Coalition of Franchisee Associations

December 18, 2023

Podcast Discusses McDonald's Attempts at Multi-Branding

Peter Romeo from Restaurant Business discusses McDonald's history with about 95% accuracy. An interesting 12-minute listen.

Why is McDonald's still a single-brand operation, CosMc's aside?

December 10, 2023

Acceleration Can Cause a Wreck

Growth is the magic word in any business, large or small. For most of McDonald’s history, convincing investors of the company’s growth potential was no problem. However, in the late 1990s, McDonald’s management decided to hype the growth potential of the company. Management announced the “Convenience Strategy”. A plan to build thousands of new stores worldwide. An acceleration of 300% over the sensible growth rate of the 1970s and 1980s.

But something went wrong; at least in the United States, there wasn’t room for that many new McDonald’s stores. To compound the problem, the corporate real estate department had a tendency to locate new stores in all the wrong places.

But even when the new stores meet their projected sales volume, much of those sales come from surrounding McDonald’s stores. Cannibalization became the word of the era.

Same-store sales suffered nationally, and Wall Street became very concerned. The question went out, “What’s wrong with McDonald’s?” Management was trapped. They couldn’t admit the truth - that even though the USA only had 10,000 McDonald’s stores, there wasn’t room for all those new stores. After all, this was still supposed to be a growth company. 

The media and Wall Street types begin blaming the food: “American tastes are changing.”

Being trapped, management bought into “the food” problem. Oak Brook staff spent several years bashing McDonald’s food. New store growth was slowed, and the Made For You cooking system was publicly introduced - before it was fully developed. 

The complete implementation of MFY was generally completed by the close of 1999. But, Oops! Management was trapped again. Everywhere MFY was introduced, service slowed to a crawl, lines formed, and same-store sales suffered another hit.

Now management was in an absolute panic, and of course, their only answer was discounting. Oak Brook began to push the concept of a Dollar Menu on Ower/Operators. It took a lot of field meetings and a lot of corporate cash, but the Dollar Menu was introduced in mid-2002 with poor results. The Dollar Menu didn’t catch on with American customers until mid-2003. By that time, Jim Cantalupo was the new CEO, and the domestic McDonald’s system had pretty much recovered from the damage done by the “Convenience Strategy.”

So reckless new store growth in the form of the Convenience Strategy brought Made For You, and Made For You brought the Dollar Menu.

Is McHistory repeating itself?

Wall Street Demands Menu Creep

Recap of last week's announcements - CNN   

                              McDonald's CEO: "Bigger burgers coming"

December 6, 2023

900 New McDonald's USA Stores?

That's faster USA growth than McDonald's had in the 1970s and 1980s.

McDonald’s plans 900 new restaurants in the US by 2027 - Bloomberg

Fine Young Cannibalization

"(In the U.S., McDonald’s) ... operates 13,549 restaurants. But the plan clearly calls for an acceleration of domestic restaurant development. The company plans to open 1,000 new locations, not counting for closures, in its biggest markets annually by 2027."

McDonald's wants 50,000 restaurants by 2027 - Maze

December 4, 2023

United Nations' Battle Against Beef

“They seem to want to go to a plant-based diet or develop meat in a lab using chemicals,” Moline said. “That seems like a bulb that doesn’t light up all the way to me.”

Cowboy State Daily - Wyoming experts say anti-meat push doesn't add up