After the impressive run McDonald's
McDonald's said it plans to sell about 21% of its company-owned restaurants to current franchisees. As it stands, only about 7,000 of the company's 31,000 stores are company-owned. And if you recall, this isn't exactly a new strategy; earlier this year, McDonald's turned over its restaurants in Latin America and the Caribbean to franchisees.
Selling another chunk of restaurants to franchisees will help it redirect funds to expansion in hot markets like India, China, and Russia. And of course, franchises tend to be lucrative, because franchisees pay royalties to the parent company. Companies like Rocky Mountain Chocolate Factory
It's interesting to recall that Pershing Capital, which persuaded Wendy's
On the other hand, a recent article from Reuters highlighted an interesting angle to the franchising focus, illustrating that while McDonald's wants to heighten its coffee profile by getting into espresso drinks, many franchisees are balking at the expenditures for the new equipment. A franchisee revolt over lattes at McDonald's might bring Starbucks
McDonald's management has done a great job of operating its business here lately and has been delivering value to shareholders through dividends and share buybacks, not to mention the stock's appreciation. I'd say McDonald's shareholders are served well by the idea. Why mess with success?