Posted on 07/16/2015 9:42:45 AM PDT by SeekAndFind
McDonald's franchisees are terrified for the future of the company, according to a new survey.
The operators' six-month outlook for McDonald's business is the worst in the 12-year history of the survey, which was conducted by former Janney Capital Markets analyst Mark Kalinowski.
"At least half of the operators in my region are on the verge of collapse," one franchisee wrote in response to the survey. "With minimum wage for fast food workers potential increasing to incredibly high levels, we are facing a crisis situation.
Another said: "The operators sit on a cliff right now. With sales going in the wrong direction, all must be conservative in our decisions. It will take only one bad decision to put any operator down and out."
McDonald's same-store sales have declined for the past six straight quarters in the US. The company is battling falling traffic, increasing competition from fast-casual chains like Chipotle and Panera, and an eroded brand perception among American consumers.
For the survey, Kalinowski interviewed 29 franchisees who own and operate 208 restaurants in the US. McDonald's said that represents only a fraction of their franchisees.
"Approximately 3,100 franchisees own and operate McDonald’s restaurants across the US," McDonald's spokeswoman Lisa McComb told us. "Less than 1% of them were surveyed for this report. We value the feedback from our franchisees and have a solid working relationship with them.”
Operators said in the survey that they are squeezed for cash due to high rent, remodeling costs, and new equipment.
(Excerpt) Read more at businessinsider.com ...
Regarding rent and remodeling costs, from what I have heard, McDonald’s corporate owns the land and building for almost all locations, and rents those locations to the franchise. So if there is a squeeze on rent and building costs, the squeeze is being applied from their own corporation.
And it seems franchising has ups and downs. These business owners benefit from a universally known brand, but find themselves compelled to do things such as all day breakfast that they wouldn’t do if they were in complete control of their business.
The new lemonade and the lobster sandwich are excellent.
What and do away with the mystery bag handed to you with half of what you ordered in it and no napkins or sauces, sheesh, that's half the fun.
I used to go to MacDonalds and order the only thing on their menu that I really liked - their most expensive hamburger, plus a regular fries and a small drink.
One day I walked into a local MacDonalds and was advised that the “Expensive Hamburger” was no longer on the menu.
No idea why. Management decision. All stores.
Bye-bye MacDonalds.
My two cents - There are way too many items on the menu. Keep it simple might be a good guiding principle even for a fast food business.
Around Oklahoma though - the McD’s coffee is sometimes good, but why go to McD for breakfast or lunch when you have a Braums nearby? I could almost believe the real reason Obama is in OK right now is to sneak off to eat a hamburger and get a malt at a Braums.
I grew in a rural area of Alabama that had four significant towns, and in 1977 when I left....there were two total McDonalds there in the region. Today, if you draw a 20-mile circle around my old house....there’s roughly eight McDonalds.
As a teen, it was a special deal to go over to McDonalds and in that last year there....I probably ate there six times in one year.
I think people got to some point around a decade ago where burgers were becoming dull, and started shopping around. In the past twelve months...I’ve been in McDonalds a total of twice. There’s nothing that really draws me there...except a quick burger, period.
I’ve noticed more and more coupons going out, the people that do use these....are cutting into the profits of the individual franchise operation. The corporate guys think the coupons are helping....it’s actually the opposite case.
What am I missing?”
A Chic-a-Filet?
Right. There are now a zillion burger places every one better than McDonalds.
No, McD’s doesn’t own the land. They do approve a set of locations. Which probably works against the franchisees since anybody that owns land that’s been “McD’s approved” knows they have good land and it’s time to jack up the rent.
Not only that, McDonald’s has been greasing the liberal social skids for years now, and it finally came back to bite them.
Better news, Chick-fil-A is opening a new restaurant just down the road from me. I know where I’m going.
The quality of their food doesn’t seem to be in the forefront.
Exactly! Why McD when there is CFA? No brainer.
Small coffee and sausage muffin without the “egg” is all I ever get.
Plus the fact that for just about every menu item the competition is better. Compare a McDonalds burger to Wendy’s, Steak-n-Shake, Five Guys, Hardee’s or anywhere else
Or Checkers, or Red Robin, or Sonic, or ... Fact is, it’s not PC menus or any of that. There are simply too many places now that offer a better takeout menu than McD (or Burger King) for the same or not much more money. Competition, yo.
Please bring back the fries from the late sixties. When they changed that formula it has been downhill.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.