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McDonald’s Discounts Have Franchisees Frustrated

Some restaurant owners have doubts about new direction


McDonald's NYSE:MCDThe new discount menu rolled out by McDonald’s (NYSE:MCD) leaves some owners concerned over profitability.

The new menu — with an emphasis on value and lower prices — has franchisees worried about their long-term success, Nation’s Restaurant News reports.

With the lower prices and aggressive discounts being advertised heavily by the chain, restaurant owners are concerned about not being able to sell more profitable full-priced items. In a survey conducted by analyst Mark Kalinowski, owners said the level of discounting rated 8.32 on a 1 to 10 scale. The new menu pricing has also led to dissatisfaction among the owners as they grade their relationship with the chain at a 1.93 on a 1 to 5 scale with 5 being the best.

McDonald’s has not commented on the report, as the company is anticipating its upcoming earnings report. A spokesman did say that the report surveyed only 25 U.S. franchisees out of a possible 2,500.

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