Expanding All-Day Breakfast Strains McDonald’s Franchisees

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In a move franchisees fear will create even more operational headaches, McDonald’s is now offering its full breakfast menu all day at over 150 locations in the Tulsa, Oklahoma area and the Triad region of North Carolina, and is adding McGriddles to the all-day menu at 1,000 additional stores throughout the South.

When the chain launched all-day breakfast in October, it limited the breakfast menu after 11:00 AM, in part to reduce the operational complexity associated with executing over 100 menu items. Even with the limited menu, franchisees reported backed up kitchens, with one franchisee describing “people falling over each other and equipment jammed in everywhere.” Operational complexities lead to staffing concerns, with one franchisee worried that all-day breakfast would require additional hiring, and another noting that the program has “caused management turnover, and crew turnover out of frustration.” One franchisee felt her store would lose customers over the initiative because of slower service times and lower quality food.

If McDonald’s moves forward with a fuller breakfast menu all day, it may only create more difficulties for franchisees. For example, owner/operator LeAnn Richards, who led a task force on all-day breakfast, points out the complexity of serving just one of the breakfast items,

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Why Aren’t More Franchisees on Company Boards?

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A blog post on the Nation’s Restaurant News site has raised a great question: “Franchisees spend a lot of time and energy, and their own money, investing in a brand. So why aren’t more of them on company boards?”

As NRN’s Jonathan Maze noted, franchisees’ interests are not always the same as franchisors:

“…franchisors make their money from franchisees’ top-line revenues because they take a percentage of those revenues as royalties. Franchisees prefer making a profit. And they prefer simpler operations. Those can go against what a brand might want.”

As we reported, this summer restaurant chain Famous Dave’s added California franchisee Anand Gala to its board. “As more brands move to an all-franchise model they have very little skin in the game,” Gala told NRN recently, explaining the importance of the franchisee perspective. Continue Reading

McDonald’s Ever-Changing Customization Plans

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In the latest of a series of customization reversals, McDonald’s launched “Taste Crafted” burgers in over 600 Southern California restaurants in December. The move comes barely two months after the company announced it would retool and rename the program “Chef Crafted” because “the original name ‘TasteCrafted’ did not resonate with consumers.”

Both Taste Crafted and Chef Crafted offer consumers a limited selection of buns, toppings and proteins to mix and match. In late September the company said it would test “Chef Crafted” in 200 stores while “a few locations” would still offer Taste Crafted.

The fate of McDonald’s more ambitious burger customization scheme, “Create Your Taste,” is unclear. It offers dozens of ingredients and hundreds of combinations of bun, meat and toppings, ordered on a kiosk screen and delivered to the table. McDonald’s has implemented Create Your Taste throughout Australia and had announced plans to introduce it in up to 2,000 U.S. stores in 2015. Many franchisees balked at the $125,000 price tag and additional operational complexity of Create Your Taste. McDonald’s backed off the goal of 2,000 Create Your Taste locations, saying that “we’re not going to set a specific number in the U.S.

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McDonald’s pushes new version of dollar menu

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McDonald’s is bringing back a version of the dollar menu, which the company abandoned in 2013 after years of franchisee complaints that it was unprofitable. McDonald’s says franchisees “voted” to approve the new McPick 2 promotion, which starts January 4 and offers any two of a selection of four menu items for $2.

McDonald’s said McPick 2 “gained a ‘high majority’ of franchisee votes, although it declined to provide details,” according to the Associated Press. “When asked whether franchisees in regions with higher costs such as New York might lose money on the offer, [company spokesperson Deborah] Wahl said the deal is designed to drive customer traffic into stores.”

But will driving traffic through a program like McPick 2 be good for franchisees? As Nation’s Restaurant News has reported, many franchisees believed that the traffic driven by the earlier incarnation of the Dollar Menu was not profitable for them and that they would have been better off without it.

McPick 2 will run for about five weeks, and local markets will be able to extend the platform.  It comes on the heels of the “Dollar Menu and More,” which McDonald’s launched at the end of 2013 and which reportedly confused consumers with its many different price points.

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