As the fast food industry grows and competition increases, established businesses have to compete to stay relevant. A separate faction of the world-renowned McDonald’s has questioned the franchise plan to launch a $5 meal bundle. While the group applauds the company’s effort to ensure affordability for its consumers, it is also worried about its sustainability.
The advocacy organization is putting pressure on businesses to invest in the discounted offering, so it has to ensure its long-term viability for operators. The letter claimed that not enough profit was generated to ensure that the 30% discount would be sustainable.
This letter referred to McDonald’s business model as a penny-profit enterprise, as it must be willing to make some sacrifices. Last week, it was revealed that the $5 value meal will be available on menus starting June 25 and will stay on the menu for a month.
The value comprises four pieces of chicken nuggets, fries, a drink, and a McChicken or McDouble. The items that make up the pack would cost a lot more individually. This is part of the franchise’s effort to compensate customers who left during the recent price increase.
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After an original proposal failed to clear internal barriers, Coca-Cola reportedly contributed marketing expenditures to make the arrangement more enticing for McDonald’s and its franchisees. “We often engage with our customers on marketing activities to fulfill consumer demands,” Coca-Cola stated in a statement last week. This aids in the joint growth of our enterprises.
In response to the NOA letter to its membership, McDonald’s declined to respond. The business added, “We know how much it matters to our consumers when McDonald’s delivers genuine value and conveys it through national advertising. That has always been the case and has never been more crucial than it is right now.
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The business has already reported that since 2018, U.S. franchisee cash flows have increased by about 50% on average. McDonald’s has previously stated that 2023 will be one of the finest years for franchisee cash flow in the company’s history.
The NOA letter suggests that the business keep innovating on the menu, going beyond the $5 sale. It suggests considering reintroducing snack wraps with current chicken to offer more affordable options for owners.
ALSO READ: McDonald’s Proposed $5 Meal Deal Sparks Concern Among Franchisees
The committee also proposed introducing the top two drinks from CosMc’s, a McDonald’s offshoot brand, to flagship locations to wow patrons and staff.
Upscale establishments are attempting to attract fast-food patrons. For about $10, Chili’s and Applebee’s both offer burger meal bargains.
Recent studies have shown that the breadth of McDonald’s pricing has increased over the previous 10 years, with several menu items seeing double increases.
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