An independent advocacy group of McDonald’s franchisees is expressing their thoughts on the company’s upcoming value meal promotion, praising the affordability it will bring to consumers but also highlighting the need for contributions from the company to make the offering sustainable for operators in the long term. The board of the National Owners Association emphasized the importance of McDonald’s resources and financial investment in ensuring that affordable options are viable for owner/operators, as the business model operates on slim profit margins of 10-15%. They argue that a 30% discount on the value meal would not be sustainable without financial support from McDonald’s.
The $5 value meal, which is set to debut on June 25 for approximately a month, includes a selection of popular menu items like McChicken or McDouble sandwiches, chicken nuggets, fries, and a drink at a significantly reduced price compared to purchasing each item individually. This move comes as lower-income consumers are cutting back on spending due to inflation, prompting brands like McDonald’s to offer greater value to attract customers. Coca-Cola, a key partner of McDonald’s, has reportedly contributed additional marketing funds to the promotion to make it more appealing to both customers and franchisees.
While McDonald’s declined to comment on the NOA letter, the company stated that providing meaningful value to customers through national advertising has always been important to them. They noted that U.S. franchisee cash flows have increased by nearly 50% on average since 2018, with 2023 being highlighted as one of the best years for franchisee cash flow in the company’s history, even when accounting for inflation. In addition to the $5 promotion, the NOA letter recommended innovative menu offerings like bringing back snack wraps using existing chicken breasts and incorporating popular beverages from McDonald’s spinoff chain, CosMc’s, into flagship locations to excite customers and employees.
The advocacy group initially proposed these ideas earlier in the year, emphasizing the importance of adding affordable options to the menu without discounting core and iconic items. They pointed to McDonald’s CEO Chris Kempczinski’s public remarks about the growing need for affordability among U.S. consumers, highlighting that value has always been a core principle of the brand. The NOA urged the company to continue innovating on the menu by introducing cost-effective options that benefit both customers and franchise owners, ultimately driving growth and success for McDonald’s and its network of operators.
Overall, the National Owners Association’s letter underscores the delicate balance between offering affordable options to consumers while ensuring profitability for franchisees. By calling for financial contributions from McDonald’s to support discounted promotions like the $5 value meal, the group aims to align the interests of both parties and sustain long-term success. As the industry grapples with economic challenges and changing consumer preferences, the partnership between McDonald’s and its franchisees remains crucial in driving innovation, value, and growth in the competitive fast-food market.
