McDonald’s is a fast food empire with over 40,000 restaurants across the globe and more than 13,000 locations in the United States. With an annual revenue of over $23 billion a year, the company is by far the largest burger chain in the world.
Since the pandemic, it saw profits ballooning, despite citing rising operational costs and supply chain issues as major problems dragging growth and even passing along a series of price increases to its customers to allegedly offset sales losses. With its stock rallying at the moment, and higher menu prices resulting in a significant increase in average ticket costs, it’s hard to imagine how a business of this size and magnitude can be struggling right now.
The answer is not simple, but in today’s video, we’re going to explain why the biggest fast food chain in the entire industry is facing a rare and yet unsurprising wave of bankruptcies in 2023.
Despite being the greatest fast-food corporation the world has ever seen, 95% of McDonald’s restaurants in America are operated by independent owners, and the war between corporate and franchisees seems to be getting worse this year. For decades, operators have been fighting McDonald’s tightening rules and expensive demands, and now many of them are hitting a breaking point.
For about 40% of franchisees, McDonald’s new financial requirements may end their years-long leases because the company’s rising expenses are not allowing these stores to hit profit targets. Simply put, these franchisees may have their contracts canceled, losing all of their investment if they fail to meet corporate expectations. In other words, one in four McDonald’s operators is at risk of going bankrupt due to the actions of the company itself.
But their strategy of expanding their business on the back of operators isn’t a clever one. At some point, its entire model could be at risk if enough of them decide to leave the company. When they signed their contracts with the megachain, franchisees were promised to become partners with the company. But over the years, corporate changed rules and regulations, so that the operators were the only ones responsible for the risk of managing a low-margin restaurant business during economic downturns.
On a consumer level, things aren’t going great either. The brand’s push for more expensive burgers has not been well-accepted by customers. Even though the average ticket prices have risen by roughly 15% over the past 12 months due to higher menu prices, there are fewer people visiting McDonald’s locations on a monthly basis, and they are even fewer people revisiting its restaurants multiple times in a month.
Put simply, customer loyalty is going down, and that was one of the main pillars that helped McDonald’s to build its brand since its foundation in 1955. Unfortunately, McDonald’s case is a clear demonstration of how a great business can rot from within due to its own greed. That’s a reality more people are waking up to right now, and that ultimately will contribute to the demise of the greatest fast-food chain America has ever seen.
Sound off about this article and video on our Economic Collapse Substack.
Article and video cross-posted from Epic Economist.
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If only the people got what they order at these fast foods shops. You are bombarded with commercials with fresh made products that actually look tasty. When you get your food if looks like someone sat on it and was prepared very sloppy. Give the people what they see in the ads, not a poor excuse for it.
If I could go to McD just ONCE and get a large decaf with 3 cream and 3 Splenda without a problem, I might be able to whip up some sympathy. Until then, whoop de doo.
from what i’m witnessing here on the west coast, McDonald’s is being overtaken by IN and OUT fast-food.. one franchise is building a new business ACROSS the street from a McDonald’s … i expect that mcdonald’s to close by years end…
Sounds ripe for a huge class-action lawsuit. Mickey Deez would not want me on that jury.
Unappetizing, unhealthy food made with the cheapest ingredients, served by sullen halfwits who can’t even get the order right. What’s not to love?
Oh that and their promise to keep Whites out of management (50% “diversity” is the target) instead of just promoting the competent is a factor for many. I won’t eat somewhere that openly discriminates against my family.
When McDonald’s was just cheap crappy food, it filled a certain market niche. Now that it’s more expensive, woke but still crappy food, that niche is being filled by others. This is as it should be.
The food is crap (except for the egg mcmuffin – which, if they were smart, they would’ve started to have “all day breakfast” about a decade before they did) and so I’m not surprised. The only thing that’s a shame is that the “Happy Meal” will be gone. I didn’t take my kids there often, but for a treat, with a toy, it was great.
mickey d’s here in fenton,mi seems to be really slow the last couple of years. lots and lots of competition.
Unfortunately I think a lot of White customers avoid restaurants with a mostly black staff. Every time there’s a George Floyd type incident, thousands of fast food workers go online and say how they’re going to spit or worse in the food of White customers. Jesse Jackson say he used to do that when he worked in restaurants.
I remember when Jesse Jackson said that, and that is the same old reason my family never eats out where the staff is black, I just don’t want to chance it. Maybe all of them are upright and honest but tell me how someone can be sure? You just can’t, and you must always remember that 50% of the crimes are committed by 5 to 6 % of their population.
Go woke
Go broke
One other reason is that the food is terribly unhealthy. Before the Covid scam, I would go occasionally and eat a couple things on the menu I thought were relatively healthy. Since my health epiphany almost three years ago I haven’t been to any fast food restaurant and never will again. Let’s home more of the American people do the same.
Corn syrup and yellow dye #40 mmmm.good..
I used to love McD’s but the quality of the food has suffered. A burger used to be juicy. Now it is dry. Over cooked. Has the texture as if it was cooked hours ago and has sat drying out in some warming drawer.
However, during morning rush hour the food seems much better. BE&C biscuit is my go to. With as much business as my local McD’s gets in the morning the food has to be freshly cooked and perhaps that is the difference.
one problem is I and most whites will no longer eat food prepared by blacks.
They telegraphed that they want to harm us and ‘get back at us’…..why would we go there?
When i see blacks….i leave, I won’t eat if blacks handle my food.
👍🏼
There are some many more places now where you can get a fresh hot burger and fries for just a few bucks more. About ten years ago , I was on a long trip and went thru the drive-thru and got a QP and fries. I threw out the window at the end of the entrance ramp it so bad. Haven’t been back since.
Good riddance, McDonalds. Your food has become terrible and your prices are astronomical. At one time, you could feed an entire family at McDonalds, now you’d have to take out a bank loan to do that. In addition to the food being unhealthful, it tastes like SH*T! The sooner that company goes out of business, the better.
What could go wrong with Force inject us Bill Gates being the new potato grower and supplier for McD’s. GMO wheat, MRNA meat, fryer oil with silicon anti foaming agent. Could any of these be a health issue?