McDonald's Writeup in Financial Times Has No Mention of Franchisees
Just yesterday, Financial Times penned a very timely article on McDonald's. With great sources and a multiyear perspective, it recapped the last several years of ups and downs and initiatives. It was breathtaking, however, that the article had not one word about McDonald's franchisees' conditions and sentiments.
As we all know, "asset light" is the theme de jour of the last two decades of the QSR majors. McDonalds is tracking towards a 95% franchised model. But yet, franchisees who take care of 95% of the guests, fund equipment, rents and models--are missing from the narrative.
In all matters analytical, investigative and storytelling, we all can hope for a better, more full discussion in the future.
[Read Financial Times' McDonald's Flips Fortunes with Back to Basics Approach on CNBC]
Comments
Researcher tells McD to focus on fast food, not fast casual
Both you and John Gordon are always so informative. I enjoy reading your expert comments and articles.
Mr. Gordon makes a good point, where are the voices of the American franchise owners? This comment below by McDonald's CEO Steve Easterbrook and the lack of vigorous follow-up by the reporter baffles me. It practically begs for the voice of franchise owners to be heard.
Last year Mr Easterbrook hired Lucy Brady, a longtime Boston Consulting Group executive, to investigate what was going wrong. She led a wide-ranging study to dissect where people were eating. Her results, which Mr Easterbrook describes as "frustrating, but actually reassuring", showed that the majority of the missing McDonald's customers were going to other burger chains, such as Wendy's and Burger King rather than rival fast casual outlets. Customers didn't stop wanting fast food, they just didn't want McDonald's fast food. Mr Easterbrook's response was to adapt the "modern progressive" doctrine and adopt a less aspirational focus: "the day-to-day basics".
If that is the case, then why is McDonald's in such a hurry to upgrade its McCafe coffees and create gourmet burgers (that is to say customized fast-casual styled better-burger sandwiches with all the garnishings)?? Those things do not need to be part of its barbell menu offering strategy. McDonald's doesn't need to be a Starbucks, Smashburger or Shake Shack. No kale needs to be offered, the article quotes the CMO as saying, which I suppose refers to the fact that just weeks ago kale was offered. McDonald's just needs to be a better quick service restaurant.
This is an expensive experiment for franchise owners.
I understand franchisees are scared to sound out in public. I'm very glad that FT at least asked Dick Adams for comment to solicit his expertise and franchisee insights. As I recall my readings, he's been calling for McDonald's to simplify for some time now.
If the research tells McDonald's that the answer to losing customers is to do fast food better, then why is it having its franchise owners spend all that money to grow into fast casual? Why would offering vanilla mocha frappacino at a McCafe inside a McDonald's restaurant help? Burger King franchise owners offer customers a cup of decaf Joe as its premier coffee. Apparently, that is what McDonald's franchise owners are really competing with. Burger King's premier sandwich is its BBQ bacon whopper sandwich. And Wendy's? A bacon deluxe.
Did I miss the logic here?
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Devil's Bargain: An Old Story
Trading away your human rights (right to associate, speak freely) in exchange for $ has its consequences to the franchisees and his/her soul.
Was there a lesson about the short-sightedness of making a golden calf into a god?
People choose what they worship but those choices have consequences.
- Log in to post comments
Devil's Bargain: An Old Story
Trading away your human rights (right to associate, speak freely) in exchange for $ has its consequences to the franchisees and his/her soul.
Was there a lesson about the short-sightedness of making a golden calf into a god?
People choose what they worship but those choices have consequences.
- Log in to post comments
- Log in to post comments
Researcher tells McD to focus on fast food, not fast casual
Both you and John Gordon are always so informative. I enjoy reading your expert comments and articles.
Mr. Gordon makes a good point, where are the voices of the American franchise owners? This comment below by McDonald's CEO Steve Easterbrook and the lack of vigorous follow-up by the reporter baffles me. It practically begs for the voice of franchise owners to be heard.
FT reports:
If that is the case, then why is McDonald's in such a hurry to upgrade its McCafe coffees and create gourmet burgers (that is to say customized fast-casual styled better-burger sandwiches with all the garnishings)?? Those things do not need to be part of its barbell menu offering strategy. McDonald's doesn't need to be a Starbucks, Smashburger or Shake Shack. No kale needs to be offered, the article quotes the CMO as saying, which I suppose refers to the fact that just weeks ago kale was offered. McDonald's just needs to be a better quick service restaurant.
This is an expensive experiment for franchise owners.
I understand franchisees are scared to sound out in public. I'm very glad that FT at least asked Dick Adams for comment to solicit his expertise and franchisee insights. As I recall my readings, he's been calling for McDonald's to simplify for some time now.
If the research tells McDonald's that the answer to losing customers is to do fast food better, then why is it having its franchise owners spend all that money to grow into fast casual? Why would offering vanilla mocha frappacino at a McCafe inside a McDonald's restaurant help? Burger King franchise owners offer customers a cup of decaf Joe as its premier coffee. Apparently, that is what McDonald's franchise owners are really competing with. Burger King's premier sandwich is its BBQ bacon whopper sandwich. And Wendy's? A bacon deluxe.
Did I miss the logic here?