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Richard Adams

Richard Adams
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  • McDonald's: Recent Price Weakness May Present A Buying Opportunity [View article]
    Doubtful that Oak Brook will worry about franchisee morale. Unlike the other large chains where powerful franchisees might have 40/50/100+ restaurants the average McDonald's franchisee in the USA has about six locations and is very expendable. They go along to stay under the radar.
    Aug 29 01:53 PM | Likes Like |Link to Comment
  • McDonald's: Recent Price Weakness May Present A Buying Opportunity [View article]
    Billyspeed is absolutely correct, the broadening of the menu and "innovation" are largely responsible for the sales problems at McDonald's. The kitchens are a disaster zone, the customers are confused, and the employees overwhelmed.
    Anyone calling for a broadening of the menu knows nothing about the restaurant business, unfortunately, that includes most of the top management people at McDonald's.

    As for technology solving the problem - it will only make a minor dent. The pre-pay and ordering option works like this. One can pay with their phone but since
    the credit card processing is so fast using your phone will only save nano -seconds. If you order remotely your food is not prepared until you show up at the restaurant. Why? People don't know when they are going to actually arrive. McDonald's, or any fast food, does not stand up well sitting around in a bag. After 10 or 15 minutes the quality is not acceptable and the food must be thrown away. You will order and pay remotely, arrive at the restaurant and give them your order number. Then they prepare your food.

    A little faster but not enough to make up for a bloated menu and a messed up operating system.
    Aug 28 11:45 PM | 5 Likes Like |Link to Comment
  • Is Casey's General Stores Eating McDonald's Lunch? [View article]
    I've been to Casey's and they are a class act for a C-store. But, since MCD USA does 65% to 75% of their business in the drive-thru a C-store w/o a drive-thru is not much of threat.
    Aug 25 06:41 PM | Likes Like |Link to Comment
  • Blackstone's Heartland Food reportedly on the block [View news story]
    McDonald's will make noises about re-engineering but the size of the system and the size of the bureaucracy will keep it from happening.
    Aug 17 07:15 AM | Likes Like |Link to Comment
  • Blackstone's Heartland Food reportedly on the block [View news story]
    This kind of thing is why Burger King will never really succeed. Huge franchisees changing hands, the entire company constantly changing ownership. McDonald's has a lot of challenges right now but at least they have stability.
    Aug 15 03:46 PM | 2 Likes Like |Link to Comment
  • McDonald's Is Still A Fantastic Dividend Stock [View article]
    Don't count on MCD simplifying the menu. It appears to be only lip service since this management team thinks they have to be all things to all people.
    Just this week they announced the addition of oranges as an option in Happy
    Meals. Here's the link:

    http://usat.ly/1oxQSB9
    Aug 14 03:14 PM | 1 Like Like |Link to Comment
  • McDonald's: An Undervalued Dividend Champion I Bought With A Margin Of Safety [View article]
    I don't think you'd ever find a McDonald's franchisee who thinks they are paying below market rates. The McDonald's franchise rent arrangement
    has nothing to do with market rates, it's a fixed percentage of sales. The higher the franchisee raises sales the more McDonald's Corp. makes.
    Aug 13 08:32 PM | Likes Like |Link to Comment
  • McDonald's: An Undervalued Dividend Champion I Bought With A Margin Of Safety [View article]
    I'm not saying they shouldn't do it. I've been complaining about the size of the menu for years. They HAVE to do it, otherwise there will be no growth. I doubt that this management team will do so, the next team will have to bite the bullet.
    Aug 12 06:45 PM | Likes Like |Link to Comment
  • McDonald's: An Undervalued Dividend Champion I Bought With A Margin Of Safety [View article]
    You are right but it's tough to take things off the menu when sales are soft because every customer, every sales dollar is precious. It's also hard because many of the poor selling menu items are on the menu for political reasons or to placate the food police.
    Aug 12 04:57 PM | 2 Likes Like |Link to Comment
  • McDonald's: An Undervalued Dividend Champion I Bought With A Margin Of Safety [View article]
    McDonald’s has always rejected the idea of doing anything with the real estate. They always say the “it’s not right for them”.

    The real estate situation is complicated by the franchise structure and I’ve never understood how they could pull equity out of their heritage real estate and not mess up the franchise relationships. If the REIT were to pay contemporary prices for McDonald’s owned real estate the REIT would then expect to charge contemporary rents when they lease back to McDonald’s. So McDonald’s gets some one-time cash but their revenue stream is reduced forever.

    The typical McDonald’s franchise agreement is for 20 years and the franchisee's rent terms are fixed in the contracts. McDonald's has no power to change the rent charged to the franchisee mid-term. Yes, they can adjust the rent when the franchise is renewed at 20 years but the rent still has to be reasonable or the franchisee will reject the new term.

    I agree with management, it’s not right for them.
    Aug 12 04:27 PM | 3 Likes Like |Link to Comment
  • Buy McDonald's Before This Storm Subsides [View article]
    Over the past decade organized labor has been successful in changing the definition of the minimum wage as a "starting wage" to a "living wage". If the government gets to decide what a living wage is we are going to see a lot of inflation all through the economy.
    Jul 30 01:16 PM | Likes Like |Link to Comment
  • Buy McDonald's Before This Storm Subsides [View article]
    Thank you 16018072 - I'll be here all week!
    Jul 30 02:24 AM | Likes Like |Link to Comment
  • Buy McDonald's Before This Storm Subsides [View article]
    Liberals can only deal with the initial "feel good" idea of raising wages and cannot think through to the negative, inflationary impact on the economy.
    Jul 29 02:42 PM | 3 Likes Like |Link to Comment
  • Buy McDonald's Before This Storm Subsides [View article]
    You are absolutely right. McDonald's is trying to address this issue with a system where you order at one end of the counter and pick up at the other end of the counter. When you order you received a receipt with order number printed boldly on it and that number flashes on a monitor when your order is ready. It's a good system but unfortunately the roll-out is going slowly. This confusion might be one of the reasons more and more of the business is going out the drive-thru.
    Jul 28 09:05 PM | 1 Like Like |Link to Comment
  • Buy McDonald's Before This Storm Subsides [View article]
    Automation can only go so far in a restaurant, especially since McDonald's CEO is determined to offer more "customization". The order taking process is only a small part of this labor intensive business. Though, some forms of automated ordering could speed up service times. Keep in mind that 75% of McDonald's USA business goes thought the drive-thru, that's going to be tough to automate.
    Jul 28 06:38 PM | 2 Likes Like |Link to Comment
COMMENTS STATS
159 Comments
118 Likes