Thanks to BuzzFeed.
Thanks to BuzzFeed.
Jamba Juice‘s response to McDonald’s getting into their core smoothie business is clever but ultimately futile.
Problem with succeeding at 1. and 2.:
The erosion of franchisee-pioneers’ sales are no laughing matter for Jamba Juice or all the other smoothie-dependent investors.
Equity in business: Who wants to buy you out of your death-struggle with a nearly-unassailable, cultural icon with an almost perfect record of supply management brilliance ?
Barfblog is funny. I think, anyway.
Banks are not required to report fraud occurrences publicly.
Watch the video
News item: January 20, 2010, Maccas EFTPOS scam
An international crime gang is targeting fast food stores in Queensland, stealing EFTPOS terminals and cleaning out accounts.
Quote from a cop:
Happy days for the crook and sad days for the victim.
Other Austrialian news reports:
A McDonald’s spokeswoman remained tight-lipped about how many of its EFTPOS machines had been compromised.
“We can’t discuss any details of the investigation,” she said yesterday.
A security upgrade of McDonald’s EFTPOS terminals across the country had been completed the week before Christmas, she said.
The upgrade followed attacks on McDonald’s outlets in Perth last year.
2. EFTPOS scam reports ‘disturbing’: Rudd, Prime Minister Kevin Rudd has described reports of a nationwide credit card skimming scam as “highly disturbing”.
NSW Police say every Australian capital city and some regional centres have been hit by the scam, which has netted more than $50 million in NSW alone.
Six people have been arrested in NSW in relation to the scam, which police say involves criminals committing armed robberies to get hold of EFTPOS machines.
Fraud squad investigators say the criminals have ripped off Australian cardholders for at least $50 million.
NSW Police Strike Force Wigg told the Daily Telegraph that 50 members of an Asian-based criminal gang had been identified as “persons of interest”.
Detectives say the skimmers were mostly operating in all capital cities and in major rural centres.
Andy Dick joins in in this PETA campaign.
I must say.
FranchiseFool broke into North America this story, earlier today: McDonald’s: Lovin’ the Profits while Targetin’ the Poor.
Leaked confidential papers (confirmed by an anonymous franchisee) indicates that McDonald’s will increase their food prices, disproportionally in lower-income communities.
It seems their research shows that the poorer someone is, the less likely they’ll complain or switch to other quick service restaurants.
ABC News reports in Inspectors to watch McDonalds pricing that at least one state government does not appreciate the use of so-called demand-based pricing by the multinational:
The South Australian Government has fast food chain McDonald’s in its sights over news of a new pricing structure.
It says the food chain must reveal whether it plans to raise prices at selected restaurants, especially those in some lower-income areas.
In the accompanying audio clip, SA Consumers Minister Gail Gago is quoted as saying, if the reports are true, McDonald’s is behaving in an “incredibly appalling and disappointing” manner and she suggests consumers may want to communicate directly with McDonald’s on this matter.
In another article, McDonald’s CEO, Catriona Noble seems to be saying that income levels relate to restaurants and not to citizens and that somehow increasing prices, increases consumer choice:
…prices were not based on socio-economic factors but rather on a restaurant-by-restaurant basis, with customer price sensitivity measured at different outlets.
“We really let the customer speak,” she said. “And that’s exactly what customers have the right to do. (They can say) ‘hey, that price increase is too much for me to handle and I’m going to come to you less often.”
I know of no other metric other than mean household income for price sensitivity.
Ms. Noble could have cleared this confusion up by simply stating that household income is not used for marketing purposes by this corporation. But that may have created a certain legal vulnerability.
A world-wide economic recession lasting one to two years is the most optimistic outlook.
And how do the masters of franchising, globalization, and supply efficiencies respond?
They not only identify those they’ve identified to be least able to resist (ie. the poor) but increase prices to those communities.
Some could be consider this a blatant opportunistic predatory pricing scheme by a brand bully.
McDONALD’S is lifting prices in poorer suburbs where it believes consumers are more likely to accept higher charges without complaint.
Costs were previously based on restaurant overheads and ingredient prices.
But the multi-national fast-food chain is using socio-economic factors to determine charges under a new “demand-based pricing” scheme.
I love Australian franchisees because you know where you stand:
A McDonald’s franchisee, who asked to remain anonymous, said the biggest price rises were concentrated in low-income areas.
“In general, the poorer suburbs will pay more,” the franchisee said.
An accompanying television clip (see McDonald’s rip-off) says that McHappy meals will increase by 16.5%.
And how is this affecting McDonald’s USA where the profits eventually go? Here’s a sample of headlines about Oakbrook’s 2008 results:
I wonder what role “socio-economic factors” and “demand-based pricing schemes” have played in differential within North American communities?
In Canada, 1 in 5 children live in poverty.
The complication is that Class #1 include:
The few former #2 who have become traitors to Class #1 (ie. aware but not profiting from the status quo) and are stilll talking are cranky, paranoid, broke, rude and cynical.
An accurate observer, however, concludes the following: Financial failure or success in business format franchising is mostly luck.
There are winners but, despite the spin, they have the skill involved in picking the winning lottery ticket. Don't tell me about the 30 year McDonald's franchisee: they don't make those agreements anymore.
BS Differentiating Characteristics
1. Intelligence: Notwithstanding the name-calling, those that lose at franchising are often the smartest ones in the orientation class. The ones forced to the wall often are the ones that realize the game, after they sign and try to rally the troops. Communication skills, persistence, credibility and curiosity are the a sure ticket to franchise bankruptcy.
2. Lack of Adequate Pre-sale Due Diligence: simply an excuse for industry apologists using hindsight bias to force silence via shame. Believe me I've met lots of "successful" franchisees who did zero due diligence. Everyone admits that DD is impotent against franchisor opportunism which is played out in 1,001 seemingly random ways.
3. Laziness: Franchisees work like hell and only usually collapse when they hit their own personal wall of mental, physical and financial limits. It takes a long time to learn this foreign language (franchise jargon).
4. Most success is within Franchisee's means to Control: Almost all of the decision making is taken via the franchise agreement. Tough to argue both sides of an argument at the same time (ie. Franchisee is 100% responsible while franchisor has 100% control of assets). So one-sided that some franchise agreements have been declared an employee:employer relationship by U.S. state Courts and labour departments.
5. Deceit, Gag Orders, Shame, PR, Failure to Acknowledge: Why does the industry spend so much time controlling information (gag orders, use of shame, SLAPPs, 3 Wisemen on Blue MauMau, counterspin, undue legislative influence, lobbying, etc.) when they could simply commission credible academic research to prove that franchising is a legitimate business?
Their failure to fund (which they can clearly do) and hand over information to independent researchers indicates that they want to suppress [not advertise] independent, verifiable, accurate success rates. They are, in a sense, judged guilty by the actions that they choose to avoid.
That you have yet to join that class, speaks of your level of awareness. That’s all.
When you are a franchisee, you quickly learn what is and is not allowed to be said in public.
It goes like this, you can talk publicly:
Those are the basic rules (norms, standards) of every trademark system that I have known.
These cultrual values are expressed during the regional and national meetings. This is what the meetings are principally for: the reinforcement cultural values within a group via a type of public demonstration or play.
Franchisors are very attuned to attitudes of dissent. They separate franchisor-friendly behavior which is rewarded and detect of franchisor-unfriendly attitudes and behavior which is punished.
One of the ways of showing the master’s pleasure is through the always-present Awards Ceremony. Such juvenile awards such as “Top Franchisee” or “Best Team Player, 2008″ are handed out with the obligatory publication of the “grip and grin” photos. No speeches are allowed, however, unless the franchisee is one of the “anointed few: the royal priesthood, a franchisee set apart” (ie. a franchisee who is so deeply co-operative as to be a virtual extension of the current franchisor). These are baubles bestowed upon franchisees who are “on the team” (ie. acting as a franchisor collaborator).
It was no mistake that McDonald’s Canada rewarded the southwestern Ontario franchisee who was the token franchisee on the government-lead Franchise Sector Working Team. Within a month of the law being passed (the law was pushed by franchisors, not franchisees), this four-store operator won a major award: an important symbol to the hundreds of Canadian McD operators of how to properly lick the hand.
It is very frequent that a hopelessly-compromised, compliant franchisee is forwarded as a spokesperson when a law is being proposed. this is where the term “House Slave” comes from: a, by comparison, a well-treated slave that protects his master’s interest, especially against the lower status slaves: the field slaves.
Humiliation is the usual punishment breaching the culture of franchising. The franchisee is felt to be alone (“Funny: You’re the only one who has mentioned this problem.”), the cause of the problem, lazy, overly critical and stupid.
Shame corrodes everyone’s self-view as an autonomous adult. It decreases the person’s ability to resist authority.
The Courts: Guilt by Association This is the role of the Courts play in franchising since the Courts hold a monopoly on the coercive enforcement of the law in our society. Franchisees, lacking the conceptual and educational prerequisites to defend themselves, recoil reflexively at the thought of a lawsuit because they believe that only the guilty are ever sued.
No wonder I keep getting encouragement to keep writing via minor Ontario court officials: Justices do not like the law being used as a commercial intimidation tool.