Burger King, Wendy's, McDonald's, and Yum! Brands: 4 Important Changes

New payment platforms, management changes, and new products dominate the headlines in the fast food industry.

Apr 2, 2014 at 4:00PM

Established fast-food companies face serious headwinds in the form of intense competition from fast-casual chains, bad publicity stemming from China's bird flu scare, and changing consumer tastes and patterns of consumption. Recently, fast-food chains Burger King (NYSE:BKW), Wendy's (NASDAQ:WEN), McDonald's (NYSE:MCD), and Yum! Brands (NYSE:YUM) made some announcements that shed light on their future.

Mobile payments
In a dual attempt to cater to a consumer base increasingly comfortable with making purchases on their mobile phones and to increase traffic efficiency, Burger King and Wendy's made successive announcements that they will begin taking mobile payments, according to Nation's Restaurant News. Wendy's reported a greater number of visits during tests, according to the Associated Press. The format for both Wendy's and Burger King will generate a number to be given by the customer to the cashier, which means customers will not need to hold up a device to a scanner.

The conversation in the media emphasized the lack of an app from industry leader McDonald's, which claims that it wants to get things perfected before release.  McDonald's executives gave indication that it may need to release "some things" sooner rather than later and work out the bugs as they go, serving as indication that McDonald's is running way behind in this race. 

McDonald's news
Tim Fenton, the chief operating officer of McDonald's, will retire effective October 1.. McDonald's will eliminate the COO role, with duties being divided between the CFO and its chief brand officer. The regional executives in charge of the United States, Europe, and APMEA (Asia-Pacific, Middle East, and Africa) areas will report directly to CEO Don Thompson, eliminating a layer of red tape and a high-salaried position.

Management turnover such as this generally means that investors should stay alert and pay attention to changes good or bad in the near future.

In other McDonald's news, in order to lure customers away from competing chains specializing in coffee, McDonald's has decided to offer customers a small McCafe coffee from March 31 to April 13 free of charge.

Yum! Brands in the spotlight
Yum! Brands garnered a great deal of attention last week when its Taco Bell subsidiary released its much-anticipated breakfast menu. Taco Bell will now open at 7 a.m. to offer things such as waffle tacos, breakfast burritos, Crunchwraps, and orange juice, according to the press release. Everything on the menu comes with a price tag of less than $5. Taco Bell launched a sort of in-your-face marketing campaign featuring people named Ronald McDonald endorsing the new Taco Bell breakfast.  

Yum! Brands also decided to introduce a revamped KFC menu in China in an effort to reengage customers after the bird flu scare in that country last year. The company press release says that KFC China will update its menu at least once a year. This year, KFC China will introduce 15 new products, including chicken sandwiches, rice dishes, and desserts. 

Looking ahead
Wendy's and Burger King's acceptance of mobile payments will most likely boost traffic efficiency, resulting in higher volume and increased customer satisfaction -- in turn resulting in top- and bottom-line growth serving as catalysts for capital gains and dividend increases for its shareholders. When it comes to McDonald's, a lack of a mobile payment platform, management restructuring, and promotions only mean that it's grasping at straws for a new strategy to stay relevant. Yum! Brands indicates it wants to move forward from past issues with product and menu innovations. The restaurant industry is competitive, and companies must innovate in order to stay relevant. 

More companies innovating to make you rich
The one sure way to get wealthy is to invest in a groundbreaking company that goes on to dominate a multibillion-dollar industry. Our analysts have found multibagger stocks time and again. And now they think they've done it again with three stock picks that they believe could generate the same type of phenomenal returns. They've revealed these picks in a new free report that you can download instantly by clicking here now.

William Bias owns a share of Burger King Worldwide and shares of McDonald's. The Motley Fool recommends Burger King Worldwide and McDonald's. The Motley Fool owns shares of McDonald's. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information