McDonald’s Financial Plans for 2016

McDonald’s has lots of plans for 2016, from putting up its robot-operated outlets, increasing its income and decreasing its capital expenditures.

Re-franchising restaurants is another important move and the company is looking forward to selling outlets that are company-owned. These outlets will be sold to franchisees that operate the restaurant and pay royalty fees to McDonald’s.

McDonald’s chief administrative officer, Pete Benson added that the fast food chain is planning to be 93% franchised. This would mean third parties will be operating all but 7 percent of McDonald’s outlets by the end of the year 2018. In the long run, the company aims to be 95% franchised.

The REIT or real estate investment trust structure would have seen McDonald’s spin off all its real-estate investments into a separate entity. The REITs are entities that were designed to control the company’s real estate asset. It is also expected to pay out significant dividends based on the assets’ income streams and capital appreciation.

Benson said that even as McDonald’s board “thoroughly assessed” the possibility of using its real-estate holdings to build the REIT, the company board decided that this plan posed numerous risks, including the latest commentary from the IRS concerning its tax treatment of projected REIT structures.

Recent news regarding McDonald’s reported 3rd quarter income came late last month. The income literally beat expectations since US sales went up by 0.9 percent. This was the first increase in company sales in 2 years. Following this good news, the company’s shares gained by 8 percent.

Last month, shares of Walmart decreased by 10 percent and many company executives warned that profits would be going down in the coming years. Hence, while it remains to be proven how the market will take McDonald’s, this fast food chain appears to be eager to avoid massive stock moves akin to what Walmart faced last month.

McDonald’s Dollar Menu

This fast food restaurant is not getting rid of the dollar menu. However, several elements have been slated for adjustment. The truth is that McDonald’s is continuously adjusting its value offerings and these were based on the demand and company sales.

During the later part of December 2015, numerous social media pages and web sites declared that McDonald’s will get rid of the dollar menu by 2016. This rumor quickly spread on Twitter and Facebook, with many customers aggrieved about this purported change.

The truth is, the fast food chain is simply tweaking this fabled dollar menu so as to rise out of the current sales slump. McDonald’s simply renamed its dollar menu and some items will still be offered at the same price, but others will cost more. This tweet was sent from the store’s official account so as to end all speculations.

Dollar menu fans should not be worried because the new offer is a lot better. Aside from items that remain to be priced at $1, there are other choices that could also be enjoyed. The latest offer will officially be implemented by 2016. According to the company’s spokeswoman, the new rollout provides several perks but she declined to identify the same.

The McDonald’s Dollar Menu Outgrows Its Name

This fast food giant, struggling to ensure its sales in an ultracompetitive environment, reported that it is currently testing another version of its dollar menu, which was later dubbed as dollar menu and more. Different items will be offered by $5, $2 and $1. This so-called shareable item includes the 20-piece box of McNuggets.

The national re-launching of the revised version of the Dollar Menu is continuously disturbing the minds of those who are fond of going to this fast food store. The company continues to evaluate or test the best value alternatives it has to offer to its customers.

Previously, the Atlantic published a chart depicting why McDonald’s removed its dollar menu. This piece actually mourned the loss of a cheap meal that’s been faced out because of fluctuations in supply chain costs.

Ending the Dollar Menu is quite a sad news after 11 years of existence, but this change would only reflect the simple truth. One cannot make money by selling burgers for $1. The Dollar Menu accounted for more or less 1/7 of McDonald’s total sales. It can be remembered as a brilliant marketing gimmick, but is now referred to as an anchor both metaphorically and economically speaking.

The move opened the eyes of franchisees since they’ll no longer be able to make profits by selling processed cow meats using low prices. This fast food chain experimented with increasing prices. In addition, they have tweaked their offerings so as to appease its customers.

It can be remembered that McDonald’s tried to rearrange the offers in 2012, but such contemporaneous tweaks remained to be unpopular. The company hopes for a much better customer response in 2016. Who knows, people might actually love this fast food stores Dollar Menu and more.

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