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.

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

Tough Week for McDonald's ...

... and it's only Tuesday - GuruFocus

How Does the $20 Million Man Rate?

Restaurant CEO Pay - Restaurant Business

More Trump at McDonald's

Eight minutes of generally unseen video of POTUS 47 at McDonald's

Analysts on McCrispy Strips

Strips haven't provided much of a traffic bump - NRN

Analysts's cooment on MCD in general - TheStreet

Michael Gonda Runs From McDonald's

Going to work for sportswear giant Nike - PR Wire 

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.

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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.

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Some Hardee's are Breakfast and Lunch Only

Closing at 2PM sounds crazy, but a little hour-by-hour analysis can't hurt

CosMc's Failure to Launch

McDonald's is closing its concept CosMc’s restaurants.

Mc-Deja Vu All Over Again

McDonald's USA going late night (again)

McDonald's Exiting Chicago?

         

          CBS News reports - Chicago    

Keeping MCD Shareholders Happy

McDonald's announces quarterly cash dividend

Investors Lose Patience With Krispy Kreme

Shareholders of DNUT file lawsuit over delay in MCD partnership

 

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

Saudi Arabia Lures Trump With McDonald's

His own portable MCD store greeted him at the airport - Daily Beast

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.

The other kind of testing is when the CEO or BOD decides they have superior knowledge and judgment and launch a "test" with a predetermined outcome.

CosMc's is such a "test." Owners/Operators will never get the real numbers or the real results. Owners/Operators' money will pay for the growth of CosMc's, and the return will be the same as from the McCafe grocery store retail line.

QSR Magazine - MCD testing CosMc's in existing restaurants

Even McDonald's Can't Save Krispy

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

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.

Who Ya Gonna' Blame?

In an uncertain economy, McDonald's sees sales decline - NYT

MCD Frist Quarter2025 Results

MCD USA Sales off 3.6 % -Yahoo Finance

Jack In the Box Changing Everything - Again

Ever since they were purchased by a dog food company in 1966 (Ralston Purina - Sold 1985) JIB has been a broken company - QSR mag

Minecraft Digging McDonald's Out

                  McDonald's gets tailwind from Minecraft Meals - NRN

Chili's Take Swing atMcDonald's

 Chili's goes after MCD again with QP burger - RestBusi

No Way To Have It

           

57 unit Burger King franchisee declares bankruptcy

                                             

 

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

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.

 

Last Minute Tax Checklist

Courtesy of Quick and Associates - Tucson

Chick-fil-A Pushing to $10 Mllion AUV

 According to their latest FDD (Franchise Disclosure Document)

A QSR CEO Bits the Dust

YUM CEO to retire - Restaurant Business

 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".

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."

In-N- Out Gets a Little Political

 

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.

Review of McHistory

How the Filet-O-Fish came to be

Who's Got a Beef?

Grass-fed beef? Not so great - people who call themselves scientists

Restaurants worried about beef inflation - RestBusiness

In other words, people who don't want us to eat meat have screwed up the entire beef industry.

Honest Discussion About DEI

Anheuser-Bush has learned their lesson - former AB exec 

Starbucks Unveils New Store Design

 

Starbucks CEO wants everyone to know the “third place” is alive and well.

Just the Beginning

RFK Jr. tells food companies to remove artificial dyes

How Many Times Can He Rearrange the Deck Chairs?

Is this the new pit crew for Accelerating the Arches?

Does Chris K. have to actually appear in his videos?

MCD Shares Jump $10 plus to Record High

 

Krispy Kreme Depending on Glazed

On track to reach about 6.000 McDonald's locations by year end.

Can McDonald's Corporate Handle AI?

 Big Mac AI Revolution Set to Help McDonald’s

This a summary of an article from the Wall Street Journal, March 5. 2025.

Taco Bell Off to a Strong 2025 Start

Q1 SSS expected to be up 8% - RestBus

Taco Bell to speed menu innovation - NRN

Marion Gross Retiring From McDonald's

Supply chain chief has 32 years with the system - NRN

Steak 'n Shake Beefs Up Fries

Steak 'n Shake turns to beef tallow - Maze

The company's fries will be "RFK'd".

Revolt at Subway

Latest Footlong offer draws franchisee ire - RestBus

Is All the Young Talent Leaving McDonald's?

Eugene Lee, International Chief Marketing Officer, leaving McDonald's

Eugene's Linkedin page

Macca's CEO to Spend More Time With Family

 McDonald’s Australia CEO Antoni Martinez resigns

Maze On the History of the Egg McMuffin

 

The 50th anniversary 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.

More McDeck Chairs

McDonald's losing more people with word salad job titles - MCD PR

"Retiring" in his mid-50s after only six years with MCD?

Starbucks Laying off 1,100 People

Attempting to "simplify" what happens in coffeehouses - NRN

These Days - Everything Bad Starts in California

More on the duel between the fast food industry and labor unions

Unions will never give up on "Joint Employer". 

California op/ed by Dan Walters

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.

Many CEOs Still Have Their Pay Tied to DEI

McDonald’s annual incentive plan continues to hold the CEO and senior executive officers accountable for efforts that drive employee engagement and values, including inclusion. - Fortune

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

Some Comments From MCD Analyst Call - Maze

"The overall market is pretty muted" - MCD CEO

What Are the Plans for Your Brand?

MCD analyst conference call transcript - 2024 results - Motley Fool

CNBC on McDonald's Results - Video

Analyst David Palmer has been covering MCD for years and is usually a big fan - interesting discussion

MCD Managment Claims an Increase in USA Traffic

Is that possible along with a decrease in same-store sales?

U.S. McDonald's Customers Spend Less Per Visit in Q4

 USA SSS a full one percent below what Wall Street was expecting

SSS down -1.4%. Analysts expected to be down - .41%

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 ago. We'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.

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

 

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/

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.

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.

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.

Tariq Hassan Leaving McDonald's Corp.

Maybe he got tired of implementing 40-year-old discounting plans

$117 Million Aint Beans

Starbucks paid two CEOS $117 million last year

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.

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Elon and Vivek Make the Whitehouse Great Again

Ask if they can make a blanket fort in the Lincoln Bedroom

A Little Less McWoke

Target COO retiring after nine years on McDonald's BOD.

MarketScreener.com

Mulligan was running Target when the company featured clothing and accessories for children who thought they were "trans" and also promoted the idea of Men being welcome in Target's Women's restrooms.

Where's the Beef? Maybe in the Fryer

Steak 'n Shake (and others) converting to beef tallow for cooking fries

Papa John's: Eliminating Local Co-Ops a "big miss"

National marketing is more efficient - until it isn't: Maze

OPNAD once made a lot of sense; now it just centralizes $$$ and power in Chicago

 

More Than You Want to Know About Gavin Newsome

No, really, why is Gavin Newsome, Governor of California? - Opinion

Are There Too Many McDonald's?

One big reason for 2024's closures: Too many restaurants - Maze

A Reason Some Men Don't Wear Ties

 

McDonald's Closes Three Cosmc's

It's a story that repeats itself every 15 or 20 years. McDonald's executives (with no restaurant experience or knowledge) desperately want to be considered "restauranteurs." With other people's money and tons of excess real estate, they make a lot of mistakes.

MCD closes 3 Cosmc's - Restaurant Business Mag

McDonald's Wrestles With Sales

 

This is a nice change. Too often, McDonald's headquarters gets enamored with "artists" who do nothing but scream obscenities and lead PDiddy lifestyles. Cena appears to be the opposite.

John Cena pitches McDonald's McValue Menu

McDonald's Says Bye to DEI?

McDonald's will still be a Woke, DEI, Politically Correct company because of recent hires and the pajama boys at the top

McDonald's Real Estate, Part Deux

Our real estate discussion has gotten a little off track since we can't change the long-standing McDonald's Owner/Operator facility ownership policy. I intended to discuss modern McDonald's real estate as it applies to the McDonald's franchise. There are things happening today that were unthinkable 20 years ago.

For instance, a McDonald's in western Michigan just closed, yet according to satellite photos, it looks like a contemporary facility. Someone spent a lot of money developing and improving this store, yet the Owner/Operator had to walk away. Is this happening more frequently?

Stevensville MI is directly across the lake from Chicagoland

This is why it's a good idea to know the real estate status of each of your stores.

But as long as the history of Owner/Operator capital investments has been mentioned ... there's little fruit in comparing what McDonald's policies were in the early years and their motives today.

When it came time convert the red and white buildings to 1970s designs McDonald's was a public company but not rich. Having the money to grow and also remodel wasn't in the budget. However, the remodels, especially the addition of seating, brought huge sales increases, and management felt the operators could pay for some or all of the remodel. Adding drive-thrus brought a further sales boost, and the idea that Operators would pay for remodels became a permanent policy.

The idea that Owner/Operators should pay for "system image" was not discussed. It was all about sales increases, as were the original "Newman Deals".

So comparing corporate policy and motivations today to the first twenty years doesn't accomplish much; these are two different companies: the first, essentially a start-up, today an international money machine run by corporate raiders.

McDonald's Real Estate

 

During his outstanding presentation on the December '24 NOA webcast, Attorney Robert Zarco reminded us that McDonald's is essentially a real estate company that sells hamburgers. He made many recommendations that assume McDonald's Owner/Operators thoroughly know the real estate status of each of their restaurants.

Is that the case, or are Owner/Operators just relying on verbal representations from McDonald's corporate employees?

A little history: When Ray Kroc founded McDonald's, the Owner/Operator was usually responsible for providing the land and building.

As the company grew, the corporation provided facilities, and the real estate became a part of the franchise relationship.

When McDonald's selected a site, one of the criteria was that there would be a McDonald's at that location in perpetuity.

A purchase was always best; if a lease, there would be substantial options.

This long term mentality enhanced McDonald's portfolio and also allowed Owner/Operators to build equity.

But despite its reputation, perpetuity isn't forever. Under the new corporate management, real estate thinking might have changed. But, since everyone of the 14,000 USA locations are different, it would be difficult to identify any trends.

Is this an issue that Owner/Opertors should be discussing? 

Or is it no big deal?

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