Seeking Alpha

Richard Adams

Richard Adams
Send Message
View as an RSS Feed
View Richard Adams' Comments BY TICKER:
Latest  |  Highest rated
  • 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 | 3 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 | 4 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
  • Buy McDonald's Before This Storm Subsides [View article]
    Investors should not count on endless menu price increases at McDonald's. The core menu is already too expensive (Big Macs, Quarter Pounders). With so many menu items available for $1.00 franchisees learned long ago that raising prices on the larger sandwiches just sends consumers over to buy a bag full of sandwiches for the price of one large sandwich. As long as the Dollar Menu is around prices for the rest of the menu cannot be increased at McDonald's USA.
    Jul 28 05:26 PM | 2 Likes Like |Link to Comment
  • Restaurant Roundup: Companies To Watch [View article]
    "we are expecting McDonald's to right the ship in the not-too-distant future."

    Any specifics and what moves they might make to right the ship?
    Jul 14 06:25 PM | Likes Like |Link to Comment
  • McDonald's tests order-ahead mobile app [View news story]
    Absolutely right. Sales at McDonald's are stagnated by slow service. The menu is too large and too complicated. The kitchen operations are impossible. They took a fast, efficient restaurant operation and ruined it trying to be all thing to all people.
    Jun 24 06:17 PM | Likes Like |Link to Comment
COMMENTS STATS
171 Comments
136 Likes