McDonald's Abuse Of Operators (& Why 40% Are Going Bankrupt)
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- čas přidán 29. 06. 2024
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For decades, McDonald’s operators have put up with their one-sided policies and antics, but it looks like Covid was the last straw for many operators. Within the past few years, 28% of all McDonald’s were either shut down or sold off, and that’s not including the ones that were shut down due to the Russia situation. But, why are so many operators quitting the business? Well, McDonald’s likes to say that it’s just pent-up demand from the pandemic, but the real reason seems to trace its roots back to some expensive remodels in 2018. McDonald’s required that all operators remodel their stores to incorporate new furniture, new decor, remodeled counters, exterior redesigns, digital kiosks, and reimagined drive-thru lanes. While this was feasible and even lucrative for stores that were performing well, these remodel jeopardize the livelihoods of as much as 40% of operators. Operators have also become wiser about how McDonald’s really makes money. The truth to McDonald’s success isn’t actually selling food, but renting out locations to operators for top dollar. This video explains the top grievances of McDonald’s employees and why McDonald’s operators are leaving in droves.
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Timestamps:
0:00 - McDonald’s Exodus
2:58 - Expensive Remodels
6:26 - Facade Of A Partnership
9:36 - Ugly Breakup
12:23 - The Future Of McDonald’s
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An operator or franchisee told me that as soon as the restaurant became profitable...Mcdonalds pushed him really hard to sell the business. They are very smart making you take all the risks and handing out the fruits of the labor on a silver platter.
You think that is bad? In India, they muscled out the Indian franchisee after he had spent around two decades building up the brand from scratch. And it affected nearly two dozen locations
This is common, subway is even worse.
@@Confucius_Says... outrageous!
I stopped eating at McDs when the beef of the QP turned to nasty garbage.
@@mikepekala832 McD's exists for one reason and ONE REASON ONLY, and that is profit maximization for Warren Buffet. Everything the man touches, eventually turns to shit.
When you become a customer instead of a business partner, you know you are getting the bad end of the deal.
Facts
Sheeeesh
Maccy's was taken over by investment firms years ago, they just want profit from the name to pay dividends...
Mobility operators
You think ppl feel like a customer for that. Then don't try and run your own business. Small business spend 100% of there so called money on renovations
Also, do not forget that during the remodels, the operator does not have any income from the store. Our local store was down for a year due to remodeling.
Ah very true
@@LogicallyAnswered I recall when my local mcdonalds was remodeled in south africa. In our country we have a sort of construction mafia that wants a cut of all construction work. the store was closed for over a year due to these sort of issues. I know from talking to the owner that it was one of the most profitable ones, but he had to take on massive loans in order to keep the business.
@Ask Grant We actually have the exact same thing in the US, except they all work for various government agencies with redundant jobs, regulations, taxes, and inspections.
@@tedkaczynskiamericanhero3916 very true
I can not fathom why operators would put money into land they do not even own as most people who are craving mcdonalds do not even care what it looks like as long as it appears clean...
McDonald's lost all personality with the remodelling. It went from "a cool place to eat with your family" to "bland corporative food chain you eat sometimes on lunch break"
It was tacky as fuck.
Exactly I worked for them for 12 years after the “remodel “ of ours to resemble Starbucks the quality of the original Mc Donald’s slowly began its decline.
Yeah they lost their personality , but they wanted to lose it. They wanted to lose the clown , kid circus colors.
And be more hip for young adults to eat at.
They wanted to be more respectable. like Starbucks
McDonald’s was never a cool place to eat wtf kind of corporate shill nonsense is that. You are a drone who fell for the nostalgia of a corporate brands identity. Wake up, and stop reminiscing about a fucking fast food place.
What's happening to Subway is probably a good indicator for how things will go for them if they continue to treat thier franchisee like this.
Facts
What happened to Subway?
What Subway is doing to their franchisees is far worse.
@@ZeeengMicro Search john oliver subway here on youtube, you will learn a lot.
@@ZeeengMicro They're a dying business, where no one wants to eat, and many of the restaurants are closing down. They've been closing down around a thousand locations each year since 2018. It doesn't take a great mathematician to understand that they aren't going to exist for much longer at that rate.
That's crazy. $1-2 million to buy the franchise, $360,000 to remodel, $30,000 technology fee and you STILL need to pay McDonald's monthly rent?!!!!
That doesn't even factor in the mandatory ice cream machine vendor repair fees. 🍔🍟🍦
and you still are leaving out property tax, payroll taxes, income tax, property insurance, workers compensation insurance, hiring the staff, managing the staff, purchasing, maintenance, etc.
@@ObscureManifesto those are normal expenses that ANY business would incur, though. And a franchisee is NOT going to pay property taxes, since they don't own the property.
McDonald's Corporation is the property owner for more than 90% of all McDonald's franchises. This is all in the video. 🎥
@TuNnL incorrect, almost every mcdonalds is triple net. The tenant pays for property tax, insurance, and maintenance.
@@ObscureManifesto not saying you are lying, but generally, landowners pay the property taxes. It is public information that McDonald's owns more than 90% of the land under each McDonald's franchise.
McDonald's Corporation makes the majority of their money buying and selling real estate, which was sort of the point of this video. On the other hand, McDonald's "buys back" the franchise, so that seems to imply the franchisee owns the title to the property.
Definitely one of those "grey areas" worth looking into, but I would be skeptical, because as noted in the video, McDonald's does subsidize the construction costs. Technically, that means they could claim at least partial ownership of the property, and thus responsibility for at least part of the property taxes. 💁🏻♂️💰📜
I would rip them off every turn that presents itself. What's good for the goose is good for the gander. I'm not ur bitch!
When I worked at the Los Pollos Hermanos franchise, my boss Gus found a way around these issues.
I enjoyed the after-hours activities and field trips made available at Los Pollos Hermanos.
The Los Pollos Hermanos franchise owners were stand up guys. They donated to the local police and everything!
It must be his new secret recipe.
Gus was such a great guy. Stand up citizen.
If McDonalds disappeared tomorrow without a trace I wouldn't bat an eye
If McD disappeared tomorrow a ton of valuable real estate comes on the market in very desirable locations.
I would celebrate.
There's a rapidly growing list of companies I'd love to see go out of business. McDonald's is on there somewhere.
If McD disappeared tomorrow, the world will be a better place.
Period will.not be missed nasty ass fake food
McDonalds is pricing themselves out of the business.
Hey, I have an idea: let's get government to raise the minimum wage! $15/hr ain't good enough, so let's bump it up to $20/hr. What could possibly go wrong?
@@demef758If the only reason your business model succeeds is by keeping its employees in poverty, then your business model doesn’t deserve to exist - at the very least, not in the wealthiest country in human history.
@@demef758 we saw a help wanted sign for $20 an hour in the window of a local Japanese restaraunt.
They still couldn't find help.
They were closed and I don't doubt they close permanently, very soon.
@@demef758
Let’s keep repeating years, old, memes, and keep pretending they’re real.
No, you’re paying for the million dollar remodels. How much do you think that goes in to each burger?
Lies again? Terrible Service
Our way of life is catching up to us. I imagine in another 20 years we wont even recognize our country. Greed is destroying everything.
Exactly. We are set to have a great reset in our lifetime. Im jealous baby boomers never had to experience it. Hopefully sooner than later so I can enjoy my end of life knowing I left a better word behind like ww2 vets.
I'm not too huge on eating McDonald's. Didn't even know that the franchise system for McDonald's was that bad of a deal.
For real
I don't eat trash.
My body deserves real nutritious food.
Not many ppl think like u my friend salut
@@CordeliaWagner yes
Crazy that the restaurants only earn on average 150k profit per year. That's absolutely insane
I grew up going to, AND working at, this place. One day about 30 years ago I was at the counter ordering a Hamburger - .79 cents and I requested extra pickles which the gal attempted to charge me .30 cents extra for. I told her to keep it and I would NEVER be back. Fast forward 15 years and a friend bought lunch for us while we were working and, after 15 years of never going back, there it was sitting right in front of me - a Big Mac - which I will admit - I absolutely LOVED them growing up. When I opened the box I was stunned at how much smaller it was then what I remember them being but I quickly ignored that and grabbed the burger with surprising glee - This feeling, however, ended very quickly as soon as I bit into it. Beyond revolting. Unbelievable that they are actually able to label this as "Food". This company has one of THE largest R&D divisions of any company. They literally chemically screw with this "product" in order to give it a weird, almost addictive, quality. In 30 years The only time I EVER would go into one of these places now is to use the toilet. From what I leave behind it isn't too different then what they sell - Theirs just smells....different.
Their places stink like poison.
A lot of food at the grocery store is like that too
@@corvus8638 you are somehow buying groceries wrong
"When I opened the box I was stunned at how much smaller it was then what I remember them being"
Child of the 80's and 90's here. The shrinkflation and reduction in quality are real. With everything.
I agree I was telling my wife how small the burgers are now and The Taste is horrible compared to what they were in the day you want to try another burger that sucks try Burger King they suck bad lately cardboard meat
I'm glad someone finally covered this. It has been going on far too long. In Australia, the employees are treated poorly simply becayse the licensees are under massive financial stress. They only staff half as much as they should and who could really blame them? I've seen the contract they enter into and there is no backing out of it. You are forced to run the business for years or see massive losses. Imagine the time wasted just so you don't lose money on your investment, all that time you could spend investing elsewhere if you even have money after.
It's insane, corporate is squeezing everyones throats and people are complaining about the economy: renters, landlords, fed. WHAT ABOUT CORPORATE???
Things I learned working at MdConalds:
1. You need good workers who are willing to work. Replace the bottom half who slack off for good workers if you can, even if you have to pay a bit more.
2. Salt the burgers before pulling them off the grill. It makes them much better
3. Use the bin timer and throw food out when they expire. Fresh food is SO much better, especially for reg meat/quarter meat.
4. Night shift is a lot easier, but customers are NUTS :P
I'm tempted to call it "MdConald's" from now on.
Like, "Mid-Conalds".
So your plan is to get the best of the best workers, but pay the minimum wage. No wait pay them slightly above minimum wage. Most workers don’t stay at McDonald’s. You have constant turnover. Good luck, keeping your golden staff.
I make nowhere near six figures but if I invested 2M into a businuess I would want a lot more than 150k/year... Thats actually a bit absurd.
That’s net profit so assuming you put yourself in the payroll somewhere you would have 150k left over AFTER everything was paid. If you just put the profit in the bank after 10 years you’d have $1.5M.
@@jaymarcase9737 Yeah thats not really worth it when the stock market will give you a higher rate of return than that. Owners had to purchase those TV menu's for around 150k... F that. THe KIosk was also around 150k. Seems like its hard to rely on that rate of return when you have a coorperation that is constantly making you upgrade.
@@user-ec6ej4dp6t the stock market CAN give you a higher rate of return but it is not guaranteed. You have to have enough runway to ride out the downturns.
@Jay Marcase If you have like 5 mill in PepsiCo stock for example, you could literally just live very well off the dividends including a 50% tax on the money.
That's not even doing anything and just collecting, plus your money is pretty safe.
As far as ik 150k is after paying yourself a salary or someone else, if u own many and wwant to be passive investor. idk actual no. i just read it somewhere so correct me if I'm wrong. but 7.5% return isn't that good given risk and work. i would rather just buy some reit or simply real estate and if someone with more risk tolerance stocks
I won't shed a tear if McDonald suffered huge losses or went under.
I have not been back to McDonalds since the pandemic. Our home-cooked meals are now nearly 100%.
I agree McDonalds treats operators bad, however McDonalds going out of business would be good for humankind so I hope they fail.
The operators unionizing is hilarious to me, and I'm sure the irony of not letting their employees unionize is in fact completely lost on them
I work in healthcare administration. I owe my overpaid bloated salary to loyal fast food customers! Every McDonald's regular is about a quarter million of billable procedures and office visits over their lifetime. Murica
Yeah their fries and nuggets used to be their selling point, but even that are being sold in micro-shops & streets.
So to hell hundreds of thousands of workers, something millions of people love, destroying billions of dollars for the economy every year... Yeah, you're intelligent. Not.
as much as I'm a fan of the free market, I don't disagree with you mate.
This is what a franchise is all about. The franchiser carries little risk for huge profits and the franchisee carries most of the risk for little more than wages. Why would anybody get into a franchise?
Because they know how to sell it...
my uncle owns multiple different franchises and he explained it to me like this. When you own a restaurant managing your supply lines, logistics, food quality and branding take up a lot of time and resources. Franchises give you a formula where you know if you do x you get y and a lot of the guesswork and variability is removed from the equation. Managing staff, customer satisfaction and the other dozens of variables in a restaurant takes a savant or a team of people. In a franchise you are paying someone else to manage a substantial portion of the variables that you are not able to or would need to hire people to do for often more than the cost of the franchise fee. But this information is second hand. I have no personal experience, but this is what I was told.
Reminds me of a drug cartel or mafia boss
@@jacsonater You got it right. A friend of mine had a franchise and left it to start a restaurant on his own. He said he traded one headache for another.
He's happier now though, makes a better profit and retains staff for years as he can pay more and give little perks to the staff as well.
He also works 8 - 10 hours more a week on supply and delivery etc.
because most of these folks inherited their money and are dumb as rocks. So they buy a money generation machine. All you need to open a restaurant or bar are Good staff , an appealing idea and intelligence. Most of these folks resent paying the serfs at all and believe the world owes them
I used to like McDonald's breakfast burritos on Sunday. One Sunday, the drivethru line was very long and the wait longer. I had time to figure in my mind how much it was going to cost. This was before it was more common to use a debit card. When I got to the window the woman told me how much my order was. it was like three bucks more than it should be. Being cash, she was overcharging people and pocketing the difference. When I challenged her on the price she backed off. They were very ghetto and dirty on the inside and outside. Never went back. They only stay in business because of the Interstate exit is a few blocks away.
I prefer real food over addictive trash.
Don't hand them a debit card in drive through ever.. quick snap on their camera phone and you get out of state charges for other people buying stuff
I knew someone who sold off his franchise, and I stopped eating there after hearing the stories about his relationship with the corporate offices. Turning your business partner into a customer isn't something I would recommend doing.
they let the meat sit too long, and now theyre charging triple the price for it
f that
I haven't eaten at a McDonald's since 2019. Horrible service and dirty drove me away from them.
Let's do some really easy math.
Requirements for McDonald's Franchisees: $500k in liquid assets plus a $45,000 franchise fee. According to their own statistics, gross revenue is about $2.7 million, with net being $150,000 according to Mashed. An annual 30% net profit for that much effort is not terrible, but with long working hours, remodels (which were not accounted for in our little calculation), and external liabilities (vandalism, crime, natural disasters, and really any other freak accident), that's a lot of work and risk of profit loss.
Now, let's invest the 500k into MCD, which has paid a consistently growing dividend for 47 years, and is on track to become a dividend king. Currently it sits at a 2.2% dividend. That's $11,000 for doing absolutely nothing. It can go up and down, and you can effortlessly invest more if you like. But the biggest value is the time you get to do absolutely whatever you want.
Easy math?
Congratulations, you made me feel like an idiot.
You're missing a few things, equipment (350,000 to 700,000), leasing and purchasing of McDonald's real estate (400k-1.8 mil) or signing of a lease (unknown), construction and remodeling if you pick the location (250k-850k), initial inventory (60k-80k), secondary fees (depends on lease agreement, unknown). Depends on if you choose to get a loan from corporate or not but the initial fees can get pretty crazy. But if we take the known elements (equipment, 350k-700k, inventory 60-80k and the initial 500k and 45k requirements you have to pay around 955k- 1 MILLION and 325 thousand dollars. That would be an annual dividend of $21,010-$29,150. Average McDonald's operator controls a store for 20 years. From 2000-2020 average annual return was 11.8% you would gain an additional $112,690-156,350
@@jeez5735 oh yeah, I vastly oversimplified. But when you add those details in, it's even more demonstrable that you're better off just buying the stock than opening a franchise for the same cost. And by cost, I mean in terms of both time and money
$150,000 profit from $2,700,00 sales is absolutely horrible. Anyone who signs up for that or thinks that the work for those sales is worth $150,000 is in need of a math tutor.
@@Lee-ed9wv Yeah. On one hand, turning a net profit at all is a feat in of itself, especially within the first few years of business, and also that in the food industry, with its incredibly thin margins and cutthroat nature of competition. A six figure profit is a pretty solid return, especially in such an unforgiving industry. But the profit to working hour ratio is absolutely horrid, like you said. With lots of franchise owners reporting 80 hour work weeks, around 50 weeks a year, which comes out to about $37.50 an hour. I couldn't find the time period of when those profits emerge, so this could be within the first year, or it could be five years in, in which case there is some survivorship bias.
Granted, this isn't my industry, so I can't speak from firsthand experience, but I can speak with regards to the nature of profit by itself, and the reports put out by current and former franchise owners.
We went to a dine-in lunch for two at McDonald's just prior to the health crisis. Half the place was under construction. The other half was crowded with loud and unruly people. Two burgers, fries and drinks were about $25. That was my last trip there. Two great burgers and fries (no drinks) at In-n-Out cost us $9.79.
McDonald's in the 70s was as good as In and Out, almost.Burger fries drink
99 cents 1973
Why not eat real food?
Forgetting that McDonald's is garbage food, there is a reason In-and-Out is so cheap.
Over the years I have looked at many franchises. I passed on everything for one reason or the other. McD was the worst franchise agreement. 7-11 had one of the best.
7-11 is like buying yourself job.
@@jaymarcase9737 Yes, but I was talking about the franchise agreements.
7-11 is basically what's called in my country a Sari-sari store(7-11 is a version with a room they can walk-in with AC), and a sari-sari store anyone can start it here no license or local permit nor anything.
Just google "pinas sari sari store"
@@jaymarcase9737 same with Chik fa lay lol
I just went to a local McDonald’s last night. A fish sandwich meal with medium fries and a strawberry shake, plus a two-cheeseburger meal with medium fries and a coke - $21 and some change.
I’ll be helping that location go bankrupt by never going back. The food quality is terrible at McDonald’s so no way I keep spending that kind of money on their food.
You just told that you are lazy and JunkFood addicted.
Same boat here. Spent over 20 on 4 breakfast sandwiches back in December. Haven’t been back since and never will again.
It's great to hear operators are pushing back. Personally I think McDonald's collapsing would be a great thing. It would at least get them to re-evaluate their behaviour
I discovered the miracle of air fryers. I dont need McDonald's anymore.
About 20 years ago, the McDonald's near my place that's been around for decades lowered their standards. The staff would argue with customers about little things, they would overcharge you on combos meals, they would double charge you with the credit card and in 20 years, I haven't had my orders filled correctly...EVER. There's always at least one thing wrong. When I do order from them, I empty the contents of the bag and open up the burger boxes to see what they did wrong because I know I can't trust them to get it right. I've seen instances where they forget the sauce in their big mac or forget a meat patty. I thought it was all McDonalds but the one 10 minutes away across town doesn't have that problem. It gets my order correct, the staff is not rude, the place is clean.
That's one of the many problems with the franchise model... there's no universal standards for doing business, customer service, quality control. I worked for them years ago, I got fired or laid off for unknown reason so I go to call their franchise owner office and they supposedly don't have records of the event even though I still have pay stubs. Lack of quality control, massive indifference from corporate. Food keeps getting more expensive. I just go to In N Out for fast food or anything else other than McDonalds.
That sounds like a problem that the original McDonald's founders were trying to solve..
You should watch The Founder
I don't get your point?
@@Filthyserb262 he worked for one of Mc Donalds, got to know their shits and never ate from one since then. If grammar is wrong feel free to correct. Thank you in advance.
I got a big mac with no hamburger patties! I have seen many issues but I will never forget my vegan big mac. I never thought I would have to ask where was the beef?
How shocking, the Company that was stolen by scammers, isn't very honest.
I was thinking the difference between Mc Donald's and a pyramid scheme are minimal.
- You get franchisees because they want to be "independent entrepreneurs"
- The business opportunity in not so shiny as presented
- Larger part of profits is made of internal purchases rather than external ones
- Only a little percentage of employees and operators earn reasonable salaries and returns on investments
- The "core" of the company is disinterested on how the employees fare.
- You have required corporate expenses to cover with your own revenues.
I was thinking about MLMs too!
yoi you are right
McDonalds even left my country. Can't get it anymore. I thought I'd miss it but tbh I don't
Lucky your country is.
In Philippines it's Mc Garbage, terrible quality.
This is not the McDonalds I grew up with of the 1960's. The food quality changed and evidently the relationship to their franchisees. McDonalds are not the only retailer that has gone into real estate for profit. Also the stores are harder to access them from the roads. I noticed that I had to make a lot of left hand turns to get in and out of many of locations. Some of the employees are playing a "pajama game" with the service such as keeping the lids to the drinks half tight causing spills. I noticed that the parking lot of the last one I used to get breakfast while traveling was cratered with drink spills. No more.
😁😁
What place hasn’t changed since the 60s? 😂
Dude I thought it was just me, McDonald's has some of the consistently weirdest entrances, parking lot layouts and drive throughs. If I need to walk in it feels hazardous because I'm always crossing traffic no matter where I park, blind/tight corners or really tight drive lanes--just weird lot planning all around.
Walmart also buys and sells and leases or rents real estate, how many other companies do it I don't know. Many huge corporations run multiple businesses.
Am I the only one that really likes seeing the old timey signs and decor for fast food restaurants? It gives a sense of permanence and they could just refurbish the classic decor instead of replacing it
Sure, if you feel nostalgic for the start of the obesity epidemic.
I do like old retro signs though.
Honestly, if mcdonalds wants remodels, they should be one to foot the bill. After all, if business is just fine as is, why should franchisee do it? Besides, they are the landowners anyways. Also, as usual problem is that just some soulless corporate people are grasping at every single trick to achieve infinite growth, well, growth for next quarter so they get bonuses. Usually problem is that when business becomes big, an corporation, they start to use their money, power and financial tricks to make profits instead of making better products. I mean it's much easier to just extract money from someone, use trick to supress/defeat competition, rather than actually competing in fair race.
It just always amazes me how business kind of inherently evil, it can be good, but only if business culture is carefully managed by good leaders and investors, but in the end unless this culture is carefully protected, business either stays small, fails or becomes huge soulless machine that just does whatever for profit as long as they can get away with it.
I'm still upset they got rid of the play places for no good reason
@@CheesyLizzy it's the cost of cleaning the play spaces. That's the reason, and it's good from the operator's point of view, at the detriment to consumers
@@GyroCannon idk man at the McDonald's I worked at we cleaned the play station professionally 1 time a month. Idk the cost but I'd be surprised if it costs that much. Rest of the time we swept it and wiped the tables
@@jeez5735 the operators are being squeezed out every penny by McDonald's corporate. Every bit they save makes a difference.
This is why I always believed mid-sized companies are the best, and this belief always gets reproven time and time again, not small enough to have subpar QC and aesthetics, but not big enough to listen to mostly only investors & shareholders, use consumer engineering, psychological tricks, FOMO, exploit grey areas in laws and contracts, etc.
When I was a kid a McDonalds franchise was a goldmine, now it seems like an empty shaft.
All companies abuse their operators. From Amazon, FedEx and Uber drivers to McDonald’s. I’d rather invest in stock, or annuities than own and operate any business I didn’t create.
Those other companies don't have franchises, so I'm not sure what you consider an operator.
I have been surprised it lasted this long.
Worked at a Mcds during all those remodels. Which was a nightmare also. The state had 3 contractors that worked with Mcds, with all the remodels they needed more, so the store I was at got a new contractor and it was just problem after problem. Some of which was just a bad job. No conduit was ran in a wall that was already tiled for the front registers. Tables were put in after tile on the floor was done, but drilling out the concrete putting the table in and filling it with concrete. No problem...until they slopped the cement to set the post on the finished tiles and didn't clean it up and let it dry... Guess there something like 70 problems and the finish walkthrough.
🤯🤯🤯🤯 wowwww
They really didn't need a remodel, they need higher quality employees. I quit going to McDonald's because I was consistently served low quality food by people who didn't want to be there.
If serving high quality food by quality employees was the reason a "fast food" giant succeeded, McDonald's would not exist. Name recognition, product familiarity, catering to children and being the first real brick-and-mortar franchise of any kind are the reason McDonald's succeeded.
McDonald's has ALWAYS been last place in food quality, and employed minimum or near-minimum wage (a.k.a. low quality) workers, since that is the only way they can distribute consistency to hundreds of millions of customers worldwide. What they need is what they will soon run out of which is "suckers" who agree to become a McDonald's franchisee. 💁🏻♂️🍔🍟
Higher quality employees and higher quality food equals higher prices. Then you would be saying you don't go to McDonald's anymore because they raised the prices.
@@corybjarnason218 They raised the prices too high regardless. It's close to $20 for a combo meal now.
@@corybjarnason218 bro, McDonald's raises their prices every single year while never treating their employees better. Companies always raise prices no matter what because they need to keep their current profit margin consistent with annual inflation.
So what kind of people are you expecting to work for minimum wage at McDonald’s. They don’t get 40 hours, they don’t get any benefits. They may not even have a stable schedule.
I’d suggest you get a job there and show everybody how it’s done.
It's time for McD's and all companies like it to fail and go away.
You're obsessed with them
Where I am the McDonalds restaurants have all gone downhill in the same way at the same time - orders missing items, ingredients switched out and swapped for unknown replacements, and slower service. Added to which they're no longer so affordable even as a treat. I can see them being a big casualty of the recession as it would only take a small % shift in consumer behaviour to close most of them - and that shift we can see happening around us.
This was super interesting. I was looking at investing in McDonald's as a long term dividend hold, and this is the sort of thing that just would not come up in my investment analysis.
There is another factor here that we can ignore, but is huge: a lot of people today are not suited to being a small business owner. And you can tout the McD model all you want, at the end of the day, if you don't have the stones, grit and determination to be a small business manager, you will fail. I have lived in the USA for 54 years and run small businesses. I'm seeing more and more people who phone it in vis a vis managing their place, like they think "it should just run". Nope. They do not "just run". They fall apart constantly, and a small business manager is someone who keeps putting it back together. I'm willing to bet that lack of management acumen and hard work is what is failing a lot of these underperforming locations, as much as other factors that are significant, not dismissing those.
Oh, you’re one of those blame everybody else. Our corporate overlords are never the problem. They never screwup.
It’s the franchisees, the workers, the customers.
McDonald's is a real-estate co. Not a restaurant chain.
Imagine thinking McDonalds didn’t get kickbacks from the companies doing the remodels
According to another video: They have partnership with people that fix the ice cream machines don't know about remodels. See video about why McDonalds ice cream machines are always breaking.
Their food prices are crazy
Anyone catch the irony that the operators tried to for what is essentially a union?
With the looming commercial real estate crisis soon approaching, it makes sense why today's news about McDonald's layoffs came out today.
A great overview. To go deeper, you should research the history of McD's ice cream machines that from what I've heard are always breaking and you aren't allowed to fix them; you must go through a specific third party. I forget the details, but that's the very basic gist of it. It's a scam within the scam.
I stopped going to McDonald's in 2006.
Gave them two official notices on why and they couldn't be bothered responding.
About 6 months later, the manager of the complaints department, was on TV saying, "we've got to a point where complaints need to be taken seriously".
I travelled for over 8 years for contracts by road, and it didn't matter where I went.
McDonald's was consistently employing incompetent workers and I struggle to see many being able to tie their own shoe laces.
One girl (after I had ordered 24 nuggets) had to ask another girl how many 12s there are in 24.
Due to only 12 permitted in each container.
Having to repeat that I wanted fries, four times, to an employee (actually a 17yo manager) after id just driven past him smoking a joint out the back of the rear gate, with two of his buddies, was immensely frustrating.
Seriously, who TF throws a badge on a 17yo, and calls him a manager, the same week that he finished school for the year ?
I have 7 McDonald's stores near me and nothing really changed, because, I can go past KFC, Chicken Treat, Red Rooster, Hungry Jacks (Burger King is renamed in Australia), or any other fast food place, and they'll have customers.
Hardly any go to McDonald's any more.
A friend of mine still goes about 8 times a week and he'll have at least four complaints, and the burgers are way overpriced.
He's frequently overcharged for his order as well as getting the wrong order.
Lol. The first time I learned that McDonald’s is actually in the real estate business was through MattPatt’s Food Theory Channel. Make sense when you scrutinize their financial statements. Food revenue isn’t the top notch highlight. It’s the lease and real estate.
That guy promotes addictive JunkFood like noone else.
Ray Crock realized this early on.
7:20 it sounds like McDonald's is more like a pyramid scheme. If their main money makers are the operators and not the people they are selling the burgers to.
More like a Multi Level Marketing company. “Only 10k to sign up to our ‘brand’ and get the starter kit of ugly leggings to sell on Facebook!” McDonald’s is that but as a restaurant
that’s hilarious. they make billions but offload expenses to their franchise’s
Because business cannot grow their profit forever. They will hit a plateu unless they abandoning moral compass by cheating and lie to extract more money from the existing plateu business. It will always like that then it got worse and then the bubble will burst
Nothing more than real estate investors hiding behind the facade of a burger joint ?😮
Just adding my 2¢. The McDonald's at 10:55 is currently the last one in downtown Pittsburgh Pennsylvania. On April 30th there will no longer be a McDonald's in downtown Pittsburgh. There four (4) at the end of April 2023 there will be none. So yeah it is getting bad for the operators.
My family owns and operates a McDonalds here in Brooklyn and we couldn't be happier. It's hard work but the return has been worth it for my family.
There will always be someone buying mcdonalds imo.
Lol. Says the head office employee
@@Bulldumbdumb We arent corporate, anyone can open a franchise. You just need a million dollars to start. My parents took out a loan.
I appreciate all effort you put into your videos. Thank you
Mcdonalds are so different from location to location. Some locations are fast and friendly and others are rude and slow. I also noticed that the good employees jump around to other locations. I also know some nice young people who applied to work at a location and got an interview and never heard back. Meanwhile that same location has major issues and is slow. Mcdonalds is going to fail if they don't get all of their store up to standard.
I rather eat real food than going there.
These places stink poisonous.
McDonald’s would rather hire one 35 year old black guy who shows up high than 4 teenagers who’d they’d have to actually schedule 🙄. God forbid they hire harder working teenagers who they’d have to schedule
Yup that is how it is around me as well out of the dozen or so close by only two of them are any good to visit.
I use to work for McDonald’s back in 2000-2002. The store I worked at when looking at their monthly, quarterly profits… the franchisee was making well over $10-$20 thousand a month per store. Managers were making $6 thousand a month. Their profits were ridiculous so remodeling was an option. Now because of wages and inflation I can understand why they are bailing from this.
Side note burgers like a regular cheese burger would cost 3 cents to make and the cost was 49 cents to the customers. Mind you I’m not adding the shipping, cost to keep the building going and all that jazz.
0:21 please add a seizure warning that was intense
If you seen the movie, about McDonald’s, you will see that the corporation stole the McDonalds restaurant business away from the brothers. In my opinion, it’s nothing but absolute greed against the operators.
And in just a week we have the McDonalds layoffs starting.
I knew it was over when they started making you pull around after ordering from the drive-thru.
After you said, "I know what you're thinkin'", I though you were going to follow through with ""Did he fire six shots or only five? Now to tell you the truth, I've forgotten myself in all this excitement. But being this is about McDonalds..."
Frankly, McDonalds didn’t need to remodel. Especially at those prices. I think what killed them was
1. the price gouging that started during co veee veee.
2. Keeping customers locked out of restaurants longer than anyone else, and even when they opened again they keep the bathrooms shut.
3. The loss of customer service. Walk in and try not to use a kiosk. You almost have to jump the counter and full body tackle someone to get them to take your order.
Great video as always brother!! Thanks!!
Thank you Daniel!
I have to go cross town for my McD, the one next door cheats. Out of 13 orders, 11 come up short or have an UNORDERED item added. This may explain why.
15 an hour tho.
I have one near me that does the same. For me the signs of a "trap" McDonalds are: 1) Never that busy 2) Open 24 hours
I used to like going to Mcdonalds from time to time, but recently on the last few years their service became very defficient. Negligent, even. Now I understand why. It really is good that now I rarely go to a franchise, and instead go to local restaurants and small franchisees. It os cheaper and way better. It sometimes is faster, even without the Automac.
Great news! Thank you!!
McDonald's gets worse every year. Not only do they treat their workers badly, but they also treat the operators badly. Not good for business.
These types of franchises are basically a version of an MLM . I don't know about McDonald, but there is a Subway in my neighborhood that had so many different owners in the last 15 years , i can't even remember. one owner after another goes bankrupt. The customers don't notice this , because there is always some other sucker that buys the place . So from the outside it seems as if it's a successful business.
Some of the outdated stores should have historical landmark status and not have to update.
Very informative! Thanks. I hope the story is much different with other fast food franchises.
This was a headline in my local southeastern Michigan newspaper last week - 26 Burger King locations to shutter across Michigan - The closings are due to “unforeseen business circumstances” and failure to reach an agreement with Burger King Corp. according to the Detroit Free Press newspaper article.
I guess this is why a Big Breakfast with Hot Cakes and a Large Coffee is now $25.00
Wow, I see how the franchising system is less appealing each time I learn more about it 😮
Excellent Video and Information !!!
Great documentary…..thank you
I hate McDonald's I hope they all go out of business
Thats the most selfish thing that I've ever read in this video so far. Do you think all the burden will be on the investors? Did you even saw the video ffs
@@Psychopatz McDonald is trash 🗑
Here in India it costs 300-500k USD to open a franchise, so investors can get their money back within say 4-5 years 20% APY so they are opening more locations over here
What about employee fees,operation cost n rent etc it will take 7 to 8 year better to open roadside thela
@@osamaobama1574 nah cus minimum wages, construction cost & educated workforce is much cheaper in India so profits will still remain the same. We actually planned on starting up a franchise but then dropped the idea as 20% apy is not that great in India where private banks offer 12% apy
Many have stopped going there because the portion size has gone down nearly 50% in the last 30 years while the prices are now stupid money. Have had enough.
Your video quality is awesome 🔥🔥
Thank you Rollsman! Really trying to take things to the next level!
I know something is wrong with running a franchise like MacDonald because we share a building and Macdonald there are one of the most crowded one I've seen, and yet they close, this happened before the pandemic. The reason is because the rent was too high and now it's become and iBox store.
If it was a privately owned restaurant they could probably easily do things like increases prices or something, but since it's a franchise they are bound to the rules set by the corpo which might not work for your particular case.
Too expensive for garbage food
I’m currently going to school to get a business degree and a management degree to become a owner operator I live in San Diego and starting to see the impact of these franchises I’ve worked with 4 out of the 5 franchises here in San Diego. I have worked along side one of the operator’s for 2 years to eventually seeing the sad reality of him selling there was a store he owned that needed to be remodeled 3 years ago after him eventually selling the McDonald’s finally got a remodel and is now open today. the director of operations always use to tell me we have no money I use to think to my self how but after doing lots of research i now see he was sucked up in the corporate greed and it’s sad that future operators will never have a chance nor something to pass down to there kids I’m 21 and very interested in becoming a owner operator also most these locations are passed down generation to generation which helps with 1m and the 500,000.
Great video there’s a big problem in Cali rn with McDonald jobs the 20$ a hour didn’t help
I was so saddened when they closed the mcd playplace, and I realized a lot of the workers were there to see children happy. We liked the pre-remodel. Unnecessary.
The future is McDonald's will operate their own restaurants with robots and cut out the franchisee.
McDonald's menu item's cost too much and don't even fill you that much. last time i went there i ordered a double bigmac combo, paid something like 25 Canadian$ and had to wait 20 minutes before i could eat. Subway is much better on that regard and has become my go to for sandwich.
One time on a 12 hour drive my wife wanted coffee so we stopped at a Starbucks. There was one customer ahead of us and multiple employees and it took a half an hour. They botched it and it took 20 more minutes to fix. So we had to drive an extra 50 minutes in darkness.
Our local McD's was flying their American flag upside down this past sunday and a few residents where very concerned as to why. We even had one armed resident asking employees if everything was ok fearing a distress call because of it. As it turns out, the franchise owner instructed the employees to fly the flag at half mast and a employee mistakenly hung the flag upside down, which is a sign of distress. I assume that the owner was trying to make a point to the McD's corporation flying the flag a half mast. Ray Crock would not be happy right now!
The issue is that franchisees actually believe theyre "business owners" (and legally, sure, they are) but theyre really just mcdonalds employees
Thing is, even if operators managed to get Mcdonalds to agree on a more fair deal, the company has already shown that they can just as quickly switch to automation and by that point operators lose all bargaining power.
we are very far from having a full automated restaurant even in the future all machines will still need 1-2 people in house to look over them this wouldn’t be a reality for probably at least another 50 years 🤣
What the hell does an operator have to do with a burger flipping machine. You do know that the operators are not the ones who flip the burgers and take the orders right?
Did you even listened to anything? profit form food revenue isn't the biggest pie for McDonalds it's the contract from the operators. So even if there was no customer for 1k years, McDonalds would still be earning for leasing their land and IP.
@@MangaGamified I think you misunderstand, with automation there wouldn't be a need for an operator if need be because of the fact that after initial costs, the cost of the location would be minimal as they would at best need between 1-3 people maintaining the site and moving/cooking the food.
To put it simply it would be a switch to maintaining their business model from realestate to more of a hybrid model.
it's astonishing how much quality has fallen for the McDonald's restaurants near me. When I was a kid it was a treat to go to McDonald's. I only went into a few different McDonald's in recent years when I was in a hurry/didn't have a choice. To start off they are so dirty I don't even know how it is allowed, there is no way any quality checks are being done, eeven in the outside it looks like a run down building, lights are broken, garbage all over. I got a cold hamburger and french fries that tasted like cardboard. Meanwhile, a Chick Filet opened for the first time in my area a couple years ago, the place is packed all the time. Where I think where McDonald's messed up is they tried to make fast food "healthy", it will NEVER be healthy (it's processed/packaged food that is mass produced). Whereas In-Out-Burger doesn't freeze their burger patties, that is why they cannot open a franchise on the East Coast. If you are going to open a fast food place, do NOT try to offer 'healthy' food options, just go for high fat, great taste (the place will be busy, ESPECIALLY when there are periods of economic downfall, people aren't worried about long term health during those periods, they want simple pleasures that don't cost too much).
Thank you for returning to your old presentation style 😊
The MickyDs in my area have really HORRIBLE customer service.
Ronald noooo 😢
😢
Hello
Wsp
With the food app trend having no end is site Mickey D's doesn't need restaurants - it just needs ghost kitchens. This is coming faster than most realize.
And there will be a big USELESS CLASS.
People who don't have enough education will be a big big Problem in the future.
All the food apps are unprofitable and deliverers are quitting since they don’t make enough without tips. People are quitting using them because some jackass eats half your food when it gets to your house than expects a tip
@@LucasFernandez-fk8se we will replace them with self driving cars for delivery - no need for carbon based delivery people.
Ideally we would go the route of Japan with vending machines, walk or drive up to it..enter your order, wait 5 minutes and presto! Burger, fries, and drink dispensed! The USA has had vending machines for soda, chips and candy for ages now..but with automation it should be possible to have burgers and fries cooked and assembled flawlessly every time.
@@Ziegfried82 Yeah I hear ya!
That's strangley surprizing news because a few years ago I looked at how their stock has appreciated over the years. I figured if you bought McDonalds Stock in 1999 or the equivalent dollar amount in gold at it's low of $300/oz you would have actually made a lot of money on either, but as I remember McDonalds stock appreciation actually beat Gold by 2015. I haven't looked at it for about 8 yrs though and I didn't know how they treat their Francisees. Nothing lasts forever though, especially with poor Management of the Parent Company.
The food is not affordable anymore. You pay close or over 10$ for breakfasts now Is insane.
With the rapid increase in corporate profits due to the real estate bubble, and McDonalds burning their relationship with franchise owners, it wouldn't be surprising to see them shut down a massive number of stores as real estate profits evaporate in the upcoming crash, and start really struggling. I expect they'll see the same type of ~40% or more stock declines over the last year, just like Amazon. Base a business on a boom, and watch it crumble during the crash.