In an attempt to keep competitive with some of their breakfast rivals, McDonald's recently unleashed a wave of new McCafe espresso drinks. Franchisees, however, claim that the golden-arched giant is trying too much to be like Starbucks and that their stores are hurting as a result.
Mark Kalinowski, an analyst at financial holdings firm Nomura, surveyed a couple dozen franchisers regarding the new drinks, and found that only two saw better than expected sales for the coffee items. In contrast, seven were underselling and nearly all listed complaints about how the beverages impacted their service quality. Many found the McCafe lineup to be too time-consuming to make without matching the quality of competitors like Starbucks that McDonald's is hoping to stand up against. One even went as far as to say that "time-consuming products like this do not belong on McDonald's menu."
That's not the only problem franchisers are having, however. Kalinowski also found that the increased costs of remodeling locations to incorporate all of McDonald's announced new changes are lowering profits to the point where some operators are going out of business. These changes include accommodating for the new self-ordering kiosks, curbside pickup, and delivery options that McDonald's wants implemented over the next few years.
Overall, all of this is putting a strain on franchise operators because they have to struggle with the cost of new equipment and remodeling, slowed service time on their drink stations that doesn't always translate to better sales, and an attempt to be like Starbucks that isn't delivering on quality. McDonald's will need to find a way to resolve these issues to keep its franchisees happy and in business.