Mick

McDonald's starts a turf war with franchisees over Happy Meals

Thursday, December 10, 2020 by Snacks

"We got the Big Mick"... As Eddie Murphy learned in Coming to America: McDonald's may look corporate on the outside, but it's family on the inside. 93% of its 39K locations are franchised, aka: owned by independent people. Mickey D's sells the rights to use its brand and open shop — as long as the McFlurrys are frosty, no one knows who owns it.

  • Franchisees are UnHappy, after McDonald's said it's ending the $300/month Happy Meal toy rebate it pays to its 14K US restaurants.
  • Expect pricier Happy Meals. Some franchisees said they'd raise prices because they'll have to cover toy costs themselves.

When you get the Minion... but you wanted the mini Hot Wheels. Franchise owners have to pay McDonald's a percentage of their sales and buy ingredients and merch straight from corporate. But McDonald's wants to spend that toy money on tech, instead. And it wants franchisees to do the same.

THE TAKEAWAY

Aggressive tech prioritization = pandemic pattern... Food chains have been ruthlessly prioritizing tech investments. McDonald's says its new "smart" drive-throughs are boosting sales, so it's charging franchisees higher tech fees. Chipotle doubled down on its digital-order Chipotlanes. And Starbucks just announced it's investing in digital order "walk-through" stores.

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