When asked to rate their forecast from 1 (poor) to 5 (excellent), franchisees surveyed reported an average of 1.84. This marks the lowest level since the firm began polling franchisees in 2003.
“It is striking to hear the franchisees so concerned about the direction of the business,” said Mark Kalinowski, restaurant analyst at Janney, in a phone interview. “I think that gets to a lot of challenges that McDonald’s is facing.
Franchisees cited a range of issues including a complex menu, the economy and marketing missteps. On the company’s last earnings call, McDonald’s CEO Don Thompson admitted the chain had been “chasing a few too many limited-time offers” and said the company is working to make sure it’s not “implementing too many products.”
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Despite hopes that the U.S. consumer would show signs of being on a “better footing” by now, Kalinowski said the fast food giant’s still operating in a challenged environment.
Based on the survey’s results, Janney lowered its U.S. same-store sales forecast to a 2.6 percent drop for June and a 1.8 percent decrease for July.
It’s also dropped its full value estimate for McDonald’s to $96 from $98.