What is in this article?:
- McDonaldâs operator survey suggests same-store sales lift
- 'Maxed out' in the U.S.
Franchisees also express dissatisfaction with the chain's coffee giveaway, menu changes and plans for unit growth.
'Maxed out' in the U.S.
When asked to rate their six-month outlook for their businesses on a five-point scale, in which a score of 1 meant “poor” and 5 meant “excellent,” the 27 McDonald’s franchisees produced an average outlook of 2.21, or between “fair” and “good.” That number was well below the survey’s historical average of about 2.90 but a slight rise from the 1.89 rating from the fourth-quarter survey in January.
Janney also asks surveyed franchisees to rate their relationship with McDonald’s Corp. using the same scale. Their collective result was 1.73, below the survey’s usual range between 2.10 and 2.20, but a slight improvement from 1.70 three months earlier.
“In general,” Kalinowski wrote, “we argue that corporations who have franchisees on board and enthusiastic about senior management’s plans and strategy tend to fare better than those that don’t enjoy this type of situation.”
One point of contention seemed to be the pace at which McDonald’s USA plans to continue opening new restaurants, the survey found. When polled on their thoughts regarding McDonald’s projected openings of 250 domestic restaurants, 17 of the 27 franchisees responded that this growth rate was too fast, with only seven respondents saying it was about right. One franchisee said the pace was too slow.
“There are already too many [McDonald’s units],” one franchisee reported. “We cannot build a $2.5 million restaurant and then say we are trying to compete with a $500,000 coffeehouse or doughnut shop or burrito place, especially when they are going into every vacant shopping center place.”
Another agreed that McDonald’s was built out, saying, “Let’s not repeat the 1990s by recklessly building stores to impress Wall Street.”
“We need to realize that, store by store, McDonald’s in the U.S. is pretty well maxed out,” another franchisee said. “We will be lucky to maintain our current average unit volumes over the next few years.”
The 27 respondents represent approximately 1 percent of the more than 2,500 McDonald’s owner-operators in the United States, and their 219 restaurants roughly equal 1.5 percent of the chain’s more than 14,000 domestic locations.
McDonald’s operates or franchises about 35,000 restaurants in more than 100 countries.