Three Things McDonalds Does Wrong

I am not going to bore you with another reason to raise the minimum wage.  You simply have to read this blog.  I have already spoken on it.  I am simply going to explain that the problems that McDonalds and the fast food industry have brought on themselves.  I worked for a McDonalds for about 4 months and am grateful that I was able to escape.

1.  Too many franchises.

Within a 10 minute drive from my home, there are no fewer than 7 McDonalds outlets.  In Riverdale, Utah, there is a McDonalds inside Wal-Mart and another right across the street.  There are is one in Roy, Utah.  There are two nearby in West Haven, Utah. One near 40th and Midland Drive.  The other is just east of the 21st Street interchange with I-15.  In Ogden there is one near 12th and Washington.  There is another near 40th and Washington witch is technically South Ogden.

There is a reason for this. McDonalds doesn't consider food to be primary to their business model.  It is real-estate.  They purchase the prime locations for franchises, for no other reason than to keep competitors like Burger King and Subway out of the neighborhood.

Source

What has happened as a result?  The restaurants compete against each-other for customers.  This means that they must keep their prices low, perhaps too low, to really operate efficiently.  More supply with the same level of demand means lower prices for your product.  That is the main reason why McDonalds employees are paid at or near minimum wage.  The franchise owners can't afford to pay more.

Because McDonalds is an industry leader, nearly everyone else in the fast food market has to follow suit.  If you are going to compete with McDonalds, you have to operate on a small margin as well.  Which means low wages industry-wide.

2.  Low-quality food

I am certainly not going to endorse the findings in Super Size Me or any other trashy documentary.  These guys are too biased in their findings, and it is obvious. 

There are many counter-arguments, however.  KSL recently produced a news story about a many who has had at least one Big Mac every single work day for several years.  That is all he will eat for lunch.

However, when the food is cheap, it is also low in quality. Sure, it is not as bad as it could be. McDonalds has the buying power to get higher-end cheap food. But it is still cheap food.  Very few are going to argue with that point.

3.  Career Path

Hey, did you hear the one about the famous celebrity chef who got his start at McDonalds.  Me neither.  Here is a list of people who began working at McDonalds and became famous.  None of them for their cullinary skills

http://www.businessinsider.com/celebrities-who-used-to-work-at-mcdonalds?op=1

Of course there was this story as well...

http://news.mcdonalds.com/US/news-stories/McDonalds-Quality-Ingredients-Take-Center-Stage-D

I will concede that if a famous chef or a top chef ever worked at McDonalds, they would consider that knowledge bad for their image and would hide it from the public.  Most famous chefs will say that they began their careers washing dishes at some mom and pop bakery or restaurant and worked their way to the top.  From my McDonalds experience, I would argue that most people who work their way to the top a McDonalds want to become franchise owners rather than some famous chef.

It has also been my experience that if an employee gets a better offer elsewhere and wants to leave, there is little resistance in letting him go.  There are hundreds of people out there who want that job.

We have three things that McDonalds has done to make their own bed.  Let's see if they decide to fix it.