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May 19, 2022

Pretty Pictures of Food is illegal?

"Wendy's and McDonald's advertisements for its burger and menu items are unfair and financially damaging customers as they are receiving food that is much lower in value than what is being promised." the complaint says.

McDonald's, Wendy's accused of beefing up burgers in ads

"Financially damaging customers" - What a joke. These are the same people who comment on financial websites claiming that every time they go to McDonald's the beef patties are smaller.

May 11, 2022

I'm From Chicago And I'm Here to Help

NOA survey and our Kalinowski survey say:

“The PACE audits will hold us back from building sales and will increase our turnover of employees. The worst time in the history of the system to implement such a program,” one respondent said. “Stop PACE programs, which will decimate the staffs we need to operate,” another said. Overall, the proprietary survey ranks franchisee relations with corporate a 1.19 on a scale of 1 to 5, the third-worst score in its history dating back to mid-2003. 

McDonald's Operator Surveys - PACE is poorly timed -CNBC

Oak Brook Has a New Occupant

 Ace Hardware to move to former McDonald's HQ

May 9, 2022

Profits not Politics

More than a few visitors to this website are fans of Andy Puzder, former CEO of CKE Restaurants. Andy and a few friends have an investment venture based on doing the opposite of what ESG and the like demand. It will be interesting to watch.

"We are not supportive of Environmental, Social and Governance (“ESG”), Diversity, Equity and Inclusion (“DE&I”) or similarly “fashionable” investment criteria that place ideological, social or political goals ahead of our investors’ financial interests." - 2nd Vote Advisers

2ndvoteadvisers.com

Vendors Suffering Thru the Recession

Tyson says profit up 74% in Q2

May 4, 2022

The Disease of ESG

While we often complain about someone or some entity being "Woke" there's a greater long-term danger out there for corporate America. That's "ESG" or Environmental, Social, and Governance. This is Wokeness on steroids and is a more formalized way for non-stakeholders to have a great influence on public companies. And there will be no end to their efforts to reshape the corporate world to their personal liking.

For instance, the efforts of activist investor Carl Icahn to change the way McDonald's handles pork production has morphed into an effort to eventually remove animal protein from the McDonald's menu entirely.

In other words, McDonald's will be forced to replace animal protein with fake meat just because some people think it's better for the environment. That doesn't mean customers will buy the product.

Icahn Pushes McDonald's to Expand Meatless Options

McDonald's Chairman of the Board mentions ESG several times in his annual letter to shareholders. He also states that "climate change is one of the most pressing issues of our time". That give the environmental whackos a blank change to hassle McDonald's about an endless list of supposed sins.

What is ESG? - A course description


Cick to Enlarge


Starbucks Fighting to the Death

Starbucks increasing wages and perks, but not at company stores

May 2, 2022

Interesting CEO Pay

 

While putting together the aforementioned "market cap" numbers I  happened across the recently-released numbers for the CEO of Walmart. In their fiscal year 2022 he was paid $20.83 million. I thought that number sounded familiar. Sure enough, it's just a little more than McDonald's Corp. paid their CEO for the period of time.

Let's see, we've already established that MCD market cap is $188 billion while Walmart's market cap is $431 billion, more than twice the value of MCD.

But Walmart sales for fiscal 2022 were $572 billion, more than five times MCD system-wide sales of $112 billion.

Yet the CEOs make the same $$$?

There's another difference - Walmart's CEO began his career 30 years ago as an hourly paid teenager unloading Walmart trucks.

Activist investor Carl Icahn recently called compensation for McDonald’s execs “unconscionable” and said, "the board was condoning multiple forms of injustice."

Walmart CEO earns $20.83M in fiscal 2022 (nwaonline.com)

"The Boardroom Initiative" Fights Wokeisam in Corporations

This topic is even more important in a system that is predominantly franchised.

Having little in common with self-employed franchisees it's easy for the corporate side to speak out on issues and give the impression that their personal positions represent the entire franchise system.

Meanwhile, the franchisees are shouting "no comment"!

Wouldn't it be delicious if a group (any size) of McDonald's Owner/Operators publically supported the Boardroom Initiative"?

Led by former McDonald’s USA CEO is initially taking on Bank of America

McDonald's Q1 Earnings Transcript

One way to gain insight into where your franchised brand is going is to pay attention to what management is telling the investment community. Pay particular attention to the questions from the analysts.

Seeking Alpha - McDonald's Corp - Q1 2022 - Earnings call transcript

April 28, 2022

Elon Musk Won't be Buying McDonald's - He Can't Afford It

At least he wouldn't be able to take McDonald's private as with Twitter.

Twitter's market cap (# shares X share price) hovers just under $40 billion.

Musk's net worth is said to be around $250 billion. Of course, that's not all liquid but one can see how he has the muscle to take on a relativity small company.

McDonald's current market cap (averaged over the last three quarters) is $188 billion. So, he would need to liquidate 75% of his net worth to gain complete control of McDonald's. That's why he put up that Tweet as a joke.

By the way, a few other market caps: Walmart $431 billion, Exxon $372 billion,  Coke $286 billion, Microsoft $2 trillion. 

Pretty soon you're talking about real money.

April 23, 2022

Fake Meat Flop



"Clearly, the “save your body, save the animals, save the planet” movement has not made a dent in actual eating habits"

"Of course, the ban-the-beef movement is part of the ban-anything-that-tastes-good mindset that holds sway in woker-than-thou circles."


Do you really want these people in your restaurants?







CEOs Acting Goofy

I rarely post articles from the Wall Street Journal because their subscription is pretty costly. It can run $400 plus a year. If one spends a lot of time on their site, it's worth every penny. But I rarely link to them because I don't want to promote costly websites if they are rarely accessed.

But this article on Disney is worth a read and at least the video preceding the article is a freebee, I think.

I say "I think" because I'm a subscriber so my devices are loaded up with their cookies and I can't tell exactly what your system will allow.

But here's a few pull-quotes:

"That’s the latest chapter in this tale of a CEO who followed his woke staff like a lemming off the cliff of cultural politics. Disney employees demanded that Mickey Mouse oppose Florida’s misdescribed “don’t say gay” bill. Now state lawmakers are reacting by putting down a few glue traps."

"Soon Mr. Chapek (Disney CEO) was groveling to his underlings and calling Florida’s bill a “challenge to basic human rights.”

"There’s a warning here to other companies, especially Big Tech and Wall Street, which are mainly based in liberal states but conduct business everywhere. If they try to impose their cultural values, they risk losing Republican allies on the policy issues that matter most to their bottom lines, such as regulation, trade, taxation, antitrust and labor law." 

Revolt in Disney's Kingdom - WSJ

The Government's Here to Help

"Owners were furious,” wrote one former McDonald’s executive familiar with the negotiations in an email. “They couldn’t believe the world’s largest restaurant company couldn’t give them some support … when you read about all the other smaller restaurant chains doing it every week.”

The company ultimately deferred — but did not forgive — the collection of $490 million in rental income, plus nearly half a billion dollars in royalty payments. The company’s business filings later revealed it recouped more than 80 percent of deferrals by the end of 2020 and was on track to collect the rest in 2021. Despite pandemic-related instability, McDonald’s collected $6.8 billion in rent payments in 2020."

McDonald's Owner/Operators paid millions$ in PPP to corporate?

April 22, 2022

Some Advice to Republicans

"This is how you deal with big corporations that try to throw around their weight and force woke policies on voters and families. You punish them, not just because they deserve it, but also, as Voltaire famously put it, pour encourager les autres" (as an example to others).

Governor DeSantis is right to attack Disney

April 17, 2022

68% Less Likely to do Business with Disney


"As was the case last year with CRT, this is no “freakout.” It’s parents exercising their fundamental rights — indeed, their fundamental responsibilities — as mothers and fathers."

Yes, this link is to a conservative opinion piece but the numbers are shocking. Other brands doing business with Disney should tread carefully, or not at all.

"The Left has once again snuggled up to a dog with fleas"

Will woke Disney go broke? - Patriot Post

Source: https://www.thetrafalgargroup.org/news/nat-issues-disney-business-0410/

April 12, 2022

April 10, 2022

Interest in Plant Based Foods? Not So Much

A little too much celebrity gossip here but apparently even the high-end guys can't make fake meat work.

Veganism ruining NYC chef's career - NY Post

A little too much about Chick-fil-A here but check out the last paragraph. According to a large survey (7K) of teens, the age group is losing interest in plant-based meats.

Your teen probably wants to go to Chick-fil-A 

April 7, 2022

Starbucks Union Campaign Continues Momentum

Labor board - "union election filings were up more than 50 percent during the previous six months versus the same period one year earlier."

Sixteen wins for unions - One for Starbucks

April 2, 2022

Caution - Politics Ahead

This is an eight-minute video of Jesse Waters discussing politics and Disney but he throws out some interesting survey results that will surprise a lot of people. When business owners decide how to spend their precious advertising dollars they should keep in mind that data and statistics provided by their various agencies and word of mouth are likely slanted or just inaccurate. 

Jesse Watters Primetime - Fox News

April 1, 2022

The Mouse House is No Fantasyland

The damage at Disney just keeps getting worse - Florida TV

Is time running out on Disney CEO? - Motley Fool

Can there be any dumber management move than to let a militant group of employees determine a company's political positions and activities?

We don't discuss investments here but this uproar has got to make DIS shareholders pretty nervous. Who else should be nervous? ... Unrelated brands who co-promote and do tie-ins with Disney.

March 28, 2022

Will Disney Survive Wokeness?


HB 1557 is meant to protect children. How can Disney be against children?

From Disney's Twitter feed:


March 23, 2022

McPlant Not Passing McTest

 

Amazing. This analyst's research finds the same level of McPlant sales that this website and visitors to this website have been predicting for several years.

McPlant test said to be off to a tepid start

March 19, 2022

The End of McDonald's in Russia

Russia invaded Ukraine on February 24. American companies scrambled to react. On March 8, McDonald's announced all stores in Russia and Ukraine would be "temporarily" closed. The announcement included language such as, "At the same time, our values mean we cannot ignore the needless human suffering unfolding in Ukraine. " and " We will also closely monitor the humanitarian situation."

Vladimir Putin expected the Ukrainian takeover to take a few days. McDonald's management was probably thinking in weeks or months.

Twelve days ago, this looked like a military matter, but it's now evident that Putin intends to exterminate as many Ukrainian people as possible. Few of us were around for World War Two, but the images coming out of Eastern Europe certainly look like the documentaries and movies we've viewed all our lives.

On March 8, Putin wasn't being called a war criminal; today, he is. Twelve days ago, Putin wasn't being compared to Adolf Hitler; today, he is. The civilized world has turned against him. That escalated quickly.

If the Putin government survives the year, Russia will be an impossible place to do business. Prominent symbols of Americana like McDonald's will be vilified by the government and permanently driven out of the country. If Putin loses his grip on power, there's no way to tell who will be in charge, and there's a chance of a Russian civil war. 

Once all McDonald's stores in Russia are closed, they won't be reopening. 

Fox News commentator Geraldo Rivera recently said, "In three weeks Putin destroyed modern Russia."

It would be impossible for McDonald's to resume operations in a nation as it reverts to the dark ages.

.

March 17, 2022

Close My Russian McDonalds? Nyet!

One of the first questions a franchise owner would ask if someone ordered them to close up shop would be "what about my inventory?" It looks like some stores found the answer, stay open until you're out of product. The distribution centers in Siberia, some eleven time zones from Moscow, must have a substantial amount of product to liquidate.

March 12, 2022

Who's Fueling Who at Your Drive-thru?


Two Wall Street Journal articles:

Biden's War on Oil Hits Consumers

Democrats for Higher Gas Prices

I believe the first article is a freebee and the second is behind their paywall. I say - I believe - because I'm a subscriber and my devices are loaded with WSJ cookies, so I don't know what you see when you try to log on. You might see other offers to subscribe. The WSJ is phenomenal and worth every penny of their subscription price(s), if you use it. I try not to push visitors to subscription websites. But more and more people on the internet want to be paid for their work.

March 11, 2022

Is it Time to Move Away from FAFH?

Customers ready to cut restaurant spending if prices keep climbing

Putin to Take Over American Companies?

"Of particular concern are Western companies that once symbolized post-Soviet Russia’s integration into the world economy, like McDonald’s and Ikea, that have now shuttered hundreds of stores and factories. Mr. Putin told officials in the televised meeting that the assets of such companies should be put under “external management” and then transferred “to those who want to work.”

New York Times - Putin Talks of Nationalizing Western Companies

March 9, 2022

Companies Should Take Social Media With a Grain of Salt

I hope these companies who are closing operations in Russia and Ukraine are not really doing it because of Twitter or threats of boycotts. Social media is not "listening to our customers", it's not a focuse group or consumer surveys. It's just a bunch of people messing around on the internet. The business press has kind of blended with social media and can base entire articles on a few tweets or hashtags. Best we all ignore it.

McDonald's to close its Russia locations - after huge social media pressure

March 8, 2022

McDonald's Closes Stores in Russia

If this is being done because it's impossible to operate because of supplies and logistics, it's the right thing to do. If it's being done as a way to put political pressure on the Russian government, it's a huge mistake.

McDonald's to temporally close 850 stores in Russia 

March 5, 2022

Actions by Companies Concerning Russia


As we discussed, if you close stores they may never open again. Russia is not the USA. Franchise agreements and store leases mean nothing in a communist country. Stick with helping with the humanitarian crisis. Stay out of the politics.

Chains and food producers stay open in Russia/Ukraine

Here's an article listing companies that have taken action against Russia. Notice very few have brick-and-mortar locations that they intend to close. The Russian people love American food. One sure way to change that would be to close locations, putting thousands of their countrymen out of work.

Yahoo - Companies that have taken action against Russia

March 4, 2022

Don't Get Involved in International Politics!

It's one thing to stop shipping products into Russia. It's another thing to close locations. Given the politics in Russia, if a company closes locations to protest the war, they may never open again. 847 stores? That's a big chunk of MCD earnings!

Russian people love American products and culture. Don't screw that up.

Stay out of it!

NY pension chief says McDonald's, PepsiCo should consider Russia risk (yahoo.com)

March 2, 2022

Can Beyond Meat Get Its Sizzle Back?

Sure they can. Once they announce that McDonald's is taking McPlant nationwide BYND shares will spike and many shareholders will take their profits. After that the typical McDonald's store will sell 10 - 15 a day and no one will notice when McPlant disappears from the menu.

Beyond Meat supermarket sales down 20%. It's nice when the average consumer does your market research - Motley Fool

CNBC.com coverage with more data

February 26, 2022

Senator Bernie Sanders Rips MCD for "Corporate Greed"

It's understandable that a socialist democrat like Bernie Sanders wouldn't understand a business model but it's too bad Fortune didn't include a few sentences explaining how pricing works in a franchised system.

Complains about huge profits and price hikes

February 22, 2022

Former McDonald's Suit Moves to Burger King

According to Paulo Pena's Linkedin profile he worked for McDonalds for two years (2017-2019) and was in charge of all McOpCos in the USA. 

How could a person, so new to the company, be in charge of 800 restaurants? 

Answer: He has a Harvard MBA, so he walks on water. But who was in charge of McDonald's USA when such decisions were made? Of course...another Harvard MBA.

Burger King franchisee names Paulo Pena CEO

February 20, 2022

Carl Ichan Nominates Two New MCD Directors

Nominates two members amid a dispute with the company over its treatment of pigs.

MCD Board of Directors responds

K.I.S.S.

Keeping a simplified menu is going to be something of a tug of war between McDonald's Owner/Operators and McDonald's management. There will be three forces pressuring management to slowly return to a more complicated menu and operation.

1) Investors and analysts - If management doesn't produce a stream of new products, they will be accused of not having an "Innovation pipeline". If the company ever returns to having in-person "analysts' days" the guests will expect to be fed exciting new products from that pipeline.

Investors will give a simplified menu lip service, but they don't understand what it means and will reflexively push for menu creep. 

2) Industry media - Reporters need content and clicks so they will write about any new product news they can find. They will constantly bug corporate about new products. I'm amazed how much press Shamrock Shakes are getting. Can a 40-year-old product be new product news?

But the Chicago office will contribute to this pressure from the media by cranking out press releases about new products, especially when they need positive press.

3) Social media - "Listening to our customers" is an oft-used phrase. Unfortunately, sometimes that means a marketing person spending an hour on Twitter and Tick Tock. A few comments from a few people (McDonald's customers or not McDonald's customers) and "the Internet is on fire" with people demanding fake meat or ADB.

Exactly how this tug of war takes place will depend on same-store sales. If sales stay positive in the USA there will only be muted cries for new products. If sales go soft or McDonald's USA falls behind the competition the outside pressure on management will be substantial. And, with so little real restaurant experience in Chicago, it's likely management will easily yield to the pressure.

Only Owner/Operators can prevent menu creep.

.

February 14, 2022

DoorDash and McDonald's

DoorDash and McDonald's - New Commision Rates

Speaking as a consumer: having done business with both of these firms - Uber seems to be very selective in choosing their employees. It seems DoorDash will hire anyone (and those people will steal your stuff).

Maze on Menu Price Inflation

 But grocery prices are soaring, too.

February 3, 2022

QSRs Take a Risk with Celebrity Endorsements

 








Franchise Times - Celebrity Circus

Coming to a Blue State Near You

California advances fast-food bill - Restaurant Business

Passage of the act brought cheers from organized labor, particularly the Service Employees International Union (SEIU), which is widely cited as the bill's author.  

“Imagine cooks, cashiers and janitors sitting around the table with owners, franchisees and government officials to set fair standards for pay, hours and working conditions across California’s entire fast food industry,” Mary Kay Henry, president of the Service Employees International Union (SEIU), said in a statement. “It’s an absolute game-changer for reducing income inequality and how we treat fast-food workers in this state.”

January 31, 2022

We Got a Great Big Convoy, Eh?



Canadians suffer under a dictatorial pajama boy they call Prime Minister who offered a description of this past weekend's protestors.

It's almost word for word what a franchised company CEO tells their investors when faced with any kind of franchisee uprising.

"The small fringe minority of people who are on their way to Ottawa or are holding unacceptable views that they are expressing do not represent the views of Canadians who have been there for each other," Trudeau said.

Sound familiar?











January 22, 2022

Expansion of McPlant

Please stop calling this a "test". It's a done deal. There are too many direct and indirect connections between McDonald's Corp. and Beyond Meat not to think this is inevitable. 

People moving from major suppliers like Tyson to manage the McPlant program? How many other line employees have moved back and forth between McDonald's and Beyond Meat?

Beyond Meat (BYND) shares are doing poorly and they need to fool their shareholders into thinking a national rollout with McDonald's will move millions of pounds of product through their system.

It won't, but by then the original speculators in fake meat will be gone with their profits. All driven by McDonald's Owner/Operators funding an OPNAD campaign. McDonald's advertising dollars used to spike the price of another company's share price. Who-da-thunk it.

Nation's Restaurant News reports HERE

January 19, 2022

Best Anonymous Comment For 2022

If the New Year finds you behind on your reading, please don't miss the anonymous Owner/Operator comment we posted on January 3rd. 

And make a comment!

You can catch up on your reading HERE

January 17, 2022

Hopper Speaks

While an enjoyable family movie, A Bug's Life ( Pixar - 1998) contains many life lessons. I've always thought this rant by Hopper (voiced by Kevin Spacey) describes the franchisor / franchisee relationship perfectly.



Who's in Charge of McDonald's "Culture"?

 If you're a McDonald's Owner/Operator you'll need to suppress your gag reflex when you come across the recent Wall Street Journal interview with the McDonald's CEO. Reporters rarely get a one-on-one interview with a big company CEO so the result ends up sounding pretty soft ball.

The interview is behind the WSJ paywall, but Fox Business touched on some high points including a video interview with former McDonald's exec Ed Rensi.

The pull quote in the interview is when McCEO says, "The CEO does set the culture and others are going to pick up on what you choose to focus on".

That may be what his B-school professors told him but that's just not true in a franchise system. With franchisees involved the culture ends up being a mix of how the franchisees perform and behave with some small input from corporate management.

The founders of a franchise system certainly determine the culture in the early years but as time goes by and the founders fade away the franchisees have more and more influence on the system's culture. CEOs come and go, and they have little to do with the culture. Especially if they have no system history and are focused on reinventing the brand.

The Fox Business web article is HERE