Yahoo Finance Mcdonald's Franchisee Group Applauds $5 Value Meal, Urges For More Support
An independent group of McDonald’s (NYSE:MCD) franchisees has expressed support for the company’s upcoming $5 value meal promotion, while also advocating for more backing from the corporation to ensure the discounted offering’s long-term viability.
According to a CNBC report on Tuesday, the National Owners Association (NOA), a franchisee advocacy group, penned a letter to its members stating, “The fact remains that to provide the consumer with more affordable options, they must be affordable for the owner/operators. McDonald’s vast resources and financial investment are essential to any sustainable affordable strategy.”
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The letter further described McDonald’s business model as a “penny profit business, with 10-15% margins,” and argued that there isn’t enough profit to discount 30% for this model to be sustainable without a financial contribution from McDonald’s.
CNBC had previously reported that the $5 value meal, which includes a McChicken or McDouble, four-piece chicken nuggets, fries, and a drink, would be available from June 25 for about a month. This move comes as lower-income consumers are pulling back from certain restaurants due to persistent inflation, prompting brands to offer greater value to customers.
The NOA letter also suggested that McDonald’s should continue to innovate on the menu, reintroducing items like snack wraps that use existing chicken breasts, and creating affordable options with lower food costs.
McDonald’s declined to comment on the NOA letter. However, in a previous statement, the company noted that cash flows for U.S. franchisees have increased nearly 50% on average since 2018, making 2023 one of the best years for franchisee cash flow in the company’s history.
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