McDonald’s Discounts Have Franchisees Frustrated

by Nate Wooley | April 19, 2013 11:29 am

McDonald's NYSE:MCD[1]The new discount menu rolled out by McDonald’s (NYSE:MCD[2]) 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[3].

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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