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The arrival of all-day breakfast at McDonald’s seemed a little like a no-brainer. For literally decades, consumers had complained about their inability to order breakfast menu items into the afternoon. Faced with declining sales, as we have discussed in recent abstracts, McDonald’s needed to find a way to attract people back to its stores and get them to buy more. So what could go wrong?

mhhe012885According to the franchisees that are now required to sell breakfast all day, nearly everything has gone wrong. A survey of 29 U.S. franchisee owners, who represent 226 of the company’s more than 14,000 U.S. restaurants, reveals their deep irritation and concern. The respondents to this survey complained of slower service, clogged operations, and lower order totals per customer.

In particular, because the menu is bigger, each store needs additional equipment. Especially for smaller stores, jamming that equipment into already crowded kitchens creates logistical nightmares. To be able to make all the items, the stores also need additional staffers, who take up even more of the limited space. Adding the equipment and staff is designed to improve the service, but instead, the franchisees explain that the overcrowding and the learning curve associated with making more items has meant service times are slower. Furthermore, some franchisees note that their financial position does not allow them to hire more people, and others highlight the challenges of finding enough qualified workers to fill their regular labor needs, much less expanded demand.

As another downside, the breakfast items often are less expensive than their lunch or dinner parallels. Thus, a customer who would have purchased a Big Mac might select a less expensive Egg McMuffin instead, which lowers the revenue that each store earns per customer.

But McDonald’s corporate office insists that the move is a smart one, reflecting the company’s responsiveness to customer demands. The press releases surrounding the launch signal its expectation that breakfast will be the key to new growth and increased revenues. Ultimately, the debate about whether all-day breakfast is a brilliant move or an expensive logistical nightmare can only be resolved by one party: customers, who either start visiting McDonald’s more often or else find a less expensive option for their fast food fix throughout the day.

Discussion Question:

  1. Is the all-day breakfast launch at McDonald’s a good idea? Answer this question three times, taking the perspective of the corporation, the franchisees, or consumers.

Source: Hayely Peterson, “McDonald’s Franchisees Say All-Day Breakfast Is a Nightmare,” Business Insider, August 16, 2015