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Richard Adams

Richard Adams
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  • Political issues slow broad Chick-fil-A expansion [View news story]
    Chick fil A can do just fine by staying out of areas where the politics is stupid and poisonous. This is the best run chain in the quick service industry and there are plenty of fine communities that will welcome them.
    Aug 21, 2015. 11:52 AM | 15 Likes Like |Link to Comment
  • McDonald's: Time For Something Really Radical [View article]
    Here's your problem - McDonald's is so over built in the USA that a new or acquired chain would compete directly with multiple local McDonald's locations and would cannibalize the top end of the McDonald's menu leaving the franchisee with the unprofitable bottom end of the menu. This would likely end up in numerous lawsuits and very expensive litigation with franchisees. This is why, during their previous flirtations with other brands, they stayed away from hamburgers. But even Chipotle was taking sales from nearby McDonald's and was starting to cause conflicts with franchisees, that's one of the many reasons they got out of Chipotle.
    Aug 19, 2015. 04:18 PM | Likes Like |Link to Comment
  • McDonald's Franchisees Are Unhappy. What's Next? [View article]
    Franchisees are not employees, if this CEO isn't fair with them they will just ignore him until he goes away.
    Jul 22, 2015. 10:58 PM | 1 Like Like |Link to Comment
  • McDonald's Franchisees Are Unhappy. What's Next? [View article]
    Trying to share the restaurant operating profit is very problematic. Bottom line profits vary broadly by individual restaurants and varies by franchisee. Some franchisees are great at meeting profit goals, some not so much. Having corporate dictating margins to franchisees would cause far more problems than exist today.
    Jul 22, 2015. 08:23 PM | Likes Like |Link to Comment
  • 5 Reasons McDonald's Shrinkage Is A Bullish Move [View article]
    You would be wrong about closing 1/2 of the company owned stores. The history of MCD is that the company owned stores are higher than average volume over franchised stores. Not because they are better run but because the corp. is a less efficient operator and has a higher break even. Since the mid-1970s MCD has had a policy of selling lower volume corporate stores to franchisees (who can do a better job and raise sales).

    Why would they close high volume corporate stores when they can sell them to franchisees and book a profit?
    Jun 19, 2015. 03:23 PM | Likes Like |Link to Comment
  • 5 Reasons McDonald's Shrinkage Is A Bullish Move [View article]
    The "owners" have no control over "substandard fare", they serve food designed and approved by MCD Corp. Franchisees do not source food. The owners do set the prices but most would dump things like the Dollar Menu ASAP.
    Jun 19, 2015. 02:54 AM | 3 Likes Like |Link to Comment
  • 5 Reasons McDonald's Shrinkage Is A Bullish Move [View article]
    You’re three McDonald’s example is interesting but you’ve left out a complexity. It’s likely those are franchised restaurants. If any of the restaurants are newer they might have as much as 20 years left on the franchise. And the franchise will have a substantial investment in equipment and fixtures to write off. What if the franchisee just spent a million or two remodeling or rebuilding the restaurant? Can McDonald’s afford to buy them out of their contracts and then pay them back for their investment? A modest sales increase at the remaining location(s) will not make the franchisee whole.

    And closing the Wal-Mart location would not accomplish much as they are typically low volume and don’t draw much business from nearby freestanding locations.

    It was easy for Starbuck’s to close stores years back, they don’t have franchises and can just buy their way out of a lease and walk away.
    Jun 19, 2015. 02:37 AM | 1 Like Like |Link to Comment
  • McDonald's lower after detailing turnaround strategy [View news story]
    McDonald's CEO Greenberg gave that same "turnaround speech" in 1998.
    May 4, 2015. 09:23 AM | Likes Like |Link to Comment
  • McDonald's tests drive-thru customization [View news story]
    While this will still slow down the speed of service it's a far better approach than the absolutely brainless "Create Your Taste" platform.
    Apr 29, 2015. 01:43 PM | Likes Like |Link to Comment
  • McDonald's Is Aiming For Shock And Awe - What's On The Menu? [View article]
    One cannot compare the roll out of the Egg McMuffin to making changes to McDonald's today. In those days McDonald's was 5% of the size it is today. Be it in the USA or globally, making big changes to McDonald's will take years, not months. The new CEO cannot make changes overnight but Wall Street wants results in the next quarter.
    Apr 27, 2015. 04:42 PM | Likes Like |Link to Comment
  • McDonald's Is Aiming For Shock And Awe - What's On The Menu? [View article]
    He apparently has no plan to share anything with franchisees, if that were the case it would have already happened. After less than 60 days in the CEO position he has shown to be a very top-down manager and a franchise system cannot be run that way. None of his grand ideas or initiatives will move forward without franchisee cooperation. At this time that appears unlikely.
    Apr 27, 2015. 04:20 PM | Likes Like |Link to Comment
  • Should McDonald's Spin Out A McREIT? [View article]
    For a franchised chain there's another complexity - these McDonald's owned locations are already encumbered by franchise agreements and leases with franchisees. McDonald's could certainly transfer the ownership of corporate owned real estate to a REIT but they are still bound by the terms of that franchise agreement. McDonald's and the REIT would have no power to change the terms of the lease or modify the rent the franchisee pays. Until, of course, the end of the 20 year franchise at which time the franchisee can take new terms set by the REIT or walk away from the location.
    Mar 26, 2015. 11:22 PM | 1 Like Like |Link to Comment
  • Should McDonald's Spin Out A McREIT? [View article]
    I assume you post as a joke. You should visit a few MCD stores. Not that many have Playplaces, many have been removed.
    Mar 26, 2015. 07:13 PM | 4 Likes Like |Link to Comment
  • Should McDonald's Spin Out A McREIT? [View article]
    You're right. They've been playing around with the real estate portfolio for 20 years with zero transparency. They'll never let prying eyes in on what they've been doing.
    Mar 26, 2015. 06:23 PM | Likes Like |Link to Comment
  • Should McDonald's Spin Out A McREIT? [View article]
    If you've echoed Glenview's numbers correctly...their numbers are wrong.
    You write:

    "The majority of McDonald's restaurants are operated by franchisees that pay approximately 4 percent of sales in royalties. Additionally, where McDonald's also owns the real estate, Robbins estimated that the company receives 9 percent of sales as rent from the franchisees."

    The royalty is not "approximately" 4% - it is always 4%.

    All franchisees pay rent to McDonald's. It does not matter if the company owns the real estate or just leases the site from a third party and then sublets to the franchisee. The rent is a % of sales and can be as low as 8.5% on older stores to 15 - 20% on newer stores.

    It's scarey that they are making such big assumptions on bogus facts and figures.
    Mar 26, 2015. 05:17 PM | 5 Likes Like |Link to Comment
COMMENTS STATS
205 Comments
202 Likes