Zerohedge -McDonald's Franchise Owners Admit Fast Food Giant "Facing Its Final Days"

Undersize Me? McDonald's Franchise Owners Admit Fast Food Giant "Facing Its Final Days"

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Submitted by Tyler Durden on 10/18/2015 12:00 -0400

• headlines
• McDonalds
• Nomura
• Transparency

Having seen the writing on the $15 minimum wage wall...
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h/t @TopherCarlton

And given the new 'lack of transparency' following McDonalds' managements' decision to stop reporting sales numbers monthly...

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It appears McDonalds' franchie owners are voicing their concerns... rather ominously... as TheAntiMedia.org's Nick Bernabe reports,
Embattled fast food giant McDonald’s is making headlines yet again. The company has just launched its much advertised all-day breakfast program, but as that campaign rolls out, franchise owners are voicing their concerns over what may be the company’s dying days.
As we covered at Anti-Media in June, the McDonald’s franchise has been shrinking for the first time in the company’s over 40 year history:

“McDonald’s announced in April that it would be closing 700 ‘underperforming’ locations, but because of the company’s sheer size — it has 14,300 locations in the United States alone — this was not necessarily a reduction in the size of the company, especially because it continues to open locations around the world. It still has more than double the locations of Burger King, its closest competitor.”

However, for the franchisees, the picture looks much worse than simply 700 stores closing down.

“We are in the throes of a deep depression, and nothing is changing,” a franchise owner wrote in response to a financial survey by Nomura Group. “Probably 30% of operators are insolvent.” One owner went as far as to speculate that McDonald’s is literally “facing its final days.”

Franchisees have also been complaining about the erratic nature of McDonald’s corporate decision-making process. As Business Insider reports,

“The lack of consistent leadership from Oak Brook is frightening, we continue to jump from one failed initiative to another.”

They are likely referring to the company’s many marketing schemes that have been implemented recently to slow the bleeding of younger customers as they choose healthier, more local options en masse. As Anti-Media also reported in June,

“Though the chain has dominated the fast food market for decades, recent competition and health consciousness has challenged the popularity of its product. The growth of chains like Chipotle, which recently stopped using genetically modified ingredients, has reportedly diverted customers away from McDonald’s. Additionally, the company is losing a share of its young patrons while the rise of boutique burger chains such as Five Guys has put a dent in profits.

[…] The increased closures denote a growing shift in dietary preferences among Americans. This is consistent with recent moves by fast food chains to remove toxic chemicals from their ingredients, as well as with the exponential growth of organic, healthy alternatives.”

Are we seeing McDonald’s final days? If the trend towards healthier alternatives to McDonald’s continues, it’s a very real possibility.
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Sun, 10/18/2015 - 12:09 | 6681898 JustObserving
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Selling toxic, tasteless food to your customers is not a viable business model.
Lab Tests: McDonald’s ‘Devastates’ Gut Health In 10 Days Subject also 'turned strange grey' color We all know food at McDonald’s is virtually unfit for human consumption. Now, disturbing new lab results have reportedly demonstrated the true extent of the damage you are doing to your body when you eat fast food. Specifically, we’re talking about the ‘devastation’ of your gut health — the attack on the most important part of your biological immune response.
In just 10 days of consuming Big Macs, chicken nuggets, fries, and Coca-Cola, Spector’s son was found by laboratory fecal testing to lose nearly 1,400 types of bacteria species from his gut – that’s nearly 40% of his total variety. What’s worse is that these did not return after he switched back to a normal diet.
http://naturalsociety.com/lab-tests-mcdonalds-devastates-gut-health-in-1...

This 20-Year-Old Burger From McDonald’s Looks Brand New http://www.buzzfeed.com/hannahjewell/this-20-year-old-burger-from-mcdona...



http://www.zerohedge.com/news/2015-1...its-final-days

I have to make this post take up space at the top of this forum page because we have Copy/Posters who don't read and/understand what they
post as they Copy/Paste their efforts of Click-4-Bucks.

Definition -
Copy/Paste - cop'-e- paste v. - A regurgitation of Mainstream Media Narrative that is used on social media for profit and/or to emulate a knowledgeable person over the internet so they wont be in a face to face situation so they wont be forced to give their opinion which would expose their ignorance.

I will let this copy/paste go, even if it dosent even mention anyting about the Stock Buy Backs or stoping of reporting monthly sales in July 15 untill or WHEN IS THE LAST TIME YOU ATE AT A MCDONALDS? But MF is a reputable Stock site.



Why Is McDonald's Stock Soaring When Its Business Stinks?

The burger joint has been defying gravity, but reality may soon set in.

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Rich Duprey
(TMFCop)

Oct 19, 2015 at 5:20PM



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Despite falling sales, McDonald's stock keeps hitting new all-time highs, defying logic and gravity, but there may be a reckoning coming.
You'd never know by looking at McDonald's (NYSE:MCD) stock that its business was in deep trouble.
Sales are in the midst of a three-year slump, its international business is falling alongside domestic operations, and now its franchisees appear to be on the verge of open revolt following what is being described as a shaky national rollout of the new all-day breakfast program. Yet McDonald's stock has never been better. Shares are up 15% so far in 2015 and have jumped more than 20% over the past year, hitting an all-time high of $104 a stub.
So, why the disconnect between how the business is going and what the market's response has been?
99 problems
The problems with McDonald's are legion. The growth of better-burger shops like Shake Shack and In-N-Out Burger helped siphon away customers while higher commodity costs, particularly beef, hit earnings. Then there are the higher labor costs McDonald's is incurring due to unilaterally increasing the minimum wage of its employees.
Despite CEO Steve Easterbrook's pledge to transform McDonald's into a "modern, progressive burger company," sales are still falling. Global comparable sales fell 0.7% in the second quarter and were down 2% in the U.S., the seventh straight quarter comps fell. It's reporting third-quarter sales this week, and no one's expecting much -- if any -- improvement.
Still, there are some reasons McDonald's is able to maintain a lofty stock price.

• Still profitable. Despite its troubles, McDonald's remains a highly profitable business, generating over $2 billion in net profits in the first six months of 2015, and almost $4.8 billion last year.
• Global footprint. There are about 35,000 McDonald's restaurants worldwide, 14,000 in the U.S., that, should it get the formula right, can quickly turn things around.
• Substantial marketing power. McDonald's is still the straw that stirs the drink in fast food, and even doing something small has a large impact on how the competition responds.
• A sickbed, not a deathbed. The burger joint's business is broken right now, and though many of its prescriptions seem wrong-headed at the moment, we're not witnessing McDonald's last days.

In short, the reason McDonald's stock continues to soar is that investors realize it will only take small steps to make a dramatic difference, and they continue to expect CEO Easterbrook to come through.
A blind spot
Yet that can prove to be their downfall. All they need to do is look at Yum! Brands (NYSE:YUM) to see how quickly things can unravel.
The owner of KFC, Taco Bell, and Pizza Hut is in many respects similar to McDonald's: both have a large, global presence, and aside from the burger chain, only Yum! Brands has successfully tapped into the fast-food market in China. In fact, it's the largest fast-food chain in that country, with more than 6,800 restaurants (McDonald's has less than a third of that number).
Yum! Brands is undergoing its own set of troubles. While it's U.S.-based Taco Bell chain has largely been performing ahead of expectations, particularly with the introduction of a breakfast menu that's challenging McDonald's ownership of the daypart, much of the rest of its operations have been sluggish at best, and only just recently has it begun reporting better results.
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Not many restaurants have been able to successfully break in China's market, but both McDonald's and Yum! Brands have.
Overseas, though, is a different story, especially in China, which accounts for more than half of Yum! Brands revenues and a third of its operating profits. When it was hit by its second food scandals in as many years last year, Chinese customers fled in droves. But management maintained a brave front for investors, saying it expected customers to return in the back half of this year, and it would hit its 10% earnings growth target.
Shares of the restaurant operator soared, peaking at a record high of $95 each. This lasted until Yum! Brands reported third-quarter results and was forced to admit its recovery in China was going much slower than expected, and rather than 10% growth, earnings would only expand in the low single digits at best. Then its stock cratered, falling 20% in a day, and has lost a quarter of its value from those highs.
The coming comeuppance
McDonald's investors have been forewarned. With the chain reporting earnings this week, and expectations elevated that Easterbrook's reforms will start gaining traction, the market may be sorely disappointed if they fail to materialize.
It's been my contention that McDonald's under Easterbrook is on the wrong path, that Shake Shack and Chipotle Mexican Grill are not its main problem. McDonald's attempts at emulating them are doomed to fail because it's always been viewed as a value meal, and customers won't want to pay up for fast food.
But that doesn't mean McDonald's is going out of business. It only means investors who were hoping for a change in direction from a few of the ideas management has been throwing at the wall may find the stock going in the opposite direction instead.