6 ms·

I don’t understand your opening sentence. Why would they keep it unplugged?

by raldi 5y ago

bena 5y ago
The gist I'm getting is that McDonald's doesn't want to be in the ice cream/soft serve business. But it also doesn't want more competition than it already has. So every McDonald's has an ice cream machine as a more sort of "break glass in case of emergency" situation. Or in this case "in case of DQ". But if there is no DQ in the area, why operate the machine? Just have it be "broken". It's not like people have an option they didn't have before.
- jacobr1 5y ago
  I think it is less a matter of intent and more a matter of incentives. McDonald's is probably perfectly happy to be selling more ice-cream and make money that way. But they just don't care about maintenance (franchise reasonability) and it isn't impacting the bottom line significantly, so nobody really wants to fix the contracts and/or vendor performance issues. If there was a better competitor out there, McDonalds might use them, but they just don't care enough (meaning aren't incentivized enough) at the corporate level.
- cactus2093 5y ago
  > But if there is no DQ in the area, why operate the machine? Why operate the grill or fryer? To sell food and make money. Instead of selling someone a meal for $7 McDonalds can sell them a meal + a mcflurry for $10. Why wouldn't they want to do this? It doesn't make any sense that a bunch of franchise owners are all in together on some kind of ice cream conspiracy. Surely the truth is less interesting, it's most likely just a boring cost/benefit analysis. There seems to be some flaw with the machines they use that make them particularly prone to breaking down and difficult to maintain. So some stores that don't sell a lot of ice cream anyway decide it's not worth the cost of keeping them running, while other stores that sell more do keep them running. And surely it's no coincidence that the markets where people buy more ice cream are also where Dairy Queen stores are more likely to open up.
  - ipaddr 5y ago
    The core point is it's not profitable or as profitable as other items. So ice cream is offered as a loss leader in areas with a DQ and turned off in areas without on but advertised nationally.
    - wcfields 5y ago
      For the up-thread commenters, It's like people here can't fathom that a Fortune 107 corporation wouldn't implement policies that follow an ECON 101 supply/demand curve.
    - deleted 5y ago
      [deleted]
  - maerF0x0 5y ago
    > a meal for $7 McDonalds can sell them a meal + a mcflurry for $10. Why wouldn't they want to do this? you're assuming the consumer has a marginal $3 to spend and wouldnt instead spend $7 on a (burger + mcflurry) vs (Burger, fries, soft drink). I would guess that the latter has a much higher margin. So for the same $7 spend you can make more profit if your icecream machine is down. But, if DQ can do the deal for $7 then foot traffic may move to DQ, meaning McD's loses _both_ profitable options. So, the game is to dissuade the market from the preferred package (burger + icecream) towards the more profitable package (burger , fries, softdrink) . I'd also add that they probably know that the marginal cost of driving to 2 locations means they're just gonna get what they can at 1 stop. That is few people would buy the burger at mcdonald's and then drive to DQ for the mcBlizzard. Kinda feels like playing roller coaster tycoon all over again.
  - bena 5y ago
    I'm not saying it is or isn't the real cause, I'm saying that's what I feel the OP was trying to convey. That's what I read in his comment. And I agree with you, it's likely got a way more pedestrian and human answer. The machines require some amount of maintenance or repair that is simply annoying. And eventually, people prefer to not be annoyed. So maybe one day, you just let the ice cream machine be broken instead of doing the annoying thing. Even if the store sells ice cream like gangbusters. The guy slinging cones for minimum wage isn't seeing a single cent difference if he sells 1 or 1000.
- deleted 5y ago
  [deleted]
kmeisthax 5y ago
Parent post appears to be alleging that McDonalds - or their franchisees - only serve ice cream purely to starve competitors out of the fast food market, and then disconnects or damages those machines in order to get out of having to actually sell that ice cream. Personally, I don't think that holds water. Everyone involved in this drama wants ice cream in the stores. It's not like McDonalds corporate has some Jobsian disgust towards putting ice cream and a burger in the same meal or anything. The far easier explanation is that McDonalds paid Taylor for a custom machine that's extremely temperamental, not that they secretly want to ban their own product because it's ice cream.
- vorpalhex 5y ago
  The machines frequently require technicians to come out and work on them, to the tune of several hundred dollars per hour, which the franchisee must pay. They are not permitted to get a less tempermental machine or use independent technicians. It's a cost problem.
  - ansible 5y ago
    You would think that the McDonalds franchise owners would push back on McDonalds corporate about this issue. They would rightly be complaining that they are losing revenue because the Taylor ice cream machine has low reliability. Even one service call per month is a significant cost to a low-margin business like a quick-serve restaurant. It is quite possible there is some hinky corporate politics and such within McDonalds corporate that is preventing improvement here.
    - paulmd 5y ago
      McDonald's exerts extremely extremely tight control over its franchisees by corporate standards. Every single thing about a McDonald's is meticulously specified and regulated by corporate, from the equipment installations to the number of pickle slices that go on a burger and the soap that goes into the bathroom. Franchisees in general don't wear the pants in this relationship. If McD corporate says you use this machine, tough shit, you use that machine. I'm sure the feelings of franchisees are broadly speaking "taken into consideration" but it's not like there's a union here, the dynamic here is that franchisees will shut their mouths and go make some money for daddy. It's a weird arms-length model that has run into some trouble before, particularly surrounding labor law, as McD corporate has some very detailed expectations on how franchisees will hire, fire, pay, and operate their employees. Anyway basically if McDonald's says "you will take those things out of our machine" yeah, franchisees are absolutely going to hop to it. tbh if McDonald's were smart they'd just have done it without the "ackshually this thing will steal your girlfriend, poison your customers, and kill your dog" defamation, because if they'd simply said "we're terminating our business relationship with Kytch, have it removed in the next 2 weeks" franchisees absolutely would have done it anyway. Now they are fighting a lawsuit about it because they just had to get a dig in.
deleted 5y ago
[deleted]
maerF0x0 5y ago
The "whoops it's unplugged" was a joke about the root cause, but also intended to imply equivalently poor attempts to keep the machine working. That is I do not think they literally did not plug it in, but I do think they are not trying very hard to keep the machine up and running.

I don’t understand your opening sentence. Why would they keep it unplugged?

by raldi 5y ago

I don’t understand your opening sentence. Why would they keep it unplugged?

bena 5y ago

The gist I'm getting is that McDonald's doesn't want to be in the ice cream/soft serve business. But it also doesn't want more competition than it already has. So every McDonald's has an ice cream machine as a more sort of "break glass in case of emergency" situation. Or in this case "in case of DQ". But if there is no DQ in the area, why operate the machine? Just have it be "broken". It's not like people have an option they didn't have before.

jacobr1 5y ago
I think it is less a matter of intent and more a matter of incentives. McDonald's is probably perfectly happy to be selling more ice-cream and make money that way. But they just don't care about maintenance (franchise reasonability) and it isn't impacting the bottom line significantly, so nobody really wants to fix the contracts and/or vendor performance issues. If there was a better competitor out there, McDonalds might use them, but they just don't care enough (meaning aren't incentivized enough) at the corporate level.
cactus2093 5y ago
> But if there is no DQ in the area, why operate the machine? Why operate the grill or fryer? To sell food and make money. Instead of selling someone a meal for $7 McDonalds can sell them a meal + a mcflurry for $10. Why wouldn't they want to do this? It doesn't make any sense that a bunch of franchise owners are all in together on some kind of ice cream conspiracy. Surely the truth is less interesting, it's most likely just a boring cost/benefit analysis. There seems to be some flaw with the machines they use that make them particularly prone to breaking down and difficult to maintain. So some stores that don't sell a lot of ice cream anyway decide it's not worth the cost of keeping them running, while other stores that sell more do keep them running. And surely it's no coincidence that the markets where people buy more ice cream are also where Dairy Queen stores are more likely to open up.
- ipaddr 5y ago
  The core point is it's not profitable or as profitable as other items. So ice cream is offered as a loss leader in areas with a DQ and turned off in areas without on but advertised nationally.
  - wcfields 5y ago
    For the up-thread commenters, It's like people here can't fathom that a Fortune 107 corporation wouldn't implement policies that follow an ECON 101 supply/demand curve.
  - deleted 5y ago
    [deleted]
- maerF0x0 5y ago
  > a meal for $7 McDonalds can sell them a meal + a mcflurry for $10. Why wouldn't they want to do this? you're assuming the consumer has a marginal $3 to spend and wouldnt instead spend $7 on a (burger + mcflurry) vs (Burger, fries, soft drink). I would guess that the latter has a much higher margin. So for the same $7 spend you can make more profit if your icecream machine is down. But, if DQ can do the deal for $7 then foot traffic may move to DQ, meaning McD's loses _both_ profitable options. So, the game is to dissuade the market from the preferred package (burger + icecream) towards the more profitable package (burger , fries, softdrink) . I'd also add that they probably know that the marginal cost of driving to 2 locations means they're just gonna get what they can at 1 stop. That is few people would buy the burger at mcdonald's and then drive to DQ for the mcBlizzard. Kinda feels like playing roller coaster tycoon all over again.
- bena 5y ago
  I'm not saying it is or isn't the real cause, I'm saying that's what I feel the OP was trying to convey. That's what I read in his comment. And I agree with you, it's likely got a way more pedestrian and human answer. The machines require some amount of maintenance or repair that is simply annoying. And eventually, people prefer to not be annoyed. So maybe one day, you just let the ice cream machine be broken instead of doing the annoying thing. Even if the store sells ice cream like gangbusters. The guy slinging cones for minimum wage isn't seeing a single cent difference if he sells 1 or 1000.
deleted 5y ago
[deleted]

kmeisthax 5y ago

Parent post appears to be alleging that McDonalds - or their franchisees - only serve ice cream purely to starve competitors out of the fast food market, and then disconnects or damages those machines in order to get out of having to actually sell that ice cream. Personally, I don't think that holds water. Everyone involved in this drama wants ice cream in the stores. It's not like McDonalds corporate has some Jobsian disgust towards putting ice cream and a burger in the same meal or anything. The far easier explanation is that McDonalds paid Taylor for a custom machine that's extremely temperamental, not that they secretly want to ban their own product because it's ice cream.

vorpalhex 5y ago
The machines frequently require technicians to come out and work on them, to the tune of several hundred dollars per hour, which the franchisee must pay. They are not permitted to get a less tempermental machine or use independent technicians. It's a cost problem.
- ansible 5y ago
  You would think that the McDonalds franchise owners would push back on McDonalds corporate about this issue. They would rightly be complaining that they are losing revenue because the Taylor ice cream machine has low reliability. Even one service call per month is a significant cost to a low-margin business like a quick-serve restaurant. It is quite possible there is some hinky corporate politics and such within McDonalds corporate that is preventing improvement here.
  - paulmd 5y ago
    McDonald's exerts extremely extremely tight control over its franchisees by corporate standards. Every single thing about a McDonald's is meticulously specified and regulated by corporate, from the equipment installations to the number of pickle slices that go on a burger and the soap that goes into the bathroom. Franchisees in general don't wear the pants in this relationship. If McD corporate says you use this machine, tough shit, you use that machine. I'm sure the feelings of franchisees are broadly speaking "taken into consideration" but it's not like there's a union here, the dynamic here is that franchisees will shut their mouths and go make some money for daddy. It's a weird arms-length model that has run into some trouble before, particularly surrounding labor law, as McD corporate has some very detailed expectations on how franchisees will hire, fire, pay, and operate their employees. Anyway basically if McDonald's says "you will take those things out of our machine" yeah, franchisees are absolutely going to hop to it. tbh if McDonald's were smart they'd just have done it without the "ackshually this thing will steal your girlfriend, poison your customers, and kill your dog" defamation, because if they'd simply said "we're terminating our business relationship with Kytch, have it removed in the next 2 weeks" franchisees absolutely would have done it anyway. Now they are fighting a lawsuit about it because they just had to get a dig in.

deleted 5y ago

[deleted]

maerF0x0 5y ago

The "whoops it's unplugged" was a joke about the root cause, but also intended to imply equivalently poor attempts to keep the machine working. That is I do not think they literally did not plug it in, but I do think they are not trying very hard to keep the machine up and running.