August 14, 2025

Top Notch Commercial !!!



Congratulations to whoever put together the new McDonaldand commercials. The graphic quality is terrific. I first noticed it as a small image on my phone but the quality also shows up on broadcast television.

It's great to see Ronald back on the job.

August 13, 2025

Eroding Your Equity

* The only thing that gives your franchise business any resale value is the stability of the franchise agreement.

* If you sell a franchise agreement that has  XX years left to run, your buyer must be sure that that agreement won't be changed or "renegotiated".

* In any contract renegotiations, there is a winner and a loser, and with a powerful franchise company, the corporation always wins. 

* Anytime a franchisee is asked to change the terms or the application of those terms, they are damaging the future value of that franchise.

* A franchise agreement that's constantly changing and renegotiated eventually becomes worthless.
.

August 10, 2025

Price Fixing?

Once upon a time, McDonald's Corp. was concerned with the legality of dictating menu prices to franchisees. To the point that direction came down from corporate legal that company (MCD) employees should not be involved in menu price discussions with franchisees. Legal said that, if, in a Co-Op meeting, franchisees were discussing a menu price promotion, the MCD employees should leave the meeting.

Of course, this was widely ignored in the field. It was especially impractical because at the time, something  like 20% of USA stores were operated by McOpCo. Deep discounting made a major dent in corporate profits.

August 4, 2025

What's in the McNews?

If one owns a franchise granted by a publicly held company, you can gain a better understanding of where the company is going by paying attention to what management tells their shareholders, by way of their communications with Wall Street analysts.

On Wednesday, Aug 6, McDonald's management will release Q2-2025 results and conduct a conference call with interested analysts. These calls usually last a little over an hour.

WEBCAST link is here - begins at 8:30 AM EST

MCD earnings - Here's what to expect - Yahoo Finance

August 3, 2025

MCD Among 11 Best Income Stocks to Buy

 McDonald's remains a leading income stock

This photo often appears alongside articles about McDonald's. I haven't worked a McDonald's grill in a while, but I don't think this is how things are done (or ever). It looks more like the factory step before 7-11 cheeseburgers are wrapped in clear plastic.

August 1, 2025

Smaller Isn't Better

Major restaurant chains are always tempted to open smaller locations in an attempt to:

* Avoid impacting successful, traditional locations.

* Developing a smaller market that may not be ready for a full-size facility.

This rarely works. McDonald's attempted to build Mini-Macs in small towns in the early 1970s. Most locations had to be expanded or rebuilt because the volume exceeded expectations. That was a good result, but then there was the SPOD program at the turn of the century.

Starbucks: The end of the seatless coffee shop

July 28, 2025

A Free Copy of the Recent WSJ Article

 How McDonald's Lost Its Value Edge - WSJ/MSN

I rarely post articles from The Wall Street Journal because their firewall is quite expensive. I assume their website membership doesn't include many small businesspeople.  But if we wait a little while, they often allow another publication to run their articles. As is the case with this recent article about McDonald's and Value. If it looks familiar, it's because I posted the original WSJ article a few days ago.

Don't get me wrong, the WSJ is one of the finest publications in the world. If you subscribe and you use it, it's well worth the money. However, you shouldn't join  the WSJ expecting a lot of links to their articles to appear here, because they won't.

NRN on Success of SnackWraps

Snack Wrap likely driving repeat visits

July 25, 2025

What's the Impact on Service Times?

CosMc drinks to be tested in Wisconsin and Colorado - Maze

Why in the world would management continue to use the "CosMc" name? It's already failed in testing and nobody knows what it means or remembers that it was ever part of the McDonaldland platform.

After spending a few billion developing the McCafe brand, why not just make this an extension of that brand? Something like "McCafe Limited (or Unlimited)". Or call it McCafe Plus, or just add " + " sign. It's silly to try to build a new brand name out of nothing.

At least consumers have some connection to McCafe - nobody knows what CosMc is or was.



July 24, 2025

WSJ on Value and Discounting Disputes

Heather Haddon spoke with numerous industry folks about QSR "Value".

Bottom line - the corporate guys always make the franchisees vote until they get it right.

How McDonald's Lost its Value Edge - WSJ

7/28/25 - A free copy of this article is now available at:

WSJ-MCD article on MSN.com

July 17, 2025

Will Snack Wraps Save MCD Third Quarter?

We've discussed how new menu introductions are often intended to impress Wall Street. That's why we're seeing a flood of feel-good news articles about how well Snack Wraps are doing. 

I can see that if sales are going well, running out of a condiment or product "eventually" can happen. However, the supply chain should contain enough product volume so that the restaurants will eventually burn through the inventory, rather than running out at the beginning of the promotion. Unless incompetent personnel were mismanaging the supply chain.

Lettuce speculate that shortages could well be a planned event to create the aura of success in preparation for management's conference call with analysts, scheduled for August 6th. 

The pajama boys and girls seriously need a win. If the endless discounting and snack wraps don't increase traffic, management will have to answer some hard questions.

In other words, snack wraps have to work, even if it's partially McSpin.

Snack Wrap comes out of the gate hot - NRN

Early return on Snack Wraps are apparently good - Maze

Snack Wrap frenzy leaves McDonald's short on lettuce - NBC

More on Tax Bill From Quick & Assoc.

A summary of nine important tax changes that may affect you

July 16, 2025

3 Reasons to Separate Corporate CEO and Chair Positions

Numer One: "..... it is the board of directors that votes to increase executive pay. Accordingly, when the CEO is also the chair, a conflict of interest arises, as the CEO is voting on their own compensation. Although a board probably includes some members who are independent of management (as required by legislation), the chair/CEO can influence the activities of the board, which allows for potential abuse of the chair position."

From: Investopedia- financial-edge 

Egg Prices Continue to Fall

Prices fall for third straight month - Newsnation

July 13, 2025

The Menu Creeps

How big can the McDonald's USA menu get?

Many factors contribute to the growth of McDonald's menu. The top two are:

The business news industry: It's boring trying to write about the restaurant industry. The only interesting hot topics are new products.

Wall Street analysts: An analyst's job is to keep track of the activities of certain companies or entire Industries. That means keeping up with new products or concepts, whether it's automobiles, pharmaceuticals, or farm equipment. It's then the analyst's job to translate these changes into EPS projections.

If a restaurant company fails to impress Wall Street with new products, analysts will report that the headquarters lacks "Menu Innovation." New products are as much to impress Wall Street as they are to attract paying customers.

McDonald's execs believe menu innovation is the key to turning around their sagging sales—so much so that they mentioned it 14 times during their May earnings call. "...There's a steady flow of menu innovation that goes from now through the end of the year in a number of our markets," CEO Chris Kempczinski said. "...Our expectaion is, as we continue to have more menu innovation...it has a positive impact on baseline, which is sort of the gift that keeps on giving."

From: Parade/Yahoo News

July 9, 2025

At the Risk of Seeming Picayune, ...

The metaphor "Three-Legged Stool" is typically used to describe a mutually beneficial relationship, a type of quasi-partnership. At least that was the way Fred Turner used the term.

When the demise of the Krispy Kreme partnership was announced, McDonald's Owner/Operators received a memo from some corporate suits explaining the decision-making process. The three-legged stool was mentioned, but in a non-McDonald's way.

From the memo: "McDonald's continues to be guided by the three-legged stool, and if one leg faces significant challenges, it is our shared responsibility to reassess the best path forward."

In other words, one leg of the stool is dominant over the others and will be the ultimate decider on the fate of the other legs. Now we all know that's how the McDonald's system works, but it's disheartening to see a term that has always been a positive used in such a negative way.

The word for this management style is "Bullying".  

July 6, 2025

Everybody Wants to Buy McDonald's in Israel

It's my guess this article is 95% gossip and/or fabrication, but the last sentence in the following paragraph caught my eye.

"The process of seeking a franchisee is being handled by a local representative on behalf of McDonald’s, who has approached well-known business figures in Israel, in parallel with direct approaches received by McDonald’s Global. Interested parties have signed confidentiality agreements. Among them: Ori Max, owner of Maxstock under Apax Partners; large real-estate and mall groups; and a group of McDonald’s executives who are exploring the formation of a consortium."

Battle for McDonald's franchise in Israel heats up - ynetnews

How to Help Texas Flood Victims

 Salvation Army - Texas

What McDonald's Says About the Economy

McDonald's to hire 375,000 people this summer

That's about 25 employees per store, the spring and summer hiring trend that goes back about 70 years.

However, if McDonald's corporate opens "another 900 U.S. restaurants by 2027" there may be fewer employees per restaurant due to cannibalization.

July 3, 2025

BK Gives Up On Poor Location - McDonald's Says "We're Next"

When you're in a panic to open hundreds of new stores in a few years to impress shareholders, rehabbing a failed Burger King is quick and easy. 

June 24, 2025

Speaking of New Stores

In case you missed it, Anonymous recently posted: 'This is a repeat of the 1990s “Convenience Strategy”, Oak Brook fell on their face trying it back then. And that was when the corporation was staffed with experienced, knowledgeable people.'


We seldom comment about McDonald's mid-management people since a) they aren't in those jobs very long, b) I don't know them or what they actually do in their work.

But this lady is interesting in that she was hired to lead the development of new USA stores. She was hired in 2023, at approximately the same time Accelerating the Arches was announced. In other words, she was put in charge of accelerating McDonald's USA growth, despite having no time with the company.

The opposite of experienced and knowledgeable. Of course, she's now had two years to acquire 70 years of site location experience.

Her corporate profile: mcdonalds.com - leadership

Her Linkedin page: linkedin.com/tabassumzalotrawala

June 13, 2025

Byron Suit Settled

McDonald's settles Byron Allen's $10 billion lawsuit

Give That Site a Second Chance

While we don't know all the details about the aforementioned McDonald's site in Southhaven, MS., it brings back memories of the "Cannibalization Strategy" from the 1990s. In brief, the corporation was eager to build as many stores as possible as quickly as possible. It was not uncommon for the McDonald's real estate department to have taken the position that a particular town or locality was not ready for a new McDonald's store. But, a year later, with no significant changes or population growth, the corporate guys would announce the area was now ready for a new store. Just to get one more in the ground.

We all know how such deals worked out for the Owner/Operator.

June 11, 2025

A McDonald's Rebuild That Took Thirty Years

 

A new McDonald's is planned for the Memphis suburb of Southhaven, Mississippi.
A McDonald's store on this site was opened in 1975 and closed in the mid-1990s, sitting vacant ever since.
It's time to try again with a new store about to break ground at the exact same exact location.

                             A new McDonald's for Southhaven MS
.

June 1, 2025

It's Cannibalization All Over Again

In December of 2023, McDonald’s Corp. announced a goal of operating 50,000 stores worldwide by the end of 2027.

It’s challenging to track exactly what this means for McDonaid’s USA since the announcement combines the USA and IOM.  Some press articles stated that the target for the USA is as low as 600 new stores. Some reporters thought management is targeting 900 or 1,000 for the USA. Six hundred stores are a substantial number, especially considering the current circumstances.


In the year 2023, there was no increase in the number of stores in the USA. In 2024, the count increased by approximately 100 stores. The first-half of 2025 results, to be released in August, should provide valuable insights. 


December 2027 is approaching quickly. It’s two and a half years away, or 30 months. Let’s guess that McDonald’s USA has opened 100 new stores in the first half of 2025. That’s twice the pace of 2024.


The trouble is, if we stick with the 600-store number, it means 100 opened in 2024 and 100 so far in 2025. That leaves 400 stores for McDonald’s USA to open in the next 30 months. That’s a lot for a company that has been in the business of downsizing over the past decade. Can the domestic system handle 600 new stores? 700?1,000?


This is a repeat of the 1990s “Convenience Strategy”, Oak Brook fell on their face trying it back then. And that was when the corporation was staffed with experienced, knowledgeable people.

.

Speaking of Same Store Sales

 When discussing new stores with McDonald’s Owner/Operators, we often get sidetracked by the finances of a particular new store, when the real issue is the cannibalization of the Operator’s existing stores.

Sure, one can argue to get a point or two shaved off a new store’s rent and royalties, but what about that 25% cannibalized from your older stores?


Speaking of sales, if Accelerating the Arches goes forward, you can forget about same-store sales for 5 or 6 years. It’s impossible to increase same-store sales while saturating the market with new stores; Newer, smaller chains can do it, but not at the age of 70.

.

May 15, 2025

 


We answer a visitor question:
Somewhere, along the line, a visitor to this website applied the then-popular term "pajamaboy (Thanks, Obama) to certain members of McDonald's management team.

"Pajama Boy" is a pejorative term for a photograph posted online in 2013 by the American political organization Organizing for Action of one of its employees, Ethan Krupp, in support of the Patient Protection and Affordable Care Act, otherwise known as "Obamacare".
Source: Wikipedia

May 8, 2025

Is CosMc's a Test, Or Just Wasted O/O Money?

There are two kinds of "testing" in the McDonald's system. The first kind involves real testing and evaluation. Fake beef is a good example of real testing.

Even McDonald's Can't Save Krispy




McDonald's and Krispy Kreme will not expand test - NRN

May 5, 2025

Restauranter Transitions to Politician

FOX interviews celebrity chef

Andy Gruel operates a handful of restaurants in Orange County, California, and appears to be one of the young Republicans hoping to save the state.

April 15, 2025

 

Not only is April 15th Tax Day, but it's also the 69th anniversary of the opening of Ray Kroc's first McDonald's store.

McDonald's Manager Deserves an Award

Stops kidnapping in progress at Colorado store

Lawyerly Thoughts

You've probably seen Attorney Jonathan Turley interviewed on TV, but you're wasting half your brain if you're not occasionally reading his stuff.

The following are two articles: one about Starbucks' latest silliness and the other explaining why Harvard graduates can't do math.

Starbucks employees protest immigration policies

Crimson Slide - Math at Harvard

April 13, 2025

Twenty-Five Y/O Rapper Buys McDonald's Franchise?

An alert Owner/ Operator asks, "Is this for real?"

I doubt it. This kid posted a few pictures on Instagram claiming he just bought the McDonald's in the background, and more than a few websites picked it up as news.

Rapper YBN Nahmir buys first McDonald's franchise

If there's any truth to this it's a really bad sign but I don't think McDonald's has yet entered the age of the celebrity Owner/Operator.

 



March 30, 2025

 US VP Vance has a successful trip to Greenland.

McDonald's and the Economy

McDonald's sales could be a bad sign for the economy - MoneyWise 

McDonald's CEO speaks, plans to "reinvent" McDonald's

Pajama Boy says, "McDonald's has lost its way".

March 26, 2025

A Busy Day for Getting at the Numbers

McDonald's McValue Menu appeals to the already loyal - RestBus

90% plus were already loyal to McDonald's

McValue platform has mixed results - NRN

The NRN article covers the same Numerator survey with a different spin

Did McDonald's answer the call for Value Customers? - QSR Mag

This extensive QSR Mag piece includes some word salad rhetoric from MCD management, along with comments from BTIG analyst Peter Saleh:

"Some franchisees, he added, indicated food costs ... had not been this high in six or seven years."

Also, the company claims that in 2024 "franchisees still achieved cash flows north of $500,000 per unit."

March 23, 2025

Franchisees Face Rising Tensions Over "Fees"

Discussion of FTC regs, franchise disclosures, and technology fees - QSR

I'd wager that fewer than one in ten McDonald's franchisees have spent any time with their franchise disclosure document.

February 25, 2025

Maze On the History of the Egg McMuffin

 

Which came first? The drive-thru or the egg?
The Egg McMuffin came along at the beginning of the drive-thru expansion of the mid-1970s.
The sandwich was the perfect "eat while you drive product," as it is today.
Without the Egg McMuffin, drive-thrus would have been a harder sell to Owner/Operators.
Without drive-thrus, eat-in breakfast sales would have been minimal.

February 20, 2025

Burger King Profitability - Maze

Corporate CEOs always lie about franchisee profitability

$2,000,000 profit on $1.6 million in sales? That's 12% profit on extremely low volume?

Another reason BK only has a few company stores.

February 14, 2025

RFK Jr. Sworn in as Trump's health secretary - ABC News

Let us not forget that Kennedy spent most of 2024 running for president as a Democrat. To a Democrat, the answer to everything is more government. He will call for more regulation with every challenge he confronts.

This will conflict with the Trump administration's focus on smaller government. Kennedy's tenure at HHS will be about 18 months.

Kennedy could boost beef tallow demand - Reuters

February 8, 2025

There's Nothing Convenient About Cannibalization

On Monday, February 10th, McDonald's Corp. will announce its historical results for 2024 and the fourth quarter of 2024. McDonald's management has made public commitments for several years regarding the number of new restaurants it plans to open through 2027. One year ago, management promised to open 2,100 new restaurants worldwide in 2024. Did they reach their goal?

Shareholders demand never-ending sales growth from McDonald's. If those sales don't come from same-store sales, they must come from new store openings. Shareholders must be convinced that McDonald's can open an infinite number of new stores.

Unfortunately, the worst series of mistakes in the history of the McDonald's system resulted from building too many new stores too quickly. And that wasn't recently; it was a quarter century agoWe've often discussed the "Convenience Strategy" and published a summary of those events two years ago, HERE > New MCD stores 1995 to 1999

Some of the most serious mistakes made during the "Convenience Strategy" were store hungry Owner/Operators grabbing up new stores with no fear that the store should not be built. The second mistake Operators made was believing corporate assurances about cannibalization.

Some things have changed. Given changes in store economics, McDonald's Corp derives a more significant benefit from moving sales dollars from older stores to newer stores with higher rents and royalties. Another change is, there is no one working for McDonald's Corp. that knows the "Convenience Strategy" even existed or that "Cannibalization" is a real thing.

The fourth quarter of 2024 will tell us a lot about 2025.

February 7, 2025

QSR Magazine Covers the McBases

This QSR Magazine article covers McDonald's research assembled by BTIG analyst Peter Saleh. Peter covers McValue, same-store sales, new-store sales, PACE, new products, etc.

Excellent read. The author is at: 

https://www.linkedin.com/in/dannyklein14/

The verdict is still out on McDonald's latest value rush - QSR mag

From DJT

 


February 5, 2025

Chick-fil-A Successes With Drive-Thru - WSJ

For WSJ subscribers, they've published a comprehensive article on the evolution of Chick's drive-thru.

Inside Chick-fil-A drive-thru by Wall Street Journal

A recap of the WSJ article is published (free) at:

https://retailwire.com/chick-fil-a-drones/

February 3, 2025

Don't Overlook the "Comments"

Over the past few days, we've received many great anonymous comments. If you come here just looking for headlines, you're missing out. Please review the comments for the past ten days or so and make some of your own.

February 2, 2025

Giving Food Away Works on Other Continents, Right?

Even if the accounting and business reporting in India is slightly different, it's obvious what's happening. Same-store sales are up 2.8%, but profits are down significantly. They are giving the 421 stores away to keep shareholders happy with same-store sales.

McDonald's in India reported a profit drop as expenses jumped amid rising store count and promotional spending.

January 28, 2025

We Don't Like This Guy...

Robert Kennedy Jr. is a Zealot. A Zealot is emotional, irrational, and reactionary. Right out of the chute, he started referring to the food he doesn't like as "poison." After you make such an outlandish claim, where do you go? Ban everything; that's where you go. And you don't go about that banning methodically. You disrupt the entire food industry, driving supply down and prices up.

Senate hearings on his Health and Human Services Secretary candidacy begin on Wednesday (1/29). While vaccines and pharmaceuticals will receive most of the attention, if given the chance, he will want to discuss a complete overhaul of our agriculture industry, like a Zealot.


January 22, 2025

Industry Trends

Starbucks to cut some support staff - Maze

When a company can't grow locations and sales fast enough to please shareholders, it has to squeeze operating costs until it hurts.

79 Wahlburgers to close at grocery chain Hy-Vee

Out of 109 existing restaurants.

There's a long list of celebrities failing in the restaurant business gong back to Johnny Carson's attempts to compete with Denny's.



.