McDecline

When McDonalds lost the disastrous McLibel case I used to say that it wouldn’t be the greens or the anti-globalisers that’d bring down the fast food giant but much more prosaic and unpredictable business problems – lifestyle changes, weird new competition (Frappuccino anyone?) and an exhausted brand. Hey! I was right.

“In the past, owner-operators were McDonald’s evangelists. Prospective franchisees were once so eager to get into the two-year training program that they would wait in line for hours when applications were handed out at the chain’s offices around the country. But there aren’t any lines today, and many existing franchisees feel alienated. They have seen their margins dip to a paltry 4%, from 15% at the peak. Richard Adams, a former franchisee and a food consultant, claims that as many as 20 franchisees are currently leaving McDonald’s every month.”

Business Week has an excellent survey of McDonalds’ mounting problems and a useful timeline (free registration required).