Coalition of Franchisee Associations

November 16, 2023

Is Fast Food's Model Broken?

These bankruptcy stories are interesting because they are usually about large franchisees, and these large franchisees often operate multiple brands of restaurants or other businesses.

As I’ve said ad nauseam, one of the reasons McDonald’s grew to be the industry leader is the fact that, as soon as they could afford it, the founders focused on smaller one, two, and three store Operators. While recent managements have drifted away from this approach, the McDonald’s structure is still an advantage over these competitors with less disciplined approaches to franchising. 

When a big franchisee gets in trouble, there are fewer options than a smaller operator. How does a 100-store franchisee find a buyer? Typically, the corporate side doesn't have the cash to bail them out. Gone are the days when corporate was eager to grow their number of company stores by buying out franchisees.

Now that McDonald’s is favoring larger Owner/Operators, when will they allow McDonald’s franchisees to own franchises in other chains?

Fast Company studies recent bankruptcies in the QSR industry

1 comment:

Anonymous said...

MCD will allow franchise owners to own other brands when it becomes apparent that only multi brand franchisees can weather the tsunami of rising costs, many foisted on them by MCD itself.

When only they can pay for the latest shiny objects that young marketing execs dream up as the next big thing (i.e. what will win me an award omn my way to a bigger job somewhere else), you will see mega franchisees adding McDOnalds franchises to their portfolios.

Its no longer about the McFamily.