For as long as I can remember, I’ve heard people say, “Man, I wish I could have gotten in on a McDonald’s franchise.” In most places, it’s been pretty much impossible to open a new one since all the good spots have been taken for a long time now – and the best locations don’t come up for sale every day. These days, though, I’m guessing you hear a lot less about people wishing they could have gotten in early with McDonald’s. They recently posted their worst sales decline in 10 years.
As consumers become more and more health conscious, they move towards slightly more expensive, slightly better quality food. Chains like Chipotle and Shake Shack have been doing well, while McDonald’s, often the poster restaurant for American obesity, is seeing declines. In a time when more people are going gluten-free, vegetarian, and vegan, McDonald’s doesn’t even offer a veggie burger (in spite of large online petitions requesting that they do so). Even Burger King has a veggie burger.
It’s especially puzzling that McDonald’s is missing the mark because many of their foreign locations offer the kind of health-conscious and upmarket items you can’t buy here in the US. Many countries enjoy vegetarian options, and French locations even offer macarons and tea in china. For more details on the collapse of McDonald’s demand, check out this article over at The Economist.
What does all of this mean for franchisees? Well for one, it means McDonald’s franchisees probably aren’t too happy right now. More importantly, it means that as investors and business owners, we need to think about food trends. If you’re considering a burger franchise, you need to make sure they’re adapting to the changing food landscape. Is it all greasy burgers? Or do they offer high-end extras like quality veggie burgers, shakes, unique sides, and perhaps even burger customization? Don’t discount the impact of specialty diets, either. That’s still an area where you can do great business. Because these choosy eaters don’t have good options everywhere they go, they become very loyal to the places that give them something reasonable to eat.
What do you think about the changing food landscape? Have you factored this into your decisions? Or are you styuck in a franchise system that doesn’t respond to the changing needs of consumers? Let us know in the comments!