Talk Stock Trading’s Loving That McDonald’s
(FranchisePick.Com) Over at b5’s Talk Stock Trading blog, Profsilver is lovin’ that McDonald’s:
McDonald’s reported profits of $1.19 billion on revenue of $6.08 billion, both figures well above the consensus of analyst expectations of $985 million and $5.92 billion, respectively.
Domestically speaking, the fast-food giant has benefited from new menu items and longer hours, as well as tough economic conditions. McDonald’s provides a relatively cheap alternative to other dining out options.
On the international scene, McDonald’s execs reported ”double digit operating income growth” in Europe, Asia, Africa and the Middle East.
Everybody loves to bash McDonald’s, but they keep pulling in the drive thru, don’t they?
WHAT DO YOU THINK? SHARE YOUR THOUGHTS BELOW.
_________________________
Unhappy Franchisee: Franchising rumors, rants, controversies, issues, complaints & insider information you’re not supposed to know.
Unbiased franchise information, franchise interviews and detailed, searchable information on 400 franchise and business opportunities.
Franchisees, customers & experts vote for their favorite new franchises at Top New Franchise: Who’s hot. Who’s not.
Related Stories
POSTED IN: McDonald's
2 opinions for Talk Stock Trading’s Loving That McDonald’s
Carol Cross
Jul 23, 2008 at 3:39 pm
Unfortunately, even as McDonald’s proven great success as a franchise for both the franchisor and the franchisees and multiple unit franchisees of its system is inspiring, McDonalds doesn’t represent the norm in franchising. While all franchisors would like to duplicate the success of McDonald’s and go public with an IPO, the majority of new franchises in the QSR sector go belly up and their franchisee resources are destroyed in failure because of the personal guarantees they are required to post to qualify for loans to buy franchises. Do banks and lenders require business plans to approve loans to build a McDonald’s or does the visibility of McDonald’s in the economy negate the need for the bank to do due diligence on McDonald’s?
The SBA, of course, requires a business plan to guarantee a loan but how can business plans be prepared when franchisors routinely do not disclose unit performance statistics of their systems?
(The SBA subdizes franchisors because a franchisee is actually NOT a small business person in the true sense of rhe word and the SBA acknowledges this fact. A franchisee is merely leasing the brand name of a business as an investment vehicle under a finite contract in which the franchisor owns the gross sales under a binding and usurous contract in which the franchisee produces gross sales by building and operating a business on which to hang the brand name. The SBA and the tax payers subsidize big business through the subsidy of the franchisee who can qualify for a government guaranteed loan, even as his franchisor himself cannot qualify for a guaranteed government loan because legal pyramid sales schemes like franchises are not eligible for government guaranteed loans. In a sense, the franchisees act as collateral on which the franchisors are approved for loans.)
McDonald’s remains a favorite of the public because of its devotion to families and to pricing that families and singles can afford. While the QSR sector is saturated in most markets, McDonald’s maintains its favored position and ever grows market share in times of recession because McDonald’s has become an American and World Standard that is trusted throughout the World for quality and price.
McDonald’s could disclose the unit performance statistics of their system and still recruit new franchisees, no doubt! If McDonald’s can survive the disclosure of unit performance statistics to new buyers of their franchise, why don’t they do this? Wouldn’t this help them to drive out even more of their competitors and grow their market share? Isn’t this the name of the game?
What am I missing here? Are unit performance statistics not considered MATERIAL by the government regulators for new buyers of franchises because the competition between franchisors of the same and similar concepts to recruit franchisees would mean that some competitors would be driven out of the market at a faster pace? — And, this faster pace of elimination through competition would mean that there would be some constraint on the growth of franchising,
While the stockholders of McDonald’s have reason to feel safe, should the stockholders and investors in franchisors who turn and churn and encroach on their own franchisees out of view of the public and the regulators feel safe when franchisors are not mandated to share the unit performance statistics of their systems with the public?
Zomi
Jul 23, 2008 at 8:59 pm
In Asia, the Mac enjoys thriving business. In the Philippines, in particular, they’re the only fastfood that could give the behemoth Jollibee Corp. a run for its money.
The bee versus the clown — it’s a fascinating match, really.
Have an opinion? Leave a comment: