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Richard Adams

Richard Adams
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  • McDonald's August Sales: A Not So Happy Meal [View article]
    Comp sales were even worse considering that August 2014 had five full weekends (5 fri, 5 Sat, 5 Sun) something that happens only a few times a decade and for sure didn't happen in August 2013.
    Sep 10 03:21 AM | Likes Like |Link to Comment
  • Update: McDonald's Sales Look Disturbing [View article]
    That gentleman has six months to pull it together, but it's a big, maybe impossible, job.
    Sep 9 05:00 PM | Likes Like |Link to Comment
  • (Un)Happiness At McDonald's? Outlook Not So Tasty In 2014 [View article]
    Speaking as someone who's served a few million customers out of a McDonald's drive-thru window - those cars "will" pull out of line and go elsewhere.
    Sep 9 03:24 PM | 1 Like Like |Link to Comment
  • (Un)Happiness At McDonald's? Outlook Not So Tasty In 2014 [View article]
    Hence the use of the would "could".
    Sep 8 10:51 AM | Likes Like |Link to Comment
  • (Un)Happiness At McDonald's? Outlook Not So Tasty In 2014 [View article]
    Drive-thru lines wrapped around the building could just mean slow service and a screwed-up operation. Many of those cars will pull out of line and visit a faster competitor.
    Sep 7 01:09 PM | Likes Like |Link to Comment
  • (Un)Happiness At McDonald's? Outlook Not So Tasty In 2014 [View article]
    McDonald's shareholders get their rewards from McDonald's real estate through the % rents MCD charges franchisees. MCD rents real estate at a fixed monthly/annual rent and then charges the franchisees a % of sales which is almost always much higher than the MCD Corp. fixed occupancy costs. MCD leases a lot of their sites and does not "own" as much real estate as is rumored.
    Sep 4 02:40 PM | 2 Likes Like |Link to Comment
  • 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 | 1 Like 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
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