Tag Archives: McDonalds

McDONALD’S STOCK UP BIG! IS IT TOO LATE TO BUY?

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ALL DAY BREAKFAST IS COMING! McDONALD’S NEEDS HELP!

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ALL DAY BREAKFAST IS COMING! McDONALD’S NEEDS HELP!

Lots of chatter among investors relative to McDonald’s serving breakfast all day. In our opinion, this is far from a game changer. Not going to affect other breakfast purveyors, such as IHOP and Denny’s in casual dining, or Dunkin’ and Starbucks in quick service, in fact many others are piggybacking on MCD advertising to increase renewed emphasis on their own breakfast offerings. McDonald’s corporate still in relative disarray, with lots of franchisees looking for more consistent direction from above. Marketing message has been muddled for some time now, and industry trends have been unforgiving for operators functioning on less than all cylinders. McDonald’s stock doing better lately, but best thing going for MCD stock is the possibility of financial engineering of some sort relative to their huge real estate holdings.

YOU DON’T HAVE TO REINVENT THE WHEEL. VISIT THE GRAVEYARD, DON’T END UP THERE! – available to non-subscribers

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I have followed the restaurant industry for four decades; have invested hundreds of times in chain restaurant companies (public and private). Have lost more times than I normally like to admit, and fortunately have earned a lot more than I have lost. I consider it “therapeutic” to review some of the previously public companies that have disappeared. I have studied them all, invested in and/or advised some of them, and interfaced with virtually all of the management teams. Industry legends such as Norman Brinker (Brinker Int’l), Dave Thomas (Wendy’s), Jim Patterson (Long John Silver’s), Harold Butler (Denny’s), Jim Collins (Sizzler), Allan Karp (Karp & Reilly), and many others were keynote speakers at my annual Restaurant Industry Conference during the eighties and nineties.
Among the companies that appeared (in no particular order) were: Max & Erma’s, Po Folks, Rax Restaurants, Shoney’s, Sizzler, Skolniks, Uno Restaurant , Magic Restaurants, GD Ritzy’s, D’Lites, Checkers, Daka International (Fuddruckers, Champps), GB Foods (Green Burrito), TPI Restaurants, Vicorp , Ground Round, Morgan’s Foods, Bayport Restaurant (Crabhouse), Blimpie, Boston Chicken, Main Street and Main (TGIF), Wall Street Deli, American Family Restaurants, Austin’s Steaks & Saloon, Boston Restaurant Associates (Pizzeria Regina), Italian Oven, New World Coffee, Pudgie’s Chicken, Rattlesnake Holding, Shells Seafood Restaurants, Rally’s, Buffets, Ciao Cucina, Logan’s Roadhouse, Rainforest Café. Most of these companies are GONE, None are publicly held any longer.
There are many others that didn’t necessarily appear at my conference. Remember Chi Chi’s and Ryan’s Family Steakhouse, two of the most attractive concepts from the early eighties. Both had fully loaded sales/investment ratios over 2:1 at the time.
Today there are established companies such as McDonald’s, Wendy’s, Jack In The Box, Yum Brands, Chipotle, Panera and others, as well as a new crop of publicly held companies such as Papa Murphy’s, Noodle’s, Potbelly, Habit Restaurants, Wing Stop, Rave (Pizza Inn and Pie Five), Zoe’s, One Hospitality (STK), Ignite (Joe’s Crab Shack and Brick House Tavern), Del Frisco’s, Fiesta (Pollo Tropical and Taco Cabana, Del Taco and others. The obvious message for restaurant managers, investors, lenders, analysts and investment bankers: There are lessons to be learned; hopefully I’ve learned a few, how about you?