For McDonald’s franchisees, the future is not golden arches and clear skies. Fast-food wars have left the (once omnipotent) giant weakened, with uncertainty looming. In a recent survey by Janney Capital Markets, six-month domestic outlook from the point of view of McDonald’s franchisees was the most negative it has ever been in the 11 years of Janney’s survey history. In a time when the fast-food industry is as competitive as ever, McDonald’s seems to be the trailing contender. Restaurants like Panera Bread, Chipotle, and Shake Shack are taking over the chain arms race with their emphasis on healthier and organic options. Taco Bell has also recently barraged McDonald’s with advertisements bashing the “McDonald’s Empire.”
In addition, McDonald’s is radically changing its business model to fit the norm of the changing trends. The recent “Create Your Taste” campaign is aimed at giving customers a more gourmet experience at McDonald’s. Guests will be able to customize their burger with a variety of options to replicate what other burger chains have done. However, this has angered many franchisees; some believe that McDonald’s is trying to do too much and expanding its menu unnecessarily. Furthermore, McDonald’s has been placing more of an emphasis on adding premium, expensive items to its menu, moving away from advertising the cheap, simple burgers that represent the company.
I agree wholeheartedly with the franchisees. It is perfectly fine for McDonald’s to tweak its menu in an attempt to keep up with the times, but recently, it has felt like the company is rebuilding from the ground up. McDonald’s was never known for having the best quality ingredients, nor was it known for offering gourmet experiences like “Create Your Taste” or its new Five-Dollar Premium Burger. If I wanted a high-quality burger for the same price, I would rather go to Shake Shack or Smash Burger. McDonald’s has been winning on value rather than quality for years, and although the trend is to eat healthier fast-food, McDonald’s is going about its process the wrong way. With competition attacking on all sides, McDonald’s must remember its roots and company culture to be able to contend as a fast-food superpower.
-- Jonathan Wang