3 ms·

THis "theory" doesn't make any sense. It's the Franchisee who doesn't get the sales AND pays the huge cost for an official repair rep to come out and basically

by skeeter2020 5y ago

THis "theory" doesn't make any sense. It's the Franchisee who doesn't get the sales AND pays the huge cost for an official repair rep to come out and basically restart the cleaning cycle. This doesn't jive with crushing an upstart DQ; they're only really competitors in that they both sell "fast food". Ice cream @ a McD is a loss-leader (soft serve) or minor line item (McFlurrys) while it is the core product of DQ, despite their hot food offerrings.

notreallyserio 5y ago
> Ice cream @ a McD is a loss-leader (soft serve) or minor line item (McFlurrys) while it is the core product of DQ, despite their hot food offerrings. IMO this is actually the point being made. There's no need to run a loss leader if the competition doesn't exist.
- gruez 5y ago
  1. if it's a loss leader that they don't want to continue, why not just... stop offering it? After all, you see "participating restaurant" disclaimers everywhere. Why can't a particular franchise just choose not to participate if it's not in DQ territory? 2. Regardless of whether it's a loss leader, I doubt the marginal cost of the ice cream is more than the $1 or whatever the discounted price is. They paid for the expensive ice cream machine and the counter space. They might as well use it.
  - notreallyserio 5y ago
    As the theory goes, they want to stop DQ from moving in more than they want to recover the counter space used by the offline ice cream machine.
  - hackernewds 5y ago
    because customers drive in to purchase the loss leader, and even when unavailable will purchase alternate items
hackernewds 5y ago
> lce cream a McD is a loss-leader (soft serve) or minor line item (McFlurrys) This is why the franchisee has little incentive to keep them functioning until there's a competitor next door? I don't know if it has to even do with the whole Kryst debaucle

notreallyserio 5y ago

> Ice cream @ a McD is a loss-leader (soft serve) or minor line item (McFlurrys) while it is the core product of DQ, despite their hot food offerrings. IMO this is actually the point being made. There's no need to run a loss leader if the competition doesn't exist.

gruez 5y ago
1. if it's a loss leader that they don't want to continue, why not just... stop offering it? After all, you see "participating restaurant" disclaimers everywhere. Why can't a particular franchise just choose not to participate if it's not in DQ territory? 2. Regardless of whether it's a loss leader, I doubt the marginal cost of the ice cream is more than the $1 or whatever the discounted price is. They paid for the expensive ice cream machine and the counter space. They might as well use it.
- notreallyserio 5y ago
  As the theory goes, they want to stop DQ from moving in more than they want to recover the counter space used by the offline ice cream machine.
- hackernewds 5y ago
  because customers drive in to purchase the loss leader, and even when unavailable will purchase alternate items

hackernewds 5y ago

> lce cream a McD is a loss-leader (soft serve) or minor line item (McFlurrys) This is why the franchisee has little incentive to keep them functioning until there's a competitor next door? I don't know if it has to even do with the whole Kryst debaucle