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Why Are McDonald’s McFranchisees Mad?

McDonalds worker in the early 80's

For a dollar, I’ll tell you why McDonald’s franchise owners are mad.

(This post may contain affiliate links. Please read my disclosure policy).

I’m McKidding.

One reason that McDonald’s franchisees are mad is the recent news out of corporate.

 

For the first time in a decade, McDonald’s first quarter sales in the US have dropped.  

 

What’s the deal with that?

Everyone in the US can afford to eat at McDonald’s, right?

Right?

 

And, McDonald’s franchise owners can afford to pay higher wages, right?

You should read this New York Times article.



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McDonald’s Franchisees And Their Dollar Menu Woes

The reason that most Americans can afford to eat at their local McDonald’s restaurant has to do with price; there are a lot of menu items that can be purchased for a dollar.

While the Dollar Menu is good for consumers, it’s not so good for McDonald’s franchisees…and their relationship with the executive team in Illinois.

According to Nations Restaurant News, “Frustration over discounting has kept the franchisor-franchisee relationship strained, according to the results of the operator survey. When asked to rate that relationship on a 1-to-5 scale, with 1 meaning ‘poor’ and 5 meaning ‘excellent,’ the franchisees produced an average response of 1.93. “ Read more

 

Big Mac’s Are Big Money

You’re welcome to give me crap about eating fast food. Anyway…

The last time I motored up to my local McDonald’s Double Drive-Through, I was amazed.

Dinner for three was almost $20.

Now, remember, I live in Cleveland, Ohio…not New York City. Our cost of living is almost reasonable.

But, still…$20?

A Big Mac was $4.00. A large fry was almost $3.

That’s a lot of money for fast food.

 

Profit McMargins For McDonald’s Franchisees Are Dropping

McDonald’s franchisees keep insisting that their profit margins are getting lower and lower.



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But, it’s not like they’re paying their employees a lot of money-that can’t be the reason for it.

They’re selling Big Mac’s for $4.00 each-those must be profitable. Right?

And, the soft drinks?

They have huge profit margins.

$1 Double Cheeseburgers don’t.

I get it.

But, when it’s all said and done, McDonald’s franchisees are still doing pretty darn well.

So, why are they getting angry?

Is their anger what I call, “future-anger?”

Are they starting to get freaked out about Obamacare?

It’s coming.
Image courtesy of SportSuburban on Flickr

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joel libava

I'm The Franchise King®, Joel Libava. I help prospective franchise owners avoid bank account emptying mistakes. For over 20 years, I’ve been helping people make smart, informed decisions on franchises to buy, and I can help you, too! #thefranchiseking
“The fantastic thing about Joel is his neutrality. Because he is not getting an incentive fee, he will always give you the advice that you need (even if not what you necessarily want) and that's pretty unique these days. Thank you Joel!"
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