MONEY freebies

Free Coffee at Chick-fil-A for Entire Month of February

Chick-fil-A restaurant, Naples, Florida.
Chick-fil-A restaurant, Naples, Florida. Jeff G—Alamy

Restaurants are pouring free coffee for the whole month, no purchase required.

The new year kicked off with dueling free coffee promotions from McDonald’s and Dunkin’ Donuts in some parts of the country, and now another fast food player is entering the coffee wars with an even bigger, broader, no-strings-attached giveaway.

On Friday, Chick-fil-A announced that throughout February, restaurants nationwide will pour customers free cups of hot or iced THRIVE Farmers Coffee—all day long, no purchase required.

Chick-fil-A launched a partnership with THRIVE, a Georgia-based company that networks with family-owned coffee producers in Central America and reportedly allows them to earn up to 10 times the norm, in August 2014. Now the push is on to win over customers by giving the coffee away, with only a very little amount of fine print to worry about:

This offer includes 12 ounce hot or 16 ounce iced sizes and is available while supplies last. The offer is available anytime during regular restaurant hours and is limited to one cup of coffee per customer, per visit. No additional purchase is necessary and no substitutions are available.

The coffee giveaway especially makes sense in light of how important breakfast has become to fast food restaurants. Breakfast is the only meal of the day that has experienced consistent growth in sales in recent years, which explains why more competitors are entering or expanding into the space—notably Taco Bell. Another factor explaining the fresh coffee push: Consumers are more prone to grabbing a cup of Joe at Dunkin’ Donuts, Starbucks, McDonald’s, or at convenience stores such as Cumberland Farms and 7-Eleven, not just for breakfast but at any hour of the day. Chick-fil-A clearly wants to be thought of as a great spot for a quick anytime coffee as well.

In all cases, the hope is that when folks swing by for coffee, they’ll also pick up a scone, donut, hot dog, Egg McMuffin, Slim Jim, chicken biscuit, or some other specialty of the house.

MONEY Fast Food

5 Problems That’ll Challenge McDonald’s No Matter Who’s CEO

A McDonald's restaurant in Encinitas, California.
Mike Blake—Reuters

The McDonald's McFamily will have a new head honcho in early 2015, and he has his work cut out for him.

Amid slumping sales and years of losing customers to Chipotle and other fast casual contenders, McDonald’s CEO Donald Thompson announced this week that he would be retiring in March. “It’s tough to say goodbye to the McFamily, but there is a time and season for everything,” Thompson said in a press release.

His replacement, current chief brand officer Steve Easterbrook, will take over a McFamily with many problems to address—problems that, given McDonald’s muddled sense of mission of late and overarching changes in demographics and the marketplace, have seemed difficult if not impossible to solve. Among the issues that need attention:

Millennials
Generally speaking, millennials love food and dining out, and yet their preferences—customizable options, transparency, and fare that’s healthier, more sustainable, and altogether superior compared to any cheap cookie-cutter fast food joint—are the exact opposite of what McDonald’s is known for. McDonald’s has made some moves clearly aimed at winning over millennials, including ventures into personalized, make-your-own burgers and potentially adding brunch menu items (brunch is a Gen Y obsession). McDonald’s has also dramatically expanded the menu over the years with the hopes of drawing in more young customers. Yet many of these initiatives have proven to be costly, and they’ve failed to make McDonald’s a top choice among millennials—who tend to favor Starbucks, Chipotle, and other more upscale fast casual contenders over McDonald’s or any old-fashioned fast food establishment.

No Hot New Product
Around this time last year, business reporters were proclaiming that McDonald’s desperately needed to add a “miracle” product to the menu like Wendy’s did with its Pretzel Bacon Cheeseburger. That once-limited-time-only burger proved such a hit that Wendy’s added it to the permanent menu last summer. Other recent monumental successes in the fast food world include Taco Bell’s Doritos Locos line of tacos.

Of course, McDonald’s has regularly rolled out plenty of new menu items with the hope of them breaking out as phenomenal best-sellers. But new contenders like fish nuggets and habanero Quarter Pounders have come up way short of being runaway successes, and another recent menu addition, overpriced chicken wings, was a huge flop. The Wall Street Journal has reported that McDonald’s most recent “bona fide blockbuster” new product, which stayed on the menu and impacted sales in a significant way, was the McGriddle pancake breakfast sandwich, introduced back in 2003.

Pricing
McDonald’s decades-long value pitch is that it’s a quick and inexpensive place to eat, and that reputation has hurt the fast food giant lately in two ways: 1) It’s difficult to raise prices and offer “premium” items like the doomed Angus burger because the customer base, accustomed to cheaper prices, won’t pay up; and 2) because McDonald’s food is fast and cheap, the assumption is that the quality must be low. As one fast food franchise consultant told the Associated Press, “It’s the whole perception people get when you sell something cheaply.”

McDonald’s needs its coffee giveaways and low-price value menu to pull in diners even though these items result in little to no profits. Yet to increase profits and better compete with the likes of Starbucks, Panera Bread, and Chipotle, McDonald’s is constantly trying to entice customers into spending more on “gourmet” and “premium” options like espressos and McWraps. As a result, service has slowed, lowering the value proposition at the same time, and McDonald’s pricing doesn’t make sense to many customers. When there are a bunch of burgers for under $2 in the Dollar Menu & More section, it’s puzzling why anyone would pay $5 or so for what seems like a very similar burger on the regular menu.

Focus
This problem is closely related to how McDonald’s pricing is all over the map. That, along with the fact that the McDonald’s menu has expanded to the point of being unwieldy and slowing down operations, has left franchisee owners angry and deeply concerned that the company has lost its sense of focus. McDonald’s recently announced intentions to scale back the menu and put some items on the chopping block. But such a measure could create its own problems. After all, some of the items likely to be downsized or cut, including espressos and McWraps, were added to menus to woo millennials and consumers who otherwise probably wouldn’t dine at McDonald’s.

Haters
During the Golden Globes, McDonald’s aired a “Signs” commercial campaign showing how different restaurant locations posted messages in support of local causes, the troops, and 9/11. Loads of people took to social media to say how much they hated the ad. Last year, McDonald’s introduced a new Happy Meal mascot and Ronald McDonald got a makeover. Both efforts were declared “terrifying,” while the former was also categorized as “nightmarish” and the latter was described as the face of the “saddest place on Earth.”

Heck, even when McDonald’s launches a broad “transparency” campaign answering questions about where its food comes from and how it is processed, the company is bashed for admitting to unhealthy practices and because of skepticism about other things still being hid.

The point is: People love to hate McDonald’s. In a story I wrote about the reaction on social media to the new Happy Meal mascot, Steve Connelly, of the Boston ad agency Connelly Partners, put things in perspective by explaining there are legions of opinionated consumers out there who consider McDonald’s “a piñata” rather than simply just another brand or place to eat. Many people will “keep bashing the hell out of them every chance you get because they stand for evil and are making the nation fat. Sometimes I think if McDonald’s came up with a cure for cancer they would get bashed for it.”

Surely, McDonald’s hates how much hate it attracts. And it’s up to the new leadership to figure out how to change perceptions that have built up over generations in the U.S. and abroad. They have to find a way to convince the haters to stop hating.

MONEY Fast Food

McDonald’s CEO Steps Down Amid Sales Woes

Donald Thompson, a 25-year McDonald's veteran, hasn't been able to turn around the chain's sagging sales.

MONEY Food & Drink

Vegan Meatballs on IKEA Menus Soon

Meatball dish of a Ikea food store inside their furniture store.
Maxim Shipenkov—EPA

The vegan twist on the Swedish meatball will be sold in IKEA stores starting in April. It'll join new vegan and vegetarian options from Chipotle and White Castle, among others.

Behold the power of the veggie and animal lover lobby! The movement can claim two big victories this week. First, a planned GoDaddy Super Bowl ad was pulled after the “humorous” commercial—about a puppy that’s lost, then sold online—was widely criticized for being offensive.

“As someone who feels incredibly strong about animal rights, I am extremely offended by this commercial,” reads a Change.org petition that pleaded with GoDaddy to drop the commercial and attracted 40,000 online signatures in one day. “Go Daddy is encouraging private breeding/puppy mills while shelter animals wait patiently for their forever homes or worse—to be euthanized. They are also encouraging purchasing an animal online; the animal could be sold to someone who runs a fighting ring, someone who abuses animals, or to someone who cannot adequately care for the animal.”

Then, on Wednesday, PETA (hat tip: Grubstreet) patted itself on the back for what was apparently the successful pressuring of IKEA into adding vegan meatballs to the menu. Last spring, it was reported that IKEA was developing vegetarian meatballs, but now it looks like the meatballs will be fully vegan—using no animal products whatsoever. They’re expected to be available at IKEA stores this April.

Meanwhile, large quick-serve restaurant chains have also been expanding vegetarian and vegan options. White Castle rolled out veggie sliders a few weeks ago, while Chipotle pumped up sales of its new sofritas vegan burrito with a special giveaway promotion on Monday. The deal, which promised a free burrito in the future with the purchase of a sofritas burrito on Monday, sold out in some Chipotle locations.

MONEY Advertising

5 Ways This Year’s Super Bowl Ads Will Be Like No Other

Victoria's Secret Angels Superbowl ad
Victoria’s Secret Angels Super Bowl Commercial Michael Seto

This year, a Super Bowl ad costs roughly $4.5 million for 30 seconds of air time, up $500,000 from 2014. Price isn't the only way this year's ads will be different.

In a few ways, come Sunday, February 1, Super Bowl viewers can expect some of the same-old, same-old during breaks in the game. Unsurprisingly, there will be ads selling beer and tearjerkers featuring lost puppies (one does both at the same time), and there will be at least one commercial flashing a nearly naked woman walking in public, thanks to perennial provocateur Carl’s Jr. Still, in a few interesting ways this year’s Super Bowl commercials make a break from the past.

There won’t be many car ads.
Auto brands are usually big players in the Super Bowl ad games. Not so much this year. As the Detroit News pointed out, 11 automakers aired commercials during the 2014 Super Bowl. This year, only a handful will be paying up for Super Bowl ad time, with Ford, Lincoln, Hyundai, Honda, Acura, General Motors, and Volkswagen among the regular Super Bowl advertisers who aren’t bothering this year.

The latter is known for some of the best and most shared Super Bowl ads ever (everybody remembers the kid Darth Vader from 2011), yet the automaker released a statement explaining, “For 2015, we have opted to not participate due to other priorities and initiatives across all platforms. We hope to rejoin the Super Bowl when we feel it is appropriate for our brand.”

Analysts have also theorized that automakers are skipping Super Bowl ads this year because the timing doesn’t match up with new vehicle launches, and simply because they’ve blown so much money on these commercials in the past. Over the last decade, automakers have dropped $514.6 million on Super Bowl commercials, nearly 25% of the grand total.

Some other big advertisers are passing too.
Like Dannon, which isn’t advertising even though it’s the Official Yogurt Sponsor of the NFL, and even though it’s developed a reputation for memorable Super Bowl ads like last year’s “Full House” reunion spot. Even for brands that seek close ties with the NFL, the thinking can be that advertising in the Super Bowl simply costs too much, and might not provide enough bang for the buck over the long haul.

“The Super Bowl has a huge audience—but with a huge price tag,” Dannon senior director of public relations Michael Neuwirth said in an interview. “We looked at the most efficient way to build awareness and interest in the product across a longer period of time.”

There will be a bunch of brands you never heard of.
Chances are you’ve never heard of Wix.com (a website building company), Loctite (super glue), or Mophie (smartphone cases), and if you are familiar with the likes of Buzzfeed and The Verge, you probably don’t think of them as Super Bowl advertisers. Nonetheless, all of the above have commercials airing during the Super Bowl, the latter two with regional rather than national ads, but impressive and expensive nonetheless.

When a commercial featuring a fairly obscure brand is shown during the most expensive, most watched TV event of the year, it’s going to cause some puzzlement on the behalf of viewers. And that’s why this strategy might be effective and help a brand make an extra big splash.

In a Wall Street Journal article about the roughly 15 companies advertising for the first time in the Super Bowl this year, Chris Lawrence, director of account management at Fallon, the agency that created the Loctite Super Bowl ad, said, “The fact that there is scrutiny and people paying attention is exactly the point … It’s a chance to make a lot of friends very quickly.”

On the other hand, it’s also a chance to alienate and anger millions of viewers. See the ill-conceived effort by first-time Super Bowl advertiser Groupon in 2011, when the coupon site thought it would be funny to mock environmental and political tragedies around the globe.

The ads won’t only be limited to TV screens.
Five years ago, Pepsi skipped the Super Bowl even though ad time started then at $2.5 million—cheap compared with the $4+ million a 30-second slot runs this year. And the reason Pepsi gave in 2010 for not advertising was a decision to focus instead on a social media campaign.

Was the campaign successful? Well, let’s just say that Pepsi is not only advertising in the 2015 Super Bowl, it’s the official sponsor of the halftime show featuring Katy Perry and Lenny Kravitz.

Nonetheless, big brands commit so much time and energy to social media during the game that it’s tantamount to its own parallel category of Super Bowl advertising. Remember Oreo’s memorable Tweet during the 2013 Super Bowl at the New Orleans Super Dome, when the masses were reminded, “You can still dunk in the dark”? That extremely timely and effective message kicked up social media efforts to the next level.

This year, the off-TV battle for eyeballs includes a special live-streamed halftime show on YouTube, in addition to YouTube hosting Ad Blitz, where people can view and vote for their favorite ads that actually did air during the Super Bowl. (Last year’s Ad Blitz resulted in 379 million views on YouTube, according to Businessweek.)

Then there’s Facebook, which is “trying to get Super Bowl money even without the Super Bowl,” Horizon Media vice president Brad Adgate said to AdAge, by selling ads to companies that would be shown to Facebook users who post game-related material. “I think it’s part of their strategy to siphon off as many dollars from television as possible.”

Oh, and the network broadcasting the game on TV, NBC, is also allowing everyone to stream the entire Super Bowl online for free, which will perhaps keep some web surfers away from YouTube and Facebook.

Women will (mostly) keep their clothes on.
Super Bowl commercials have a long history of offending women and being declared downright sexist. And yes, the planned Carl’s Jr. ad featuring a seemingly naked Charlotte McKinney is perhaps one of the raciest and most juvenile Super Bowl ads ever.

But the Carl’s Jr. “all natural” commercial, which will only air in the western U.S. during the Super Bowl, is already getting bashed in certain circles. “It’s like porn meets American Pastime,” branding consultant Erika Napoletano said to USA Today. “It makes NFL cheerleaders—underpaid and underclothed—look like nuns in comparison.”

What’s more, in light of nearly half of Super Bowl viewers being women, it seems to be growing more apparent that advertisers should try to appeal to (rather than offend) the ladies. That’s part of why we’ll see ads featuring Mindy Kaling and paralympian Amy Purdy during the game. Heck, even in the Victoria’s Secret Super Bowl commercial encouraging men to buy lingerie for Valentine’s Day, the models are fully clothed (in football uniforms) rather than showing off skin in bikinis or underwear. Have a look here:

TIME Fast Food

McDonald’s CEO Pleads for Time to Turn Things Around

A sign stands outside of a McDonald's restaurant in San Francisco.
A sign stands outside of a McDonald's restaurant in San Francisco. Justin Sullivan—Getty Images

Many changes are to come for the fast food giant

The only good thing about 2014 for McDonald’s is that it’s finally over.

As Fortune detailed in November, this has been a terrible, horrible, no good, very bad year for the iconic fast food giant. Today the company capped it off by reporting fourth-quarter and full-year results that made 2014 the first year since 2002 in which it reported a decline in global same-store sales.

The year was historically bad for McDonald’s U.S. business in particular. Nation’s Restaurant News reported last week that the company’s slump in the U.S. market would be the first time its numbers waned compared to the year before in at least 30 years, ending the longest run ever of domestic restaurant sales growth for a single chain.

On the earnings call today CEO Don Thompson cited a litany of actions the company is taking to turn things around, including localizing its menu, allowing patrons to customize their burgers, and launching fresh marketing. He stressed that McDonald’s is “acting with a sense of urgency”—but he also made the case for giving management more time for a turnaround to kick in. He noted that McDonald’s is only six months into the 12- to 18-month plan he outlined in July.

“History tells us that these efforts will take time to resonate,” Thompson said on the call, “[and therefore] expect continued volatility in the market through most of 2015.” As he put it, “2015 will be a year of regaining momentum globally…. It will take time, especially in larger markets to notice the comprehensive changes that are under way.” He warned that the company would continue to feel pressure on sales and earnings in the first half of the year, with negative same store sales already expected for January.

Thompson certainly inherited some of the company’s issues, such as menu bloat, which had been a long time in the making when he became CEO in July 2012. Thompson had to report a slowdown in sales growth in most major markets his very first quarter on the job, but he’s now had two and a half years to change the company’s trajectory and the arrows keep pointing the wrong direction.

One promising sign, perhaps, came from a subtle shift in what McDonald’s said about food quality—a sensitive issue for the company. McDonald’s management has always maintained that its food is excellent, arguing that it was a simply a perception problem; the company, it said, just needed to do a better job educating consumers about its ingredients and how they’re prepared. But this time Mike Andres, president of the U.S. business, acknowledged on the call that “we have to make sure our quality aligns with consumers’ definition of quality moving forward. And so we’re going to be very agressive in that area.” He said that he’s building culinary talent and bringing in outside consultants to help with “menu vision.”

It was an important acknowledgement. But the company’s challenge remains daunting. It needs to simultaneously pare its menu, improve its offerings, increase its speed, and hone its message—a combination of factors that will be hard to pull off, particularly in a world where many customers are craving healthier offerings.

This article originally appeared on Fortune.com.

MONEY

Triumph of Starbucks & Fast Casual Over McDonald’s & Fast Food

Starbucks
Philip Toscano—PA Wire/Press Association Images

In the battle for consumer food and beverage dollars, upscale is winning out over cheap. Starbucks' sales, store traffic, and stock price are all booming, while McDonald's continues to flounder.

The quarterly results released at the end of the week from Starbucks and McDonald’s paint quite a picture of how America’s quick-serve consumption habits are changing. Namely, that we’re growing increasingly more likely to indulge in pricier on-the-go food and drink that’s deemed upscale, healthier, or otherwise superior in quality than we are on the stuff that’s tempting mainly just because it’s cheap.

Starbucks posted outstanding results that immediately juiced the company stock price, with store traffic up 2% (double the growth rate of the previous quarter) and same-store sales rising 5%, plus $1.6 billion added to Starbucks Cards (up 17% compared to the previous year) and a very impressive increase of 9 million sales over the same period a year prior. McDonald’s results, on the other hand, were disappointing, with same-store sales in the U.S. dipping 1.7% and quarterly profits dropping 21%.

Neither McDonald’s recent struggles nor the success of fast casual players such as Starbucks, Panera Bread, and Chipotle should come as a surprise. The core fast-casual pitch—food and drink that’s higher quality and yet only marginally more expensive than fast food—is one that consumers have been buying into for years. On the other hand, the attempts by traditional fast food giants to follow the fast-casual playbook and push quality and prices up and up haven’t gone over so well with consumers. And the costs of expanding menus and adding personalization options so that McDonald’s and its ilk can better compete with Chipotle or Starbucks have hurt profits, confused customers, and angered franchise owners.

What’s especially interesting is that all signs indicate that a broad swath of consumers have been plenty game to spend more on everyday eating ventures—and that they’ve grown increasingly likely to do so during a long stretch when the middle class has supposedly been gutted and incomes have largely been flat.

Using as a launchpoint the impending IPO of Shake Shack, Danny Meyer’s no-hormone, no-antibiotic $7 burger chain, business columnist James Surowiecki offers the long view of the fast-casual/fast food showdown in the latest issue of The New Yorker.

“For most of the fast-food industry’s history, taste was a secondary consideration,” Surowiecki writes. But in the ’80s and ’90s, the economy boomed, and the typical American employee was overworked—leaving him with disposable income and little time or interest to cook. Enjoying the finer things day-in, day-out came to be seen as the just rewards of one’s labors. The foodie movement hit the mainstream, with skyrocketing sales for products once deemed by the masses as snobby, elitist, and perhaps pretentious, including wine, craft beer, and, of course, organic foods sold by the likes of Whole Foods.

And yes, upscale coffee too. “In 1990, the idea of spending two dollars for a cup of coffee seemed absurd to most Americans,” Surowiecki explains. “Starbucks changed people’s idea of what coffee tasted like and how much enjoyment could be got from it.”

This once niche idea—that it’s a no-brainer to spend more money on superior food—is largely assumed to be the way to go by the kids born in the ’90s, the millennials, a generation that arguably loves food and restaurants more than any previous group. To a large extent, the shift to fast-casual has arisen hand in hand with the coming of age of millennials. As the Wall Street Journal pointed out last summer, the percentage of teens and 20-somethings who hit McDonald’s at least once a month has been falling for years, while the number of millennials who regularly visit Chipotle or another fast-casual restaurant steadily rises.

So no wonder McDonald’s has been having such a rough go of things lately, and no wonder company morale is down in the dumps.

MONEY Fast Food

McDonald’s Restaurant Owners Want to Banish These Menu Items

A customer carries McCafe cups and a bag of food
A customer carries McCafe cups and a bag of food inside a McDonald's restaurant in Oak Brook, Illinois. Tim Boyle—Bloomberg via Getty Images

If McDonald's franchisees have their way, some coffees, wraps, and Happy Meal options will disappear from menus.

By some account, 2014 is shaping up as McDonald’s worst year in three decades. Sales in the U.S. have grown an average of 5.6% annually over the last 30 years, according to industry publication Nation’s Restaurant News, yet it looks like domestic sales will have actually declined in 2014, marking the first time this has happened over that span.

In recent years, McDonald’s has been relentless in efforts to attract new customers—younger ones especially—and they’ve been adding menu items and customization options left and right in pursuit of that goal. It’s hard to determine the degree to which these efforts have been successful. What is clear, however, is that the menu has expanded to the point that it’s slowed down operations and arguably hurt profits. McDonald’s acknowledged as much last month when the fast food giant announced it would be removing some items from the menu in 2015.

The fact that the menu has become unwieldy is not news to McDonald’s restaurant owners and managers. They’ve been complaining for years that, among other issues, there are too many seasonal items and too many dollar menu options for restaurants to keep business humming along. These are supposed to be “fast” food operations, remember, and drive-thru wait times have consistently gotten slower in recent years.

But what parts of the McDonald’s menu should be done away with? Janney Capital Markets restaurant analyst Mark Kalinowski recently polled a few dozen McDonald’s franchisees about the menu items they’d most like to see disappear, and the owners—whose comments were published anonymously at Burger Business and MarketWatch—weren’t shy about voicing their opinions about the menu, as well as how the company has been doing as a whole.

“Operator morale is at the lowest I’ve seen in over 20 years,” one owner said. “Sales decreases are the new norm. Nothing exciting on the horizon. It looks like we’ll be down all year,” reads another comment. Still another chimed in:

“From an operator’s perspective, the financial future looks grim. Operations are overly complex. … A silly marketing campaign. Customers who are leaving us because even they can’t figure out what we are trying to be anymore.”

And another, specifically regarding the topic of scaling back the menu:

“Significant menu simplification is not happening as far as I can tell. Any operator could have, and many did, say that this needed to happen two years ago.”

As for specific menu items that they’d like to see targeted for termination or at least downsized, these stand out:

Happy Meal Options
Fast food kids’ meals have been bashed as unhealthy for years, and sales have fallen both because of the health factor and because ordering off the dollar menu is often a better value. To address these concerns, McDonald’s has drastically expanded Happy Meal options to include more fruits and vegetables and toy choices. At the same time, all the variations have created huge headaches for restaurants, because customers are confused and take an extra long time to place orders, and because it’s more difficult for employees to get the orders right. “Downsize Happy Meal choices,” one franchise owner said, flatly. “Happy Meals are a chore to ring up with all the options,” said another. “Perhaps corporate should make a decision on what a Happy Meal is and stop with complicating the choices.”

Espressos
During the Great Recession, McDonald’s saw a big opening into the coffee market, what with the potential for consumers to scale back on pricey Starbucks while still getting their “gourmet” caffeine fix. Hence the rise of McDonald’s McCafe line, and the larger quick-serve coffee wars, which now include McDonald’s periodically giving away coffee to draw in customers. Somewhere along the line, some franchisees have come to think of McCafe items—and espresso in particular—as too time-consuming to make and not profitable enough to keep on the menu. “Eliminate espresso drinks but keep the rest of McCafé,” one owner said.

McWraps
As the Wall Street Journal pointed out a few months ago, the Premium McWrap is a “showstopper” for restaurants because it comes with two choices of chicken, three options for sauces, and can’t be prepared in advance. So it’s no surprise owners would love to see this item removed from menus, or at least have the variations winnowed down significantly. “Downsize Premium McWraps down to one or two,” one owner suggested. “They take so long to make we already hope nobody orders them.”

Read next: Here’s How McDonald’s Makes Its French Fries

Listen to the most important stories of the day.

TIME Labor

Why This New McDonald’s Lawsuit Could Be Big Trouble for Fast Food

McDonald's
A sign for a McDonald's restaurant is seen in Times Square on June 9, 2014 in New York City. Andrew Burton—Getty Images

A new civil rights suit is holding McDonald's responsible for a franchise owner's actions

Former McDonalds workers filed a lawsuit Thursday that could put more responsibility on national restaurant chains for franchise owners’ actions.

The suit, filed in Virginia, alleges that a McDonald’s franchisee was acting in a racially motivated way when he fired several employees. But the workers are taking their grievances a step further by also suing McDonald’s national corporation, arguing the larger company is liable for the franchisee’s alleged actions.

The suit also comes just one month after the National Labor Relations Board took the unprecedented step of holding McDonald’s Corporation responsible as a “joint employer” for labor violations the agency says occurred at McDonald’s franchise locations. McDonalds is fighting the distinction.

Historically, national restaurant chains have been insulated from legal culpability for activities at franchised restaurants because the franchises are seen as independent businesses. This structure has been particularly useful in the last two years as fast food workers nationwide have gone on multiple one-day strikes demanding a $15 per hour living wage in coordinated, union-backed campaigns. By invoking its franchisees’ independence, McDonald’s doesn’t have to bargain with workers collectively or issue a wage increase that would affect all workers at once.

But Thursday’s lawsuit argues that McDonald’s franchises are “predominately controlled” by their corporate parent, as McDonald’s sets national policies for restaurant operations, corporate representatives oversee franchises and the national company coordinates training for all managerial employees. An operational manual issued to franchise owners specifically outlines a “zero tolerance” policy for discrimination, as well as a mandate against workplace remarks that demean individuals because of their race, sex or religion, according to the suit.

The ten workers involved in Thursday’s suit, all either black or Hispanic, claim their managers consistently addressed them in derogatory ways, calling them “ghetto,” “ratchet,” or “dirty Mexican.” Several female employees also say they were victims of sexual harassment that included being touched inappropriately and being sent unwanted explicit photos. The workers ultimately argue they were terminated from their jobs because the store owner wanted to increase the ratio of white employees to minority ones — supervisors said they needed “to get the ghetto out of the store,” according to the lawsuit.

The McDonald’s restaurants involved in the lawsuit are run by Soweva Corporation, a company owned by franchisee Michael Simon. However, Paul Smith, the plaintiffs’ legal counsel, says McDonald’s Corporation “could have put policies in place to stop what the plaintiffs endured.”

“We believe that McDonald’s Corporation controlled nearly every aspect of the store’s operations,” Smith said on a press call with reporters Thursday.

Soweva Corporation did not return a call seeking comment. In an emailed statement, a McDonald’s spokeswoman said the company had not seen the lawsuit, but planned to review it carefully.

“McDonald’s has a long-standing history of embracing the diversity of employees, independent Franchisees, customers and suppliers, and discrimination is completely inconsistent with our values,” the statement read. “McDonald’s and our independent owner-operators share a commitment to the well-being and fair treatment of all people who work in McDonald’s restaurants.”

Dave Sherwyn, a law professor at Cornell University’s School of Hotel Administration, says more cases are likely to emerge that try to hold corporate chains responsible for the actions of franchisees. This is the tip of the iceberg,” Sherwyn says. “The next step is going to be in discrimination litigation and wage and hour litigation.”

 

TIME Food & Drink

Here Are the 2 Places Left Where You Can Find That Taste of the ’90s, McDonald’s Pizza

Two locations in Ohio and West Virginia serve the item you thought was extinct

Millennial diners, want to sink your teeth into a round cheezy slab of ’90s nostalgia? McDonald’s Pizza has been found living on at two locations in Ohio and West Virginia, according to Canada.com

The two restaurants, out of over 14,000 McDonald’s locations in America, are owned by a man named Greg Mills and located 90 miles apart from one another, the site reports.

It was the explosion in popularity of drive-through restaurants that brought about the demise of the pizza. The ovens were said to have slowed down sales and restaurants weren’t pushing enough pizzas out to justify the expense.

But Judy Norman, an employee at the West Virginia location, told Canada.com that their pizza still sells and she has “days when everyone wants pizza and there are days where every so often you get a pizza [order].”

For now, millennials can delight that they now have two places they can take their Teenie Beanie Babies, discuss Hey Arnold! and have a slice of the past.

[Canada.com]

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