Protesters aren't happy with McDonald's, but neither are its franchisees
McDonald's restaurant owners are less optimistic than they were a year ago, thanks to still-declining sales and a perception that the burger giant has run out of ideas.
A McDonald's restaurant in Los Angeles. Lucy Nicholson
Lucy Nicholson/Reuters/File
Steve Easterbrook has replaced Don Thompson as CEO but McDonald鈥檚 franchisees鈥� dissatisfaction with management has not been replaced with optimism. Janney Montgomery鈥檚 Scott analyst Mark Kalinowski鈥檚 latest survey of McDonald鈥檚 owners鈥�32, representing 215 stores鈥攆inds them even less optimistic than they were a year or even a one month ago. One says the brand 鈥渉as jumped the shark,鈥� meaning it has run out of ideas.
When owners were asked to rate their six-month outlook for their business on a scale of 1 to a high of 5, March鈥檚 1.48 average was the lowest in the 11 years that Kalinowski has conducted the survey. Three months ago, the average was 1.67.
One reason for the gloom may be still-declining sales. The aggregate prediction from these 32 operators was that McDonald鈥檚 March sales were down 3.7% (and -4.6% in the East). Said one operator, 鈥淢cDonald鈥檚 system is broken. They talk menu reduction to help our people, simplify our menu for customers, but add products t help sales and it doe not work. We will continue to fall and fail.鈥�
Another operator鈥檚 assessment of what鈥檚 wrong: 鈥淐ustomer concerns, McDonald鈥檚 leadership, customers want different tastes.鈥�
McDonald鈥檚 held a 鈥淭urnaround Summit鈥� with operators earlier this year. Most were not impressed with the ideas presented鈥攅specially the Create Your Taste customization platform being tested鈥攐r with management鈥檚 ability to engineer a turnaround. Said one, 鈥淭he Turnaround Summit was a farce. The ideas presented鈥攕uch as Create Your Taste鈥擠O NOT fit our business model. McDonald鈥檚 Corp. has panicked and jumped the shark. The problem is an unwieldy menu鈥攖oo big鈥攁nd trying to be all things to all people.鈥�
鈥淐reate Your Taste will cost approximately $125,000 per restaurant,鈥� said another owner. 鈥淚t sounds like, initially, sales with this new concept are very slow taking off.鈥� One owner complained, 鈥淚 came away from the summit confused. McDonald鈥檚 management does not know what want to be. Expensive鈥攁nd slow鈥攃ustom burgers in the same restaurant where we sell the Dollar Menu?鈥�
One operator said simply, 鈥淧ie in the sky,鈥� which may be the latest item on McDonald鈥檚 menu.