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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A quarterly survey of McDonald’s franchisees shows operators are more pessimistic than they were three months ago, when the same poll found McDonald’s operators had the worst outlook in the survey’s 12-year history. And McDonald’s recent announcement of its plan to serve breakfast all day could make things worse.
The survey, conducted by industry analyst Mark Kalinowski and released last week, recorded its lowest-ever ratings, both on franchisees’ financial expectations and their relationship with McDonald’s corporate.
The survey also revealed skepticism about McDonald’s CEO Steve Easterbrook’s ’s turnaround plan, announced in May, which calls for streamlining McDonald’s corporate structure, cutting menu items to speed up service, and removing antibiotics and complex ingredients from food items.
But what about recent news that McDonald’s may soon roll out breakfast all day?
An all-day breakfast menu will require additional equipment and investment from franchisees whose coffers have been drained by corporate-imposed capex projects in recent years. One franchisee noted, “All the re-investments over the last five years with MRPs [major remodel projects], rebuilds and kitchen and lobby remodels – not to mention the McCafé and blended ice machine remodels – have absolutely killed the operator’s equity in their business.”
A former McDonald’s franchisee and current industry consultant argues that that all-day breakfast will only work if the current rest-of-the-day menu is significantly reduced.
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