt to defraud the McDonald's Franchisee system.

In a documented 2016 electronic messages titled 2016 McDonald's Annual Technology & Digital Fees FAQ's and OTM Contacts, McDonald's submitted timely Technology communications and invoices regarding the Annual Technology & Digital Fees. The last of such messages was a message by MIKE DUKART, TECH BOARD which not only listed the Tech expenses by line item impacting each restaurant. It clearly states on PAGE 2 of 6 of that same report, "The 2016 billing covers the period of JULY 2016 - JUNE 2017. You are being billed if your restaurant was using the technology items listed below on or before June 30, 2016".

Therefore, starting the forward monthly billing in the latter part of 2017 would of been a natural billing cycle; with a zero sum due or carried forward by the individual restaurants. What is also alarming is the DRASTIC cost increases (nearly doubling in 2017 and over tripling today). Operators are NO LONGER provided an itemized cost of those expenses. All the while not experiencing any additional operational benefit in the restaurant of those cost.

Operators are now informed a "Independent" audit is underway, but had no choice in its selection. They will have no recourse but to simply accept its finding. Otherwise, operators will be threatened with non-compliance. All the while, fees will quadruple with zero recourse.

Anonymous said...

Did I catch it right in the tech webcast that it was said they held the debt based on economics at the time? I guess they feel justified when they have a small group of operators rubber stamp that, but if that was the case was this not done to get us to spend even more on EOTF? It would have been one thing if this was communicated at the time they were holding this debt, but for all their talk of transparency it certainly seems shady that event leading up to EOTF.

Anonymous said...


Why did we stop the pause? The Board Elected CEO and appointed President of McDonald's USA have decided to create a debt to cover the legal battle they will loose against Easterbrook and his severance package. Spero is should be terminated for having knowledge and not disclosing their alleged funding shortage. During the wonderful BBV2020 Gallery Walk we were deceived on the true costs of technology that even today function improperly. I'm not an attorney, but I believe NOA with their attorneys should seek litigation on the fraud and financial deceptions that have occurred.

Anonymous said...

Thats the explaination today, but theres no record to back that explanation. In fact, there are tremendous documents that the debt DOES NOT exist.

Again, go to the email with the 2016 Tech Fee's, which shows tech fees paid in 2016 carried until June 2017 (end of year). When then the monthly amounts carried forward.

This was a real time accounting by the tech board, in a joint message sent by McDonald's!

Even if somehow the MCD explanation is true, the amount owed would have been the 1st 6 months of 2017! As operators paid the higher cost moving forward. Hence the accured amount would if been that 6 month cost at 2017 prices. Thats nearly half of the claimed amount by McDonalds.

Under no accounting model would it show that 2017 accural to be carried with 2021 prices! No wonder they volunteer ZERO INTEREST, when they can essentially double the cost.

That attempt alone adds insult to injury.

This in no way addresses the outrageous cost increases since 2017 with zero explanation to those cost.

Anonymous said...

Did anybody else catch the fact that on yesterdays Mcd webcast, it was stated that Mcd employees who work on the technologies have their salaries ADDED on to the tech costs billed to the stores?

WHY ARE WE PAYING SERVICE FEES ?
DOUBLE BILLING!

Anonymous said...

Imagine this, your made to purchase a service, your not allowed to question what that service consist of (confidentiality agreements), who's prices are outrageously increasing.

Your prohibited from doing your fidicuary duty as the CEO of your independent business, to find an improved cost benefit for your company. All the while being rated for your financial viability by the same provider whom is consistently raising those cost.

When you ask questions, your companies viability is threatened by that same provider.

Isnt it odd, then the term Partnership is being used? Not to sound facetious of those on the technology board, but damn... how did operators get down THIS road so far?

Paying these cost.. and remember, corporate shaved many of the cost of tech to direct billing to the operator. It cost an additional $23,000 annually to be able to ring in a hamburger on the front counter. Which once only took the hardware cost of a register, CMU and for some an ISP...just to make a sale.

Understanding, operators paid for NEWPOS development - yet still pay a licensing fee when you're made to swap equipment. And your old regiaters you used for 20 years (simply to sell a hamburger), now get a mandated retirement approximately every 3-5 years. By... guess who?

Where's the alternatives? Competition breeds cost competitiveness. Cant ask for honest deliberation, then hide behind confidentiality agreements. Its not how being a Service Provider works.

Anonymous said...

Richard, could you please clarify your comments. Specifically, with your Congress analogy, when you say Corporate approved Operators. Do you mean, operator leadership who are appointed? or voted in?

Thanks in advance.

Richard Adams said...

NOAB, NLC, NFLA, and whatever comes next.
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Anonymous said...

Anyone who thinks corp doesn’t influence the vote or appointment of NFLA reps is blind. Case in point- Big South Coop NFLA rep, a former Mcd Regional Manager was appointed WITHOUT A VOTE! Wake up people. Lots more examples out there.

Anonymous said...

Anyone who thinks corp doesn’t influence the vote or appointment of NFLA reps is blind. Case in point- Big South Coop NFLA rep, a former Mcd Regional Manager was appointed WITHOUT A VOTE! Wake up people. Lots more examples out there.

Anonymous said...

The congress analogy does exist, as you can have those open and honest discussions within the COOPS... right up to your next business review. Then get a arbitrary decision of ineligible under operator involvement.

How many good operators, simply wanting to understand or make a legitimate business point, got run over due to FO leadership taking the open and honest discussion personal?

Isnt it suppose to be about the BRAND?

Anonymous said...

One smaller piece missing in this technology discussion is the fact that some of these fees are to pay for the way they use technology to gather data from our restaurants for their use. Through out the years I have had company people show me my specific data like sale change by hour, operational measures such as DT times, cars count changes by day part and others. Many times this data is presented in ways that I have never seen or have the opportunity to access. I like seeing it, but that's not the point. I own it and I should have the power to provide access if I desire and if I do the same benefits of using programs they use to analyze. I have never in my 30 some plus career signed or accepted the agreement for mcd to gather my data other than for sales reporting. I say as much every time it is presented to me, and then I never see anything again until the next consultant comes around. The larger point of this is if mcd has tech companies performing this service for them, what else are they doing for their benefit? All tech in HQ? field offices? Hardware for staff? Maybe I'm wrong, but I think the fact that the question can be raised is the whole problem with them managing the tech piece with the secrecy they claim they must have.

Anonymous said...

Richard, I appreciate your response on the NOAB, NLC, NFLA. I'm not really sure 2 of those were actually voted on by the operators? So do you support Appointed? or Elected? I'm just curious to see your response because there is this anonymous email group spamming folks within the system. Your message seems to jibe. That is, without clarification.

Richard Adams said...

Elected of course. Appointed "representatives" will only support the people who appointed them.

And it gives corporate the opportunity to claim any initiative was "Owner/Operator driven" and corporate is "aligned" with the Owner/Operators. Or, Owner/Operators were "aligned" with corporate.

All should be elected, not appointed. Elected with a secret ballot.
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Anonymous said...

NOA needs to get the playbook of other franchisee associations that won wars like this, the Dunkin guys did it as did the BK owners.

MCD is NOT in the same business as the owners are. This is a fact. NOA needs to understand this business that management is in to win this.

MCD management does not care which operator is in the restaurant. . You are simply a cash flow and anyone else can be plugged in. This is how they think. Those cash flows get securized and mentioned for shareholders and managements bonuses. They will never willingly let go of this business model.

You have to take what is yours. Forst, you need to learn how to do that.