Friday, May 2, 2014

Burger Wars Continued

Almost every day this week in Germany....there's another hamburger franchise update since the Burger King coverage on Monday night.

This morning.....there's chatter about the McDonalds one-Euro deals.

I've seen the advertisements and know the gimmick.  There's roughly ten items on the McDonalds menu which sell for one-Euro each.  It's a great sales gimmick.  The problem is.....they've undercut the regular prices and the franchise owner is basically selling items where he's getting no profit.  By the time you figure the five-percent franchise fee, the five-percent advertising fee, and roughly 150,000 Euro a year for the rent of the building and equipment....this one-Euro gimmick is zeroing out profits.

Naturally, the only thing that a McDonalds manager can cut corners.

From the German magazine Focus this of their sources laid into the fact that most all burger chains are now in frustrated economic issues and might be prone to cross the line on normally expected cooking and sanitary practices.

In 1984 when I worked at Ramstein....there were a limited number of American burger franchises around.  Today?  Just with Subway, which has become a popular trendy franchise operation in Germany.....there's roughly 520 operations.  McDonalds has around 1,400 operations.

The general problem here....if you stand back and look at the Monday night that ownership got themselves into a tight frustrating episode over profit margin.  Whether or not the mother company triggered this, or the burger wars going on, or the stupid advertising campaign....they are all now being hurt by the mess.

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