L.J. Devon — Natural News Oct 30, 2015
McDonald’s is trying everything to keep customers flocking through their doors, but the brand, the product and the strategy continue to falter. Many McDonald’s franchisees say the brand is suffering from a “deep depression” leading to the “final days” of the once popular business model.
Nomura analyst Mark Kalinowski sent out surveys to 29 McDonald’s franchisees in the United States, spanning 226 restaurants in total. Many of the owners’ responses clearly show that the McDonald’s fast food empire is entering its final days of dominance.
“We are in the throes of a deep depression, and nothing is changing,” said one franchisee. “Probably 30% of operators are insolvent.”
Franchisees speak out against McDonald’s core problems
Over a dozen franchisees lashed out at corporate management, calling CEO Steve Easterbrook’s new marketing initiatives a distraction from the core issues that plague the McDonald’s business model. New initiatives, like the all-day breakfast and the placement of new digital ordering kiosks, do not address the real problems at McDonald’s.
One franchisee wrote, “The lack of consistent leadership from Oak Brook is frightening, we continue to jump from one failed initiative to another.”
The franchisees admit what the core problems are; it’s the quality of the food and the customer service. The all-day breakfast plan has only made the menu and kitchen operations more complicated. Initiatives like these don’t address the food’s lack of quality or the type of ingredients customers are rejecting.
Consumers are growing wary of products like the 19-ingredient French fries and hamburger meat that likely come from cows raised in confined animal feeding operations (CAFOs). Likewise, consumers are increasingly rejecting genetically modified ingredients and flocking to new business models as a result. After announcing that they will no longer be using genetically modified ingredients, up and coming fast food company Chipotle saw a meteoric rise in revenue, while expanding their business model in 2015. Chipotle, which has consistently been setting higher standards, has already opened 48 stores this year and plans to introduce at least 190 more, according to CEO Steve Ells.
McDonald’s business model dying out
One franchisee responded to the survey by detailing how the McDonald’s model is quickly becoming a thing of the past. “The CEO is sowing the seeds of our demise. We are a quick-serve fast-food restaurant, not a fast casual like Five Guys or Chipotle. The system may be facing its final days,” he wrote.
Another franchisee said that the corporate office is not listening to franchisees and is instead telling them to just “get out of the system” and quit.
McDonald’s boasts of over 14,000 restaurants in the US; however, the fast food juggernaut has seen seven straight quarters of same store sales declines. McDonald’s has been making changes to see what could work. Some of their recent changes are a step in the right direction, like their announcement to remove antibiotics from their chicken sources.
It it may be too little, too late, however, for a brand that is dying off in the hearts of consumers who now turn to other fast food chains for higher standards and better service.