Own McDonald's For The Rental Income, Not The Burger Sales [View article]
Wow, I've never seen so many MC-misconceptions in one place. The most important error being that McDonald's does not own most of the real estate, it's leased from landlords or from an off-the-books REIT owned by a group of McDonald's suppliers.
If a McDonald's franchisee goes under they are replaced almost immediately by another franchisee or corporate runs the location until it is refranchised. The location does not close and does not sit empty for any length of time.
You can't apply a cap-rate to a McDonald's because the percentage rent charged to the franchisee by McDonald's is four or five times what it would be in an open market real estate lease.
You can't separate rental income from burger sales, it's all the same thing. Rent and royalties are a percentage of food sales. The more burgers sold the higher the fees paid to MCD.
The restaurant sector will watch closely what new McDonald's (MCD) U.S. president Jeff Stratton has in mind when he takes over his new position next week. One intriguing industry take on the chain's future: "Something is going to have to happen - either changes to the marketing management, to the current agency roster or investing in their stores or all of it. The status quo is not going to work." [View news story]
McDonald's USA is up against some tough numbers from last winter and there's little Jeff Stratton can do about it. We won't know if his leadership is making a difference until the summer of 2013.
McDonald's (MCD) announces its will replace its current president of McDonald's USA with Jeff Stratton, currently the company's Global Chief Restaurant Officer. Jan Fields is stepping down from the position after working at the Golden Arches for more than 35 years. [View news story]
These are tough times to be working for McDonald's Corporation.
Memo To McDonald's: Fix The Reporting [View article]
Such a change would be difficult for the vast McDonald's bureaucracy but one cannot blame the franchisees for being a sticking point. McDonald's Corporation has the restaurants so wired into the home office the company could report same store sales progress every fifteen minutes if desired without any involvement by franchisees.
A new initiative by McDonald's (MCD -0.4%) to sell bagged coffee in stores in Canada could challenge Starbucks (SBUX -1.5%) and Tim Hortons (THI -0.5%) in the nation, according to analysis. Though small in scale, the plan is big in potential after the venture by McDonald's into premium coffee went much better than naysayers dreamed it would. What to watch: Is a supermarket deal in Canada on tap? [View news story]
It will be interesting to see how McDonald's franchisees feel about selling products in their restaurants that ultimately encourage customers to by-pass the restaurants.
The top exec of McDonald's (MCD -0.1%) in Canada says the company will ramp up its pace of expansion in the nation after adding restaurants at a moderate clip over the last five years. The company's key rival in Canada is Tim Hortons (THI +1.1%), although fast-casual players such as Chipotle and Five Guys Burgers have made a dent in market share. [View news story]
With so much turnover in the upper ranks of McDonald's Corp. there is no one left who remembers the self inflicted damage the company did to itself in the mid-1990s by building too many new stores and cannibalizing sales of existing stores. MCD watchers should not expect same store sales increases from the Canadian division for the next 3 or 4 years.
RBC Capital say McDonald's (MCD) should see sales pick up again after Q1 of 2013 after the company got stuck in a rut of sub-3% growth. The restaurant chain is seen promoting new menu items to boost traffic numbers as it tries to stay ahead of rivals such as Burger King and Wendy's that have narrowed the gap in offerings. [View news story]
Don Thompson is indeed a sound leader but there is little he can do to overcome the strong sales comps from last winter. We will have to wait until next summer or fall to properly gauge his performance.
RBC Capital say McDonald's (MCD) should see sales pick up again after Q1 of 2013 after the company got stuck in a rut of sub-3% growth. The restaurant chain is seen promoting new menu items to boost traffic numbers as it tries to stay ahead of rivals such as Burger King and Wendy's that have narrowed the gap in offerings. [View news story]
McDonald's USA same store sales will likely be negative in December 2012 and Q1 2013 due to the warm winter of 2011/2012. If MCD USA sales beat last winter Don Thompson will have shown himself to be a brilliant leader!
UBS lowers estimates on McDonald's (MCD) ahead of the restaurant chain's Q3 report on its view that September's global same-store sales slowed. Analysts with the firm take Q3 EPS to $1.50 from $1.53 and full-year EPS gets shaved to $5.46 from $5.50. [View news story]
Mr. Palmer at UBS continues to count on food inflation to increase same store sales at McDonald's. There's a limit to how much franchisees can raise prices and still continue to offer the "Dollar Menu". Today I can buy a very tasty McDouble or McChicken for $1.00 or a Big Mac for over $4.00. Why would I do that? Or why would I spend over $7.00 for a Quarter Pound w/ Cheese meal when I can but an entire bag of food from the Dollar Menu? At McDonald's we are proving that raising prices can actually reduce the average check. Franchisees cannot adjust for for food inflation and also to offer the Dollar Menu. It's one or the other.
Two-for-one Big Macs: McDonald's (MCD +0.4%) starts to step up the use of discounting in Europe as it attempts to hold on to sales. Though the chain has used promotions before in Europe to increase store traffic, the scope of the most recent push is much larger with most of Germany and France encapsulated. The development has the potential to significantly impact the overall bottom line of the company with close to 40% of its operating profit derived from the continent. [View news story]
Benifits MCD Corp. since franchisees absorb the costs of price reductions.
McDonald's (MCD +0.3%) exec Bob Langert throws a bit of a monkey wrench in the theory that buying locally-produced food is more environmentally friendly than food purchased from national distribution chains. He says the company has extensively studied supply chains to determine that sometimes transportation efficiencies lose out to production efficiencies. If he's right, McDonald's may try to beat down some of the claims of superiority of Whole Foods Market (WFM -2.1%) and Chipotle (CMG -1.1%) on the environmental issue. [View news story]
"Safest" as in nothing to worry about for you and your family.
McDonald's (MCD +0.3%) exec Bob Langert throws a bit of a monkey wrench in the theory that buying locally-produced food is more environmentally friendly than food purchased from national distribution chains. He says the company has extensively studied supply chains to determine that sometimes transportation efficiencies lose out to production efficiencies. If he's right, McDonald's may try to beat down some of the claims of superiority of Whole Foods Market (WFM -2.1%) and Chipotle (CMG -1.1%) on the environmental issue. [View news story]
Food safety is the #1 consideration. One of the reasons McDonald's is the safest restaurant on the planet is that they source their food from a relatively small number of suppliers. A smaller number of suppliers is easier to inspect, control, and keep within specs. Having "local" suppliers scattered around the county would cause food to be less consistent and possibly less safe.
Though McDonald's (MCD) global same-store sales for August missed the mark of some analysts, the broad gains across regions could calm the waters on the name a bit. The bigger question: How much will the restaurant chain's promotions and new menu items cut into profits? MCD +0.6%. [View news story]
New menu items ares not the answer. The McDonald's kitchen is bogged down with many poorly selling menu items and the capacity of the restaurants is very restricted. Growing traffic in the future will be difficult.
Fast food chains such as McDonald’s (MCD), Starbucks (SBUX), Chipolte (CMG) plan to use tech innovations and other strategies to speed up lines during peak hours to maximize their sales. Equipping employees with hand-held ordering systems and encouraging customers to pay by smartphones are two areas in focus. [View news story]
Not too sure what you’re trying to say but in the real world of restaurant operations one sees customers open the door, see a long line, turn around and leave. This is especially true if there are other food opportunities nearby, and there almost always are.
This is especially true in the drive-thru. The line will only get just so long and then drivers will go down the street.
Fast food chains such as McDonald’s (MCD), Starbucks (SBUX), Chipolte (CMG) plan to use tech innovations and other strategies to speed up lines during peak hours to maximize their sales. Equipping employees with hand-held ordering systems and encouraging customers to pay by smartphones are two areas in focus. [View news story]
This is not a particularly good time to be a franchisee in the fast food business. Franchisees are under pressure to remodel or replace ageing facilities, absorb nightmarish commodity increases over the next few years, and invest in constantly changing technologies (very expensive technologies). It's a kind of perfect storm.
Hopefully, after all that, they might make a profit.
Own McDonald's For The Rental Income, Not The Burger Sales [View article]
The most important error being that McDonald's does not own most of the real estate, it's leased from landlords or from an off-the-books REIT owned by a group of McDonald's suppliers.
If a McDonald's franchisee goes under they are replaced almost immediately by another franchisee or corporate runs the location until it is refranchised. The location does not close and does not sit empty for any length of time.
You can't apply a cap-rate to a McDonald's because the percentage rent charged to the franchisee by McDonald's is four or five times what it would be in an open market real estate lease.
You can't separate rental income from burger sales, it's all the same thing. Rent and royalties are a percentage of food sales. The more burgers sold the higher the fees paid to MCD.
The restaurant sector will watch closely what new McDonald's (MCD) U.S. president Jeff Stratton has in mind when he takes over his new position next week. One intriguing industry take on the chain's future: "Something is going to have to happen - either changes to the marketing management, to the current agency roster or investing in their stores or all of it. The status quo is not going to work." [View news story]
McDonald's (MCD) announces its will replace its current president of McDonald's USA with Jeff Stratton, currently the company's Global Chief Restaurant Officer. Jan Fields is stepping down from the position after working at the Golden Arches for more than 35 years. [View news story]
Memo To McDonald's: Fix The Reporting [View article]
franchisees.
A new initiative by McDonald's (MCD -0.4%) to sell bagged coffee in stores in Canada could challenge Starbucks (SBUX -1.5%) and Tim Hortons (THI -0.5%) in the nation, according to analysis. Though small in scale, the plan is big in potential after the venture by McDonald's into premium coffee went much better than naysayers dreamed it would. What to watch: Is a supermarket deal in Canada on tap? [View news story]
The top exec of McDonald's (MCD -0.1%) in Canada says the company will ramp up its pace of expansion in the nation after adding restaurants at a moderate clip over the last five years. The company's key rival in Canada is Tim Hortons (THI +1.1%), although fast-casual players such as Chipotle and Five Guys Burgers have made a dent in market share. [View news story]
RBC Capital say McDonald's (MCD) should see sales pick up again after Q1 of 2013 after the company got stuck in a rut of sub-3% growth. The restaurant chain is seen promoting new menu items to boost traffic numbers as it tries to stay ahead of rivals such as Burger King and Wendy's that have narrowed the gap in offerings. [View news story]
do to overcome the strong sales comps from last winter. We will
have to wait until next summer or fall to properly gauge his performance.
RBC Capital say McDonald's (MCD) should see sales pick up again after Q1 of 2013 after the company got stuck in a rut of sub-3% growth. The restaurant chain is seen promoting new menu items to boost traffic numbers as it tries to stay ahead of rivals such as Burger King and Wendy's that have narrowed the gap in offerings. [View news story]
If MCD USA sales beat last winter Don Thompson will have shown himself to be a brilliant leader!
UBS lowers estimates on McDonald's (MCD) ahead of the restaurant chain's Q3 report on its view that September's global same-store sales slowed. Analysts with the firm take Q3 EPS to $1.50 from $1.53 and full-year EPS gets shaved to $5.46 from $5.50. [View news story]
Two-for-one Big Macs: McDonald's (MCD +0.4%) starts to step up the use of discounting in Europe as it attempts to hold on to sales. Though the chain has used promotions before in Europe to increase store traffic, the scope of the most recent push is much larger with most of Germany and France encapsulated. The development has the potential to significantly impact the overall bottom line of the company with close to 40% of its operating profit derived from the continent. [View news story]
McDonald's (MCD +0.3%) exec Bob Langert throws a bit of a monkey wrench in the theory that buying locally-produced food is more environmentally friendly than food purchased from national distribution chains. He says the company has extensively studied supply chains to determine that sometimes transportation efficiencies lose out to production efficiencies. If he's right, McDonald's may try to beat down some of the claims of superiority of Whole Foods Market (WFM -2.1%) and Chipotle (CMG -1.1%) on the environmental issue. [View news story]
McDonald's (MCD +0.3%) exec Bob Langert throws a bit of a monkey wrench in the theory that buying locally-produced food is more environmentally friendly than food purchased from national distribution chains. He says the company has extensively studied supply chains to determine that sometimes transportation efficiencies lose out to production efficiencies. If he's right, McDonald's may try to beat down some of the claims of superiority of Whole Foods Market (WFM -2.1%) and Chipotle (CMG -1.1%) on the environmental issue. [View news story]
easier to inspect, control, and keep within specs. Having "local" suppliers scattered around the county would cause food to be less consistent and possibly less safe.
Though McDonald's (MCD) global same-store sales for August missed the mark of some analysts, the broad gains across regions could calm the waters on the name a bit. The bigger question: How much will the restaurant chain's promotions and new menu items cut into profits? MCD +0.6%. [View news story]
Fast food chains such as McDonald’s (MCD), Starbucks (SBUX), Chipolte (CMG) plan to use tech innovations and other strategies to speed up lines during peak hours to maximize their sales. Equipping employees with hand-held ordering systems and encouraging customers to pay by smartphones are two areas in focus. [View news story]
restaurant operations one sees customers open the door,
see a long line, turn around and leave. This is especially
true if there are other food opportunities nearby, and there
almost always are.
This is especially true in the drive-thru. The line will only get
just so long and then drivers will go down the street.
Fast food chains such as McDonald’s (MCD), Starbucks (SBUX), Chipolte (CMG) plan to use tech innovations and other strategies to speed up lines during peak hours to maximize their sales. Equipping employees with hand-held ordering systems and encouraging customers to pay by smartphones are two areas in focus. [View news story]
next few years, and invest in constantly changing technologies (very
expensive technologies). It's a kind of perfect storm.
Hopefully, after all that, they might make a profit.