Big headline this week, McDonald’s is going to toast their buns. Same store sales at Mickey D’s are dropping. It’s been a good run for the burger joint with the clown. They have gone through dips before and pulled out.
They also announced they will sell more company operated stores to franchisees. And, they have a new sirloin burger. The new CEO is putting his strategy in place to fix the problem.
I spent my working career in the retail business with franchisees. I have a flash for the new CEO. For the first time in the history of McDonald’s you have lost control of your franchisees. You will never get it back.
My wife and I stopped at a McDonald’s outside Kalamazoo, Michigan this last week. A quick coffee and rest room stop. The place redefined filthy. For reasons only known to her, my wife ordered a hot chocolate. Must have been the first they sold in weeks. The young man on the register couldn’t get the order in the system. After dozens of tries he called the manager over. He finally got it to work. Low-fat milk, I guess. Really low-fat since she took a sip walking to the car and threw it in the trash saying the milk was bad.
McDonald’s built their business on consistency. Franchisees made so much money they toed the line with the company rules and regulations like standards of cleanliness, quality of service, etc. It isn’t only the Kalamazoo store, it’s the entire system. The CEO is toasting the wrong buns. Franchisees who have fallen off the standards wagon need to get back on or go away. If that doesn’t happen, this will be a sad future for yet another once-great organization.
When I see this I think of Portillo’s. The owner and founder of this Chicago-based chain just sold his stores to Warren Buffet for more than a billion dollars. When Mr. Portillo opened his first Arizona store in Scottsdale a couple of years ago it served 10,000 customers the first day of operation. The average store sells 2 1/2 times the average McDonalds. He was a stickler for details. He was McDonald’s 50 years ago. He sold because he wanted to see the chain go nationwide and he didn’t have the capital to make that happen.
This isn’t Buffet’s first rodeo when it comes to retail food stores. He has owned Dairy Queen for years. There isn’t a chain anywhere in the United States with lower standards than Dairy Queen. If you walk up to a window you smell sour ice cream. If you walk in, it’s worse. Never, never use a rest room in a Dairy Queen, assuming one is available. Flies, do they have flies. Sour milk from stale ice cream attracts flies like horse manure. Buffet will franchise Portillo’s into a new version of Dairy Queen. Rick Portillo will wish he had sold it to someone else. But, a billion dollars can make up for a lot of disappointment. Here’s the solution, just never go in one of your stores again and you won’t experience what Buffet has done to them.
Now that McDonald’s has joined the ranks of pig sties on the interstate, where do we pee?
