What McDonald’s can learn from Chick-fil-A and Subway

According to Bernstein analysts, Chick-fil-A and Subway may be private, but they provide important lessons to listed restaurant companies.

These two chain stores have been on different paths in recent years, and they also experienced different destinies. According to Bloomberg et al., Chick-fil-A is expanding beyond the south but Subway plans to close hundreds of US stores.

Sara Senatore of Bernstein recently reviewed unit economics and presented several points to the public restaurant company she is involved in. She concluded that McDonald 's MCD (+ 0.41%) seemed to be heading in the right direction and could potentially benefit from a subway mistake.

Chick-fil-A operates a spacious store, and the subway is very compact. You may think that the subway strategy can help companies reduce unnecessary costs, but Senators believe that lean people and small shops "have little support for cash flow There was no. "

Senatore wrote in the report to the client that on Friday the competition for sandwiches is intense, it may be the reason why Subway took "continued attention to growth". But she said that this is at the expense of the unit economy.

By contrast, Bernstein considers Chick-fil-A to be more than a third of the market, "by drastically reducing chicken category fragments."

Senatore believes that some initiatives on Subway have brought a bad movement to its franchisee members. The company makes the market supersaturated. In other words, stores collide with each other, and the proportion of patents is high. Therefore, the franchise owner said that it can not properly invest in store upgrades and "undertaking sudden value needed by customers".

The Bernstein team insists that the geographic expansion of Chick-fil-A could pose a threat to the domestic chain. Favorites from other regions can no longer be beyond their home base, but Chick-fil-A's "cultistic followers" may help to get rid of this model.

At the same time, Senatore said that major chain stores may benefit from subway mistakes, and indeed some people may have already done so. "We will not be surprised if the gap between McDonald's and the sandwich division is primarily due to the decrease in the subway," she wrote.

After her latest analysis, McDonald looks very attractive to Senatore. Because the company seems to have a long-term view. Like Chick-fil-A, the Hamburg chain goes back in the short term but follows the "joint investment strategy" which supports the company's long-term soundness.

"A franchisee who sacrificed franchise economic rights to earn income is dangerous in our view." "And even though McDonald's is at the end of the investment curve, the chain finds the best operator Huge growth of A is no coincidence, as it supports them accordingly. "

Fast food chains such as McDonald's, Burger King, Wendy are the main threat of Chick-fil-A. Many of these chains are currently introducing healthy menu options. Therefore, in certain areas Chick-fil-A may not grow. There is a difference between Chick-fil-A and these fast food chains, but there are other restaurants offering consumers a healthy diet choice such as "Veggie Grill". The current trend in the healthy eating lifestyle in the US will allow for the introduction of a fast food franchise to provide food delivery services to consumers in the shortest possible time. Chick-Fil-A offers more ways to arrange assets to improve most restaurants, designed to increase customer satisfaction and always provide a full service that produces substantial revenue I will invest.

Probably the important story of today's fast-food world is the rise of Chick fil-A and Chipotle and the collapse of McDonald. Industry analysts can build a career by explaining this phenomenon, but in reality it is not that complicated. American consumers who dislike McDonald's like Chickfil-A and Chipotle. The latest evidence will appear in the catering industry in the form of this year 's US Consumer Satisfaction Index report. Every year, ACSI officials review 70,000 people, understand their views on various consumer products, and then summarize these opinions into a comprehensive index of high scores from zero to 100 I will.

Due to this crisis, consumers across the country expressed concern and started voting in dollars. Fast food chains such as McDonald's and Chick-fil-A (now subway) trace the footprint of managing the use of antibiotics in early adopters' supply chains such as Chipotle and Panera with meaningful commitments . Companies such as Perdue, Foster Farms, Tyson are also the main drivers of last year's change and they pledge to eliminate the routine use of antibiotics from poultry production.