Saving money by, er, closing down

Love those self-order kiosks at McDonald’s. Takes twice as long to order anything, with an endless frustration of trying to find which options are on what page.

Now McDonald’s has figured out how to end the frustration. With a global technology failure that has put the kiosks out-of-order, forcing the closing of many outlets worldwide:

Well, at least they don’t have to pay those kids on the front counter.


Don’t they have an app you can use to order? I’ve been ordering Starbucks via app for years now.

The app was probably also down.

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Apparently McDonalds has serious problems with ANY “technology.” McDonalds is infamous for forcing its franchisees to only use ONE particular brand of shake machine. Unfortunately for McDonalds customers, that brand of shake machine has numerous design flaws that make it both time consuming to clean and likely to fail, requiring parts which are only available from that single manufacturer. It’s hard to tell exactly how much downtime is due to required cleaning versus failures. A full cleaning cycle is rumored to take 4 hours (not all of that requires human labor but the machine itself is obviously not capable of producing shakes). Much of the downtime simply could be due to managers deciding to prioritize other work and not bothering to clean the machine and leaving it down instead. Of course, its easier to explain to a customer by claiming the machine is “down” rather than admitting the owner just doesn’t want to allocate labor to clean the machine.

How bad is the problem? If you believe the internet, between 10 to 15 percent of all shake machines at McDonald restaurants are out of service at any given moment.

In a strange twist of fate, this chronic problem with these machines triggered a lawsuit over “right to repair” and disparagement when a startup designed a gadget which could interface with the Taylor machines and provide better diagnostics about what was wrong with a machine. The startup made inroads selling the gadget to restaurant owners until McDonalds corporate sent a letter to all restaurant operators claiming the device could cause serious injury and should NOT be used. The startup then sued McDonalds.


This really makes no sense, unless you consider something nefarious is going on. Not having a working machine, means disappointed customers, and lost revenue. How is that a benefit to the company? Spending inordinate amounts of time on maintenance and paying high prices for parts hurts franchise profits, with no benefit.

A couple years ago, I took a look at Mickey D’s balance sheet: negative equity, several years running, but not in a constant downtrend, like BA. 2020: -$7.8B, 2021: -$4.6B, 2022: -$6B, 2023: -$4.7B. Shares in treasury: 2020: 915.2M 2021: 915.8M 2022: 929.3M 2023: 937.9M

My first paranoid thought is the shake machine company is doing something that Mickey D’s corporate finds more beneficial to it that corporate’s share of the lost revenue from the labor intensive, breakdown prone, expensive to repair, machines, and corporate gives not one whit what the impact is on the franchisees. Smells like a riff on RS management’s attitude “we do the franchisees such a huge favor letting them be franchisees, they should be happy to put up with a POS shake machine”.

Or, maybe the shake machine company is doing something extra special for the MCD “JCs”, personally?


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slovenly stupidity is now so far widespread that it is replacing JC greed as a solid explanation of almost everything in large USAian corporations. (Less and less impressed by many German Japanese etc companies as well)

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Not really. What’s that quote? Never attribute to evil something that can be explained by simple stupidity? Something like that.

I understand why McDonald’s only allows one vendor for franchise equipment. That’s the essence of franchising: to make everything consistent even though you have hundreds of owners and thousands of locations.

I’d say one VP somewhere made a terrible mistake and chose the shake machine vendor (yes, there could have been something nefarious there, dunno) and only later, once the rollout was complete, did the problems surface. (Yes, including the required cleaning time; it may have been the best available at the time.) Now you have 20,000 of the units in service amid a general refresh, and the franchisees are complaining about having to spend so much on that that there’s no appetite to also require them to replace the shake machine as well.

OK, maybe not. Pure speculation on my part. Why they would disallow a fix from a different vendor is a good question, but having dealt with the franchise world a bit I’ll say there are lots of push-pull things that go on below the surface. I’ll also say that the lack of availability of the shakes is now a joke, and somebody should get fired. Or at least severely whipped - including the CEO at earnings time every time there’s a miss.


I am looking at the asymmetry of the cost/benefit situation. Corporate decrees everyone buy one model of machine. Who pays the maintenance and repair costs, and loses the most revenue from the machine not working? The franchisee. There is little downside to corporate from specifying a POS machine, but potential for payments to corporate, or the “JCs” personally, from the vendor. Sort of like the insurance industry pressing for new car safety standards. The insurance companies benefit from lower claims expense, but it is the car purchasers who pay the compliance costs.

This entire situation is ironic, given the way that Ray Kroc first became aware of McDonald’s, and, at least as presented in the film, the cause of the final break between Kroc and the McDonald brothers.


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