Friday, September 23, 2005

More to come from McDonald's?

Yesterday, a restaurant analyst quoted McDonald's CFO Matthew Paull as saying the burger behemoth is "very open to [strategic] ideas." That suggests "that given enough time the announced IPO of Chipotle may not be the only strategic move McDonald's makes," Buckingham Research's Mark Kalinowski observed in a communication to clients.

The company has already said it will not roll its massive real estate holdings into a real estate investment trust, a technique used in the hotel industry to realize the value of the dirt beneath a business.

Nothing has been said about Boston Market, McD’s other subsidiary brand, or smaller initiatives like its licensing programs.

2 Comments:

Anonymous J.J. said...

I hope Mickey D's is smart enough not to expand its Chipotle restaurants too fast. This always seems to be the problem with hot concepts. Not enough qualified management experience for the rapid expansion envisioned by the big boys upstairs. $$ signs become larger than the product can handle!
Of course, that's just my opinion.

September 26, 2005 at 12:54 PM  
Anonymous NRN SHOW TEAM said...

Any veteran of the business would readily agree with your opinion. It's the pratfall that's tripped up more growth chains than factors like the availability of capital or inherent faults in the concept.
You can only hope that McDonald's learned the lessons from Baja Fresh, or its own Boston Market, before that concept was added to its fold. That's why the partial spin-off could be extremely interesting. Franchising would be a tempting way to expand the chain in a flash, but that poses the very risk you're citing. The real questions are, Will shareholders in the new company understand that? And if not, will McDonald's be able to prevail with its expansion strategy for the brand?

September 27, 2005 at 8:53 AM  

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