September 2014

The American Public Agrees: McDonald’s Has the Worst Burger in America

According to a recent survey by Consumer Reports, McDonald’s has the worst burger in America. Consumers consistently rated smaller, upscale burger chains higher than what is arguably America’s most iconic hamburger franchise. And interestingly, McDonald’s wasn’t the only major fast food franchise to receive failing marks. Consumers deemed that KFC served up the worst chicken and that Taco Bell crafted the worst burritos. Subway ranked second to last in the sandwich category, beating out only Au Bon Pain.

So, if consumers are now bucking major fast food chains, where are they eating? Those restaurants that managed to steal top spots in the survey were a part of the growing fast-casual movement. For example, Chipotle was deemed the creator of the best burrito, and smaller chains The Habit Burger Grill and Portillo’s Hot Dogs won best burger and best sandwich, respectively. Upscale burger chains In-N-Out Burger, Five Guys Burgers and Fries, and Smashburger ranked No. 2, 3, and 4 in the burger category, while Chick-fil-A’s move toward a more fast-casual style has also been rewarded, as the chicken chain snagged the top spot for chicken.

The survey, released after the product-testing magazine surveyed 32,405 subscribers, who ate 96,208 meals at 65 chains, is indicative of changes in consumer behavior. Specifically, consumers want higher-quality, better tasting meals — even if it means they have to shell out a bit more cash or travel a bit longer. “Restaurants are a part of the millennials’ social structure, and they choose to spend less at meals so that they can eat out more often,” Darren Tristano, executive vice president of Technomic, a food-service research and consulting firm, recently explained. “Fast-casual dining in places like Chipotle and Panda Express lets the consumer guide the staff to prepare their meal just the way they like it,” he added.

The major difference between more upscale burger franchises, such as In-N-Out Burger and Five Guys Burgers, is the quality of ingredients. A burrito at Chipotle costs two or three times as much as a burrito from Taco Bell. Naturally, the chain is able to afford better ingredients than Taco Bell. Furthermore, such chains as Chipotle, Noodles & Company, and Panera are even offering meat that has been produced without the use of antibiotics in animal feed, an attraction for many health-conscious consumers.

The bottom line is that fast food chains, such as McDonald’s, are not necessarily trying to produce the best product. They are trying to turn something out as fast and cheaply as possible. It may be impossible for a chain to simultaneously keep costs low and produce a top-quality product. However, considering this shift in consumer preferences, franchises like McDonald’s and Subway may need to start trying harder.

 

Sources:

http://www.consumerreports.org/cro/magazine/2014/08/best-and-worst-fast-food-restaurants-in-america/index.htm

http://www.entrepreneur.com/article/235329

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him onTwitter for latest updates.

When Franchises Merge: Burger King in Talks to Buy Tim Hortons

It appears that Burger King is courting Tim Hortons. On Monday, Tim Hortons executives conformed that the two mega-franchises are discussing the possibility of the creation of a new, Canadian-based company. “They are in discussions regarding the potential creation of a global leader in the quick service restaurant business. The new publicly listed company would be headquartered in Canada, the largest market of the combined company,” a Tim Hortons press release explained in response to swirling rumors.

The press release further explained that 3G Capital, the current majority owner of Burger King, would continue to own the majority of the shares of the new company on a pro forma basis, and the remainder of existing shares would be held by Tim Hortons and Burger King shareholders. The release added that the two franchises would continue to operate as standalone brands, while sharing corporate services.

So, why are the two franchises looking to join? Well, the partnership would turn two already iconic franchises into one franchise powerhouse. “The new company would be the world’s third-largest quick service restaurant company, with approximately $22 billion in system sales and over 18,000 restaurants in 100 countries worldwide,” the Tim Hortons press release explained. The bottom line is that a merger could be mutually beneficial. Burger King could serve Tim Hortons’ well-established coffee, a highly advantageous move considering that fast-food franchises are currently battling it out to win the biggest share of the coffee and breakfast market. Similarly, Burger King’s global scope (the franchise has 1,000 locations in 98 countries) could dramatically help Tim Hortons’ global expansion efforts.

Furthermore, a move to Canada would open the potential for dramatically lower corporate tax rates (the country has the second-lowest corporate tax rate in the G-7). Such a move wouldn’t come as a surprise — a number of high-profile companies, including health-care companies Medtronic and AbbVie and convenience store franchise Walgreens, have all made headlines in the past few months by relocating to countries with lower corporate tax rates, known as inversion deals. The trend has even sparked the criticism of President Obama, who asserted that companies who engage in such mergers to avoid American taxes lack “economic patriotism.”

In spite of the potential rewards of the merger, it is still too early to tell whether or not it will be become a reality. “The transaction remains subject to negotiation of definitive agreements. There can be no assurance that any agreement will be reached or that a transaction will be consummated,” the release explained. “Any transaction will be structured to preserve these relationships and deepen the connections each brand has with its guests, franchisees, employees and community.”

 

Sources:

http://www.entrepreneur.com/article/236799

http://investor.shareholder.com/timhortons/releasedetail.cfm?ReleaseID=867457

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him onTwitter for latest updates.

FedEx Ruling Could Jeopardize Franchise Model

A new court ruling has dramatically blurred the line between employee and independent entrepreneur, putting pressure on both franchisees and those that rely on contractors. Last Wednesday, the Ninth Circuit Court of Appeals ruled that the labor status of 2,300 individuals working for FedEx Ground in California and Oregon had been misclassified. The court ruled they were employees, not independent contractors.

FedEx has always treated its drivers as independent contractors. “Today, FedEx Ground contracts with nearly 9,000 small businesses that are owned and operated by entrepreneurs who value independence and innovation and apply their own management skills to operate successful businesses,” the company’s website reads.

However, a lawsuit initiated by FedEx drivers alleged that the company exercised excessive control over the drivers — their appearance standards, what they are delivering, when, and how. The lawsuit alleged that FedEx controlled the drivers to such an extent that it compromised their status as independent contractors, essentially making them employees. It further contended that classifying drivers as anything but employees is a moneysaving scam by FedEx, enabling the company to have workers complete the same work as employees at UPS or the U.S. Postal Service for less pay and no benefits.

The judge sided with the drivers. “FedEx Ground built its business on the backs of individuals it labeled as independent contractors, promising them the entrepreneurial American Dream,” Beth A. Ross, the attorney at Leonard Carder who represented the Californian drivers, said in a statement. “However, as Judge Trott said in his concurring opinion, not all that glitters is gold.”

So, what does the ruling mean for FedEx? Well it looks like it will have to pay up for the misclassification, including millions of dollars for the costs of branded trucks, uniforms, and scanners, as well as wages, overtime compensation, and penalties. The ruling is currently only applicable to FedEx drivers in Oregon and California, so drivers in the rest of the country will maintain their status as independent contractors. But don’t expect an ending to this case anytime soon: It looks like FedEx is gearing up for an appeal to the Supreme Court.

All in all, this case is part of a nationwide trend of independent contractors seeking employee status, arguing that they face the level of control that any employee would be subject to, but without any of the perks. The National Labor Relations Board recently deemed McDonald’s a joint employer in employees’ lawsuits against the chain, while 7-Eleven franchisees in California are suing the franchise under the claim that excessive control rendered them employees, not franchisees. All in all, it looks like these lawsuits could mean a forced change in business models.

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.

How to More Effectively Run Your Business Meetings

As a small business owner or entrepreneur, you are probably used to calling meetings, whether you need to discuss a marketing campaign for a new product or go over some general employee guidelines and rules. But are you maximizing the power of the meeting? Take a look at how you can make your business meetings all the more effective.

Establish an objective. When calling a meeting, you always need to have a clear goal in mind. This will set the tone for the meeting and give everyone a sense of direction. Be sure to communicate this objective to your employees ahead of time.

Ask yourself, “Is a meeting really necessary?” Do not hold a meeting for the sole sake of holding a meeting! Try to meet the established objective via email or via a one-on-one conversation. If this isn’t possible for whatever reason, then call a meeting. The fewer meetings you have, the more effective they will be. After all, staff will come to dread meetings if you are dragging them into the conference room every few hours.

Furthermore, don’t forget that meetings require time and resources from your company. Think of it this way: Meetings cost your small business money. To figure how much, exactly, meetings cost your small business, multiply the hourly wage of each person present by the total length of the meeting. So if you need to have a meeting of one hour with five employees who each make $15 per hour, that one-hour meeting has a price tag of $75. That might not seem like a lot, but if these meetings are a weekly event, that adds up to the tune of $3,600 per year.

Develop an agenda, and stick to it. Remember when we said that you needed to establish an objective? Using that objective, establish a clear and coherent meeting agenda. This agenda should be used to develop a framework that will keep everyone on topic and maintain a good flow (remember, when conversation at the meeting strays, you lose time, which means your business loses money). To ensure that the highest priority objectives are met, always discuss the most pertinent topics at hand first.

Establish a clear timeframe. Once you have a clear agenda, figure out how much time it will take you to cover everything. Now, set a timeframe, and stick to it. When employees are stuck in meetings that drone on forever, they lose focus — and patience. If participants get distracted or begin to talk out of turn, step in, take control, and suggest that they set up a time to separately discuss issues that are not immediately relevant. Lastly, start the meeting when you say you are going to start it. 9 a.m. means 9 a.m., not 9:15 a.m. The most productive meetings always start on time and end on time.

 

Source:

http://www.entrepreneur.com/article/230559

Article by Jason Duncan, CEO/Founder of ManagerComplete.com. ManagerComplete is an online software application that helps multi-unit franchises manage operations effectively. Follow him on Twitter for latest updates.