“American consumers take their burgers seriously"
.
September 15, 2009
September 12, 2009
To OPNAD or not to OPNAD
As McDonald's Owner/Operators stew over signing their next OPNAD
pledge card they should note the fine print at the top of the automatic
debit signature card:
"Participation in OPNAD and PAL$-OPNAD is voluntary"
Also, as you provide feedback to your OPNAD and Co-Op reps keep in
mind that the past five months have proven without a doubt that
McCafe advertising does not build sales. How many hundreds of
millions of voluntary contributions will be spent trying to change
the tastes of McDonald's customers?
And, a lot of your money is about to be used experimenting with
internet advertising and social media. "Experimenting" because unlike
TV and radio there are no "experts" in this field as it's so new and
ever changing. There are certainly thousands of technical and advert -
ising people out there eager to spend your money but none of them
really have any experience or know anything. Because it's my job I
think I know more about the internet and its uses than 99% of Owner/
Operators and I suggest you go very slow in this area. Again, it's a
huge experiment - nothing else - yet.
The past five months have proven that spending an advertising
budget equivalent to the GNP of Canada does not guarantee a sales
increase if you're advertising the wrong products.
With McCafe and social media USA Owner/Operators could waste half
of their advertising contributions in 2010.
And then be forced into more discounting to build sales.
.
pledge card they should note the fine print at the top of the automatic
debit signature card:
"Participation in OPNAD and PAL$-OPNAD is voluntary"
Also, as you provide feedback to your OPNAD and Co-Op reps keep in
mind that the past five months have proven without a doubt that
McCafe advertising does not build sales. How many hundreds of
millions of voluntary contributions will be spent trying to change
the tastes of McDonald's customers?
And, a lot of your money is about to be used experimenting with
internet advertising and social media. "Experimenting" because unlike
TV and radio there are no "experts" in this field as it's so new and
ever changing. There are certainly thousands of technical and advert -
ising people out there eager to spend your money but none of them
really have any experience or know anything. Because it's my job I
think I know more about the internet and its uses than 99% of Owner/
Operators and I suggest you go very slow in this area. Again, it's a
huge experiment - nothing else - yet.
The past five months have proven that spending an advertising
budget equivalent to the GNP of Canada does not guarantee a sales
increase if you're advertising the wrong products.
With McCafe and social media USA Owner/Operators could waste half
of their advertising contributions in 2010.
And then be forced into more discounting to build sales.
.
August 29, 2009
There Goes the Rest of Your Equity!
We're hearing more talk
about reimaging older
stores to the "Eyebrow"
look when rewriting
franchises in buildings
less than 20 years old.
I drove extensively around the Midwest in
August saw many McDonald's stores of varying
types. It's impossible to believe that the
eyebrow look is a sales builder vs. the roof
beams.
If fact, when traveling the freeways one can't
depend on the freeway sign to locate the actual
McDonald's. The roof beams do that job much
better than a bland brick box.
(The picture above is a remodel to the eyebrow
look with the mansard trusses left intact.)
.
August 25, 2009
August 20, 2009
Speaking of McDonald's Real Estate
Accountant Richard Sparkmon has posted an interesting article
on his website recommending "Items to consider when buying a
restaurant". One of the items listed is:
"If the real estate is not owned by McDonald’s Corporation,
verify the terms of the lease and ownership of the land."
That's good advice but I'd take this a step further. There was
a time when the McDonald's real-estate business was pretty easy
to figure out, a site was either owned by McDonald's Corp. or
it was leased from a completely separate third party.
Because of the nefarious real estate dealings of today's McDonald's
through the use of secretive entities and the company's ability to
manipulate ownerships with zero transparency the buyer of a
McDonald's franchise needs to do more legwork than in the past.
This is too complicated to describe in a short blog post but
there two things a buyer should tackle:
A) Do a study of the sites at the local governmental agency
responsible for recording deeds and property titles. Study the
current ownership as well as recent transfers of ownership for
the subject parcel(s).
B) Do not rely on the McDonald's real estate files or the
oral representations of any McDonald's employee (at any level).
Taking these measures when buying a store or two should be
pretty light work. If you are acquiring a large package of
stores you'd be really smart to hire a local real estate
attorney to develop a profile on each site.
Here's a link to the Sparkmon article:
.
on his website recommending "Items to consider when buying a
restaurant". One of the items listed is:
"If the real estate is not owned by McDonald’s Corporation,
verify the terms of the lease and ownership of the land."
That's good advice but I'd take this a step further. There was
a time when the McDonald's real-estate business was pretty easy
to figure out, a site was either owned by McDonald's Corp. or
it was leased from a completely separate third party.
Because of the nefarious real estate dealings of today's McDonald's
through the use of secretive entities and the company's ability to
manipulate ownerships with zero transparency the buyer of a
McDonald's franchise needs to do more legwork than in the past.
This is too complicated to describe in a short blog post but
there two things a buyer should tackle:
A) Do a study of the sites at the local governmental agency
responsible for recording deeds and property titles. Study the
current ownership as well as recent transfers of ownership for
the subject parcel(s).
B) Do not rely on the McDonald's real estate files or the
oral representations of any McDonald's employee (at any level).
Taking these measures when buying a store or two should be
pretty light work. If you are acquiring a large package of
stores you'd be really smart to hire a local real estate
attorney to develop a profile on each site.
Here's a link to the Sparkmon article:
.
August 2, 2009
July 17, 2009
Got Another $150K Per Store?
I get the sense that the Wall Street types
know more than the "Bridge Operating Platform",
the replacement for the MFY kitchens, than
domestic McDonald's Owner/Operators.
The analysts ask about it all the time and
this firm even mentions it in their latest
report - Wedbush Morgan coverage is HERE
.
know more than the "Bridge Operating Platform",
the replacement for the MFY kitchens, than
domestic McDonald's Owner/Operators.
The analysts ask about it all the time and
this firm even mentions it in their latest
report - Wedbush Morgan coverage is HERE
.
July 15, 2009
You Know More Than You Think
When discussing the prospect of communicating
with Wall Street investors franchisees often
express a concern about not feeling know -
ledgeable about the inner workings of the
stock market.
I've been working with Wall Street analysts
for a decade and a half and have rarely
discussed share prices or the securities
business.
I've made it my practice to never express
opinions on the relative value of a company
or make projections on any share price. That's
not what the analysts are seeking. They're
interested in what franchisees running real
stores think about happenings in their
system.
Analysts don't expect you to understand their
side of the business They're interested in
what you think about your business.
_
with Wall Street investors franchisees often
express a concern about not feeling know -
ledgeable about the inner workings of the
stock market.
I've been working with Wall Street analysts
for a decade and a half and have rarely
discussed share prices or the securities
business.
I've made it my practice to never express
opinions on the relative value of a company
or make projections on any share price. That's
not what the analysts are seeking. They're
interested in what franchisees running real
stores think about happenings in their
system.
Analysts don't expect you to understand their
side of the business They're interested in
what you think about your business.
_