

Why McDonald's wins in any economy - dko
http://management.fortune.cnn.com/2011/08/23/why-mcdonalds-wins-in-any-economy/

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hernan7
Am I the only one that found that French fries illustration to be terrible?
Cheesy picture that purports to be a "chart", that shows 2 values, plus the
cryptical legend "French fries do not reflect actual earnings-per-share
gains." And I'm not even much of a Tufte fanatic myself.

<http://en.wikipedia.org/wiki/Chartjunk>

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hammock
It's worse. If you look closely, it's really one data point not two, since the
value is not given for the lower french fry. By the way, that footnote is
hilarious.

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teyc
One thing I admire McDonald's is its willingness to train its workers. One of
my colleague's teenage daughter worked for McD's when she was in high school,
and later worked for another fast food joint and she was able to identify many
operational inefficiencies.

Another thing is McDonald's never got stuck in the idea that its core brand is
about burgers, or expanding its menu is bad mantra.

The McHappy meals for example, guaranteed regular clientelle because of its
collectibles. But the parents didn't want burgers. So the business altered its
menu to keep the parents happy.

In contrast, Burger King's menu has remained static.

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shrikant
Reminds me of this excerpt from _Iacocca_ :

 _[...] my father had opened a hot-dog restaurant called the Orpheum Wiener
House. It was the perfect business for somebody without much cash. All he
really needed to get started were a grill, a bun warmer, and a few stools.

My father always drilled two things into me: never get into a capital-
intensive business, because the bankers will end up owning you. (I should have
paid more attention to this particular piece of advice!) And when times are
tough, be in the food business, because no matter how bad things get, people
still have to eat. The Orpheum Wiener House stayed afloat all through the
Great Depression._

~~~
randomdata
However, food production was one of the worst businesses to be in during the
great depression. Food prices plummeted to well below cost of production
rates. Combined with some extraordinary environmental events around the same
time, farmers were hit hard – really hard.

However, in this recession, it is one of the best businesses you can be in.
Prices haven't been this strong in a long, long time. Goes to show there are
no absolutes in life.

~~~
jackpirate
The farming and restaurant businesses are completely different. Low food
prices hurts farmers, but helps restaurant owners.

~~~
randomdata
Absolutely. They are, however, both in the food business, which is what the
quote said to be in. As seen by the farmers of the time, the fact that people
need to eat doesn't mean that you will survive hard times.

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apaprocki
Business might be great, but TIL McDonald's borrowed $109M directly from the
Fed as part of the Commercial Paper Funding Facility invoked after the Lehman
collapse and was in debt to the Fed for 223 days.

[http://www.bloomberg.com/data-visualization/federal-
reserve-...](http://www.bloomberg.com/data-visualization/federal-reserve-
emergency-lending#/McDonald%27s_Corp)

~~~
tptacek
Does that suggest something about the precariousness of MCD's business model
or about the severity of the credit crisis?

~~~
apaprocki
You'd have to dive into their business to figure out if they would have been
in deep trouble without public money or if they were literally eating _our_
lunch. Personally, I'm not sure a fast-food chain should be receiving money
from the Fed, but hey...

~~~
tptacek
400,000 employees, for a start.

~~~
apaprocki
Looking at their financial sheet, I'm not sure any of their business would be
affected if they had to pay more for this measly $109M. Their profit and
positive cash flow is in the billions per year. At some point (and higher
rate), _someone_ would loan McDonald's $109M, no? Why wasn't this just left up
to the market?

~~~
eru
McDonald's probably has some lobbyist of their own.

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grimen
McDonalds has a really bad rumour in Sweden. Yes people eat there, but people
are starting to change mindsets I've noticed. Subway and such a bit healthier
alternatives are becoming more popular.

Wort to notice is that what McDonalds is earning money on is not really the
food, it's the real estate and speculation around these. IKEA do the same
thing: "We want t build a building here" - who wants to have a store nearby?
_bids_ by other companies and regions who want people to come there more often
and pay tax.

~~~
roel_v
How long have there been Subway franchises in Sweden? More people are going to
Subway here (Netherlands) too, but that's just because they're only now
starting to open more shops.

Furthermore,
[http://sverigesradio.se/sida/artikel.aspx?programid=2054&...](http://sverigesradio.se/sida/artikel.aspx?programid=2054&artikel=4596465)
says that you're flat out wrong - 2010 was a record year for McDonalds
turnover in Sweden. Unless you have data on McDonalds' image and the result of
that on its turnover in Sweden, don't take your impressions of certain
phenomenons as fact because it's sure to suffer sample bias.

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typicalrunt
"win" being the operative word here.

 _cost-conscious consumers are flocking to fast-food eateries_

The economy isn't doing well at all, and people are flocking to the cheapest
alternatives. That's why Walmart, Dollar Stores, and McDonalds will always do
well in desperate times.

It would be nicer to see people purchasing raw ingredients and cooking food at
home. I can't imagine the amount of bad health effects that are going to hit
the nation in 10 years if this behaviour continues.

~~~
bad_user

         It would be nicer to see people purchasing raw 
         ingredients and cooking food at home
    

I'm trying to do that, but it's pretty hard and time consuming.

I don't know how people do it -- I mean, I can cook and sometimes it is
delicious, but it's nothing worst than waisting 2 hours on something and then
at the end to find out that I blew the dish for some reason.

I also cannot eat the same food for more than 2 days in a row.

So if anybody knows some book on food recipes that are easy to cook, I'd be
grateful -- keep in mind though that I'm a carnivore that hates pizza/pasta
(love grilled stuff :)).

~~~
shpxnvz
_I don't know how people do it -- I mean, I can cook and sometimes it is
delicious, but it's nothing worst than waisting 2 hours on something and then
at the end to find out that I blew the dish for some reason._

Don't you ever spend a couple of hours trying out an idea in code only to find
out later that it's a complete wash? Making mistakes in cooking is no
different from any other activity - it can be a valuable learning experience
if you recognize it. Plus, in cooking, you can _usually_ still eat your
mistakes.

~~~
spydum
I think many people don't find cooking fun, it's like laundry or doing the
dishes: it's a chore. I wonder if this is due more to cultural influences than
anything. It seems there are plenty of other cultures (mostly European) that
seem to really enjoy cooking, and so you find it more often in those places.

~~~
shpxnvz
Yeah, that's a good point. I suppose I figured that, at least in this
community, people would tend to view cooking as a creative endeavor not unlike
hacking, rather than some menial repetitive task. Different strokes.

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ww520
Has anyone own or run a McDonald franchise? How's the experience? Does it
require lots of work? Or just require passive monitoring? How's the cost vs
payout?

~~~
sgoraya
My father's/family friend opened a McDonalds franchise about 20 years ago. He
needed to have approximately $350k, 'non-borrowed' cash on hand to be
considered as a franchisee.

> How's the experience?

It must be good because he now owns 4 McD franchises. All his kids worked
there through HS and (some) college. His son is the "Manager" of all 4.

> Does it require lots of work?

I think after their first couple of restaurants, they have developed and
refined their management system. The son works a typical work week floating
between restaurants and balancing books, hiring managers, etc.

> Or just require passive monitoring?

My fathers friend was at the first restaurant from almost open to close
everyday for several years. (I used to ride my bike there for free ice cream
and he was always there). The son seems to have enough free time - its almost
like a 8-6pm type job for him.

> How's the cost vs payout?

He and his family are very well off and have been able to invest in other
money making areas as well. A lot of hard work on the front end but now he has
4 cash cows that his son manages.

~~~
ww520
Thanks. That's very good info.

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Gravityloss
AFAIK they've never been profitable in my country, though it might be an
accounting trick...

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sesqu
That's a common rumour in Finland, at least, but they've posted 3 profitable
years (out of 26). I don't know about their accounting, but I find it
plausible that they'd want to maintain a presence at a small loss.

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chaostheory
This reads like a submarine PR article for McDonalds and Jim Skinner.

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athst
I like the idea of supporting your managers in front of employees even if you
don't agree. Address it later in private so you don't undermine them.

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Tichy
I wonder how long those salads would hold up before they decay visibly :-/

