Posted on 10/21/2015 10:51:48 AM PDT by Kaslin
I saw a sad but not totally unexpected news item from John Hawkins this morning regarding one of America’s premiere dining outlets… McDonald’s. The House That Ronald Built has fallen on hard times, with some estimates indicating that a significant portion of the franchises are currently insolvent or seriously in the red. The dire warnings from franchise owners are including phrases such as, “these are the final days.” (Yahoo News)
McDonald’s franchisees believe the brand is in a “deep depression” and could be facing its “final days,” according to a new survey.
“We are in the throes of a deep depression, and nothing is changing,” one franchisee wrote in response to the survey by Nomura analyst Mark Kalinowski. “Probably 30% of operators are insolvent.”
Another wrote, “The CEO is sowing the seeds of our demise. We are a quick-serve fast-food restaurant, not a fast casual like Five Guys or Chipotle. The system may be facing its final days.”
More than a dozen franchisees expressed frustration with McDonald’s management, saying that CEO Steve Easterbrook’s turnaround plan — which includes initiatives like all-day breakfast and a shift to digital ordering kiosks — is a distraction from the core issues of McDonald’s, like food quality and customer service.
“The lack of consistent leadership from Oak Brook is frightening, we continue to jump from one failed initiative to another,” one franchisee wrote.
We’ve talked about this here before and it’s been a regular feature of financial news headlines. McDonalds has been losing money right and left and they’ve been dumping massive resources into a seemingly endless array of marketing gimmicks as they try to turn their fortunes around. None of it seems to be working, and the reason may be that they’re not addressing the core issue which some of the franchisees are bringing up: the chain strayed away from their original core mission and the strength of their brand in response to social pressures of the day.
Let’s face it… McDonald’s was never meant to be a fancy, high end eatery, nor were they a health food store. It was fast food that tasted good and people were willing to tolerate all the negatives that came with that deal if the price was right. It’s true that costs of beef and some of their toppings have been going up, leading to pressure on them to raise prices, but that’s hardly the only cause for their woes. Everyone in that market sector is dealing with the same problems. No… what really killed McDonald’s market position was selling out to liberal pressure groups.
I think the beginning of the end can be traced back to 2002 when they buckled to pressure from health nuts and changed the oil they used to make their french fries, cutting the dreaded trans-fats. They tinkered with the formula again in 2007 but it was never the same. Are any of you old enough to remember the original McDonald’s fries? Those things were like crack in a cardboard cup. I could eat two large orders by myself because They… Were… Awesome. Were they good for you? Obviously not. But that’s not why we bought them. It’s not Ronald McDonald’s responsibility to keep you healthy, it’s yours. When they changed the fries they were just awful and I didn’t order them nearly as often.
Later the restaurant felt even more pressure from the health obsessed wing on the left and began “diversifying” their menu to be less trashy. They were trying to sell apple wedges as an alternate for fries and the menu was stocked with salads. SALADS. At McDonald’s. The only lettuce we needed to see during a visit to the Golden Arches was shredded up on the Big Macs. More changes along those lines followed and their brand loyalty cratered.
The problem with adding lots of options is that more food goes to waste since they have to prepare some of it in advance. Sure, people will always say they love more options, but it’s not always economically viable. The Breakfast All Day idea sounded great to me, but if they’re losing money on it then it’s one option too many. So that was their other major issue… too many options. But to combat the problem, they decided to diversify the menu even further and start offering all manner of specialty sandwiches. Some were good and some… not so much. But yet again they were losing more money by having to stock up and prepare even more items which didn’t fly off the heating tables fast enough. And most of this was done in response to reading too many articles in the New York Times.
McDonald’s could still probably be saved, but I doubt they’re willing to risk the backlash from Michelle Obama’s army if they did it. The company could go back to their old school formula. Trim down the menu for starters. You need a hamburger, cheeseburger, the Quarter Pounder and the Big Mac. Toss in the fish fillet and maybe one chicken sandwich. Put the fatty, lard filled oil back in the fry machine. Keep those molten hot apple pies and maybe a few dessert options. Kick the rest except for some seasonal specialties like the McRib. I’m guessing people would come back and your waste costs would go down hugely. You may get nailed with a minimum wage increase, but all your competitors will face the same thing if you do.
It’s a shame to see McDonald’s floundering, but they really brought it on themselves.
This is all a joke, McD’s left the best way to cook fries in 1990, when it abandoned Formula 47 which was a Beef Tallow based oil.... they moved to the lower saturated fat and Trans fat substitute, in 2002 I believe they left this because of trans fat, but the did not return to Formula 47.
Forumla 47 was what made great fries, the crap they replaced it for in 1990 was a hydrogenated vegetable oil that wars far worse for you than the Formula 47 that it replaced due to trans fat and the fries were crap compared to the Forumla 47. The replacement in 2002 sadly was not back to the original forumla 47.
McD’s needs to return to Formula 47 on their fries...
However the biggest negative I have when I do find myself eating at a McDonald’s, which isn’t often, can be the clientele themselves... stopped into lunch one day and two guys were sitting there with their phone on full blast watching something with some crap profanity laden soundtrack as they ate their lunch not giving a damn about anyone else in the place... the Dining room was relative full when they arrived, and empty within 10 minutes.. That sort of thing does NOT help you.... McD’s is getting the reputation as the ghetto shop... and that’s not helpful.
I agree, Carl’s is the best. Sure they have lots of new products (limited time specials), but they are generally awesomely excessive, like smoked brisket on a burger, and they sell.
Jack in the Box is pretty good too. They serve breakfast all day and make it work. Ditto the above with specials. Their portabella mushroom buttery jack (fried in butter with the bun grilled in butter) was maybe the best fast food burger ever.
I dropped Burger King with the gay whopper so now it's Taco Bells and Wendy's for me. CFA is in the wrong location but they are an excellent place. I'd go there in a heartbeat if someone important called another "CFA Day".
I remember when they used to have mounds of burgers prepared in advance and the fries were cooked in lard. The burgers never went longer than 10 minutes without selling and the fries not only tasted good, but they were CRISP, not like the half cooked, limp noodles of today.
I totally agree with the call numbers and lack of accountability. They use to serve a large “Newman’s Own” coffee for a buck -love the coffee! That got me in the door and occasionally bought an egg sandwich. But, it’s annoying when I’m just waiting for a coffee and the call number taker is standing idle (deadheading) starring at just the very next order...instead of just pouring the coffee two orders up (all of 20 seconds to pour, maybe).
Glass Tower Syndrome.
The headquarters people know that the corporate culture that gets them promoted has nothing to do with what happens in the field, and EVERYTHING to do with political correctness and internal politics.
How “cool” and PC they look and sound in meetings counts for more than customer satisfaction.
Not the first company to fall part from this, and it will be far from the last.
I completely agree on the clientele side, but I think they’re coming to every fast food joint that started being allowed to accept food stamps in the past few years.
If McDonald’s is worried about profit now, wait until someone threatens to cut them off from the EBT gravy train.
And I can’t find good fries anywhere.
You are correct about them not salting the fries properly. If they would salt the hell out of them like they used to, then they would be good!
Wednesday is splurge on fast food day.
Usually we go to McDonalds, but last week they gave me fries though I asked for hash browns. And we obeyed the order to “Pull ahead” and sat there for several minutes, until they finally get us the Sausage McMuffin and cheeseburgers ...
It’s Snake and Shake today. At least you know you got a wait there.
Ever tried Carl’s Jr. coffee? It’s excellent medium dark coffee. And their breakfast menu is so much better it’s not even a contest. The fresh made biscuits are great.
Funny you mention Taco Bell employees. I have noticed the same 4 or 5 Taco Bell employees at a location near my house that have worked there for multiple years. Its always nice to go in there and see familiar/friendly faces.
We don’t have Carl’s Jr. here in North Carolina, to my knowledge. Though as you might guess, we got some Hardee’s now.
Nope, don’t blame the food.
Thanks to Democrats and establishment Republicans, 20 million illegal aliens became available to hire at McDonalds.
A visit to McDonalds these days is a trip to Central America. The order takers can barely speak English. They make the wrong orders. They cook like they did in Guadalajara.
After a few visits you just give up.
Si se puede!
That was true of every service industry job in California in 2000 when I lived there.... so its more than that.
MacDonalds wanted to be everything for everyone. That is an impossible goal. Cut out the stupid apple slices that have been in the packages for months and are still white. Bring back the 2 all beef patties, special sauce, lettuce,cheese, pickles, onions, on a sesame seed bun.
Oh, and their old fries were delicious.
The lefties got to them and as always, corrupted the brand.
Why can’t people ever figure out you will never make leftists happy. It’s an impossible task, they exist merely on unhappiness and using guilt as a tool. You give them an inch, they come back and ask for two.
Cowardice let the left wingers destroy them. When has cowardice ever paid off?
Leftists must make everyone else unhappy, then they are happy.
15ish years ago I worked on a big software and hardware engineering project. In the two years of that project I went to TB almost every day. I couldn't help but notice that TB had less turnover than our project did. 25 years ago I had a friend whose wife worked at TB. She just loved working there.
You are out of your mind and have no taste buds.
I quit eating their crap when they cut out the lard and all their food started to taste like cardboard.
If I want a healthy meal (that nobody spit in or dropped a booger in) with excellent ingredients I will cook it at home.
All fast food is just a convenience for lazy people, McDonald’s just happens to taste like crap.
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