McDonald's preparing for big staffing cuts

[buckguy]

https://www.reuters.com/business/retail ... 023-04-02/

[SamSpade]

Pretty wild to close the corporate office for a few days and ask them to cancel all meetings. Still, this does seem like a semi-humane way of conducting "we're sorry, but your services are no longer needed here..." meetings.

Is it spring break in Illinois? I will say where I work last week and this week have been very slow with one state in this border town on spring break this past week and the other this week.

[storewanderer]

The magnitude of the cuts is not yet clear but closing the corporate offices and even canceling meetings that were pre scheduled with vendors etc. is pretty significant.

They just opened a new HQ in Downtown Chicago and last summer the CEO was mentioning it was hard to get people to work there due to its location and crime. I wonder what happened that now they have a glut of workers and layoffs.

Hoping whoever is in charge of eliminating self serve drinks is laid off. I'd also lay off and scrap the entire order kiosk program. It is a complete failure. Sorry. The worst kiosks ever.

Go get the system Taco Bell uses- it functions so much better.

[pseudo3d]

The magnitude of the cuts is not yet clear but closing the corporate offices and even canceling meetings that were pre scheduled with vendors etc. is pretty significant.

They just opened a new HQ in Downtown Chicago and last summer the CEO was mentioning it was hard to get people to work there due to its location and crime. I wonder what happened that now they have a glut of workers and layoffs.

Hoping whoever is in charge of eliminating self serve drinks is laid off. I'd also lay off and scrap the entire order kiosk program. It is a complete failure. Sorry. The worst kiosks ever.

Go get the system Taco Bell uses- it functions so much better.

Reorganizing the entire system to have most of the power in Chicago HQ was a mistake.

[storewanderer]

Reorganizing the entire system to have most of the power in Chicago HQ was a mistake.

I think it is 90% franchisee units in the US. So the power really seems to rest with the franchisees. As long as the rents and royalties keep coming into Chicago, not much else seems to matter. Quality of operation is really bad; it is rare I see MCDs being run properly. I do see them, but it isn't often. As a region SoCal ones are run noticeably better than surrounding regions/states.

[pseudo3d]

Reorganizing the entire system to have most of the power in Chicago HQ was a mistake.

I think it is 90% franchisee units in the US. So the power really seems to rest with the franchisees. As long as the rents and royalties keep coming into Chicago, not much else seems to matter. Quality of operation is really bad; it is rare I see MCDs being run properly. I do see them, but it isn't often. As a region SoCal ones are run noticeably better than surrounding regions/states.

Being franchise-owned doesn't mean squat if the parent company keeps the franchises on a short leash, and there's been more arm-twisting than in years past, especially regarding how stores should look (interior decorations and themed restaurants are largely a thing of the past), policies and promotions are done (the "World Favorites" wasn't liked by franchisees), and menu items.

And even as far as franchises go, more often than not they're owned by big investment groups and not the "mom and pop" ownership that the chain once prided itself on. Many years ago the chain was very careful to assign franchises to stewards they could help work with the brand, not signing away territories to large companies, and had very specific policies that allowed them to survive and thrive as an independent company, while their competition were usually under larger companies and had a much rockier history.

[storewanderer]

Being franchise-owned doesn't mean squat if the parent company keeps the franchises on a short leash, and there's been more arm-twisting than in years past, especially regarding how stores should look (interior decorations and themed restaurants are largely a thing of the past), policies and promotions are done (the "World Favorites" wasn't liked by franchisees), and menu items.

And even as far as franchises go, more often than not they're owned by big investment groups and not the "mom and pop" ownership that the chain once prided itself on. Many years ago the chain was very careful to assign franchises to stewards they could help work with the brand, not signing away territories to large companies, and had very specific policies that allowed them to survive and thrive as an independent company, while their competition were usually under larger companies and had a much rockier history.

I don't know, in my market, most of the franchisees are very long term individuals/families who have ~10-15 units each. I have noticed some of the 1-3 unit type franchisees have exited the system the past few years and sold to these who have 10-15 units. Quality of operation (lack thereof) varies widely and so does pricing and basically everything else. I think the chain is on the wrong track and has really lost its way operationally and on price.

In the US, one of the largest US McDonalds franchisees was bought out in 2022 by corporate and had 60 units. This is pretty small compared to the investment group type franchisees who own other concepts. https://www.restaurantbusinessonline.co ... ranchisees

The chains like Popeyes, Burger King, Taco Bell, are the ones I see more owned by investment group type outfits with hundreds of units under multiple concepts. Wendys in some regions as well but some of those are still smaller/local type groups.

[veteran+]

IMO, the whole franchise thing is pretty bad.

The company sets this up for all the wrong reasons. Max $$$$$$ & minimal accountability or responsibility. They don't seem to mind the diminishing reputation of the Brand.

The franchisees are most often very unimpressive to just plain awful. They too make decisions soley on max $$$ and forget the rest (as long as they can get away with it).

[jamcool]

Most businesses in this country are franchises. There are good franchisees and bad franchisees.

[storewanderer]

Most businesses in this country are franchises. There are good franchisees and bad franchisees.

The biggest problems seem to come when a franchise is sold. There are a lot of issues.

I've heard stories of new franchisees taking over blocks of locations and telling employees they are all fired and have to re-apply/start over again on seniority. Great way to completely doom your business purchase.

New franchisee seems to overpay for the business and this causes a lot of problems. Either prices increase drastically to pay for the loan Interest/costs or they just end up going bankrupt in short order. Usually these purchases take place with SBA loans too so it is the US Government who ends up losing the money when things go this way.

Another one is just an outright bad franchisee who runs the business into the ground.

Another issue I see is when franchisor demands useless things like sign/logo changes. I notice Burger King is going back to its 80's era logo again. Unreal. These things cost the franchisees money unnecessarily that is better off going to the employees (better pay, more staff, etc.).