McDonald's franchisee group says $5 value meal can't last without company investment
Can $5 McDonald's Deal Survive Without Aid?
An independent McDonald's franchisee advocacy group has expressed concerns about the sustainability of a new $5 value meal promotion set to begin on June 25. While the promotion offers consumer affordability, the group urges McDonald's to invest in the initiative to make it viable for franchise operators long-term. The group highlights the need for financial contributions from McDonald's, given the narrow profit margins in their business model, to maintain such discounted offerings.
What are the concerns raised by the National Owners Association regarding the sustainability of the discounted value meal?
The National Owners Association (NOA), an advocacy group for McDonald's franchisees, has expressed concerns about the sustainability of McDonald's new $5 value meal promotion4. The group supports the promotion's consumer affordability but is apprehensive about the long-term sustainability for franchise operators. They argue that the current business model, described as a "penny profit business" with narrow margins of 10-15%, cannot sustain a 30% discount without financial contributions from McDonald's. The NOA's letter to its members emphasizes the need for McDonald's to invest its resources to maintain the affordability of such promotions for both consumers and owners. This stance highlights the tension between providing immediate consumer value and ensuring the financial viability of franchise operators.
How does the National Owners Association suggest McDonald's could contribute to make the value meal promotion sustainable for franchisees?
The National Owners Association (NOA) suggests that McDonald's could contribute to making the value meal promotion sustainable for franchisees by providing financial investment and support. They emphasize that McDonald's, with its vast resources, is essential to creating a sustainable affordable strategy for both consumers and operators. The NOA board states that the current business model has 10-15% margins, and there isn't enough profit to discount 30% for this model to be sustainable. Therefore, it necessitates a financial contribution from McDonald's to support the value meal promotion and ensure its long-term viability for franchisees.