One of McDonald's (NYSE: MCD) strengths has always been its consistency. While one location might include a play area and another might have a larger dedicated McCafe space, if you walk into one of the burger chain's restaurants in New York, the menu will be exactly the same as you'd see in Las Vegas or Cleveland.
That's about to change. The company has decided to allow franchisees to modify its all-day breakfast offering, according to a report from Nation's Restaurant News. That sounds like a small thing -- and McDonald's wants to present it as simply allowing for local preferences -- but it's actually a pretty major shift that could lead to consumer confusion.
This policy shift follows the company's recent moves to drop its higher-end burger offerings and trim its late-night menu. Changes to all-day breakfast could begin at some locations as soon as July, according to NRN.
McDonald's is going to allow franchisees more choice in how to offer (or not offer) all-day breakfast. Image source: McDonald's.
What is McDonald's doing?
"Giving local restaurants the ability to select the items they serve for their all-day breakfast menus means an even better, faster experience for customers, day and night," the company said in a statement.
That sounds nice and, in theory, it makes sense. There was already a small amount of leeway for franchises in how they approached the all-day breakfast menu; some chose to offer either biscuit or English muffin-based sandwiches all day, but not both. Under the new rules, franchisees will have the option of not offering certain breakfast sandwiches outside of the morning hours, or be able to use different menus for afternoon and late night.
This is McDonald's giving its franchisees the power to make adjustments based on their stores' sales patterns. However, it means sacrificing of a fraction of the consistency that sits at the core of the chain's appeal. There's a degree of comfort for customers in knowing that an Egg McMuffin is going to taste the same wherever they go, and also in knowing that they can always get one, regardless of location. Soon, customers who are traveling will lose that certainty.
That could lead to visitors simply opting to skip the fast food chain, or becoming angry when they get there and find out they can't get what they want. That could revive the sorts of complaints that were more common when customers arriving at 10:30 a.m. or 10:50 a.m. might find that the grills had shifted into lunchtime mode, and that their breakfast menu choices were limited to whatever had been made but not yet sold.
Franchisees versus customers
When McDonald's finally launched all-day breakfast, it was a decision to give customers something they'd been asking for for decades. It also eliminated a pain point for the front-line employees who no longer had to tell diners that they couldn't have what they wanted. But keeping a larger menu available meant added hassle and expenses for franchisees.
This latest move is a sign that McDonald's is shifting the balance of its priorities from keeping consumers happy to keeping franchise-owners happy. That's an understandable reaction to the growing unrest from those franchisees over the cost of initiatives like its experience of the future concept and McCafe expansions.
This is a dangerous tightrope the company has to walk. It needs to keep franchisees on board and excited about making the often-expensive changes that corporate wants, while also not alienating its core customer base.
Depending on how far franchisees go with this new menu freedom, it possible that company could find it has tipped the scales too far in favor of franchisees. The same-store sales gains the chain has won with all-day breakfast have been central to its recent performance, and the team at headquarters will surely not want to see any of those gains erased.
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