McDonald’s has a long history of being there for their customers through the good and the bad, remaining a beloved American institution for 65 years. And McDonald’s will be here with their customers through this current public health emergency, as will your team at Concannon Miller.
Rest assured that we have the technology in place to serve you from anywhere and the experience to walk this journey with you.
Some McDonald’s Owner/Operators have already been impacted, with local government authorities in some states mandating closures of restaurants aside from drive-thru, take out or delivery. And no matter their U.S. location, McDonald’s is now encouraging all Owner/Operators to close their dining rooms for indoor seating.
McDonald’s said it expects its restaurants to weather the storm well with delivery and drive-thru sales expected to increase.
McDonald’s announced several initiatives Monday to assist Owner/Operators in the short-term, including:
- For March, they will not let any restaurant be placed into an effective rent situation, where the base rent paid is higher than the percentage rent dollars for the month.
- In April and May, they will not draft base rent for any restaurants and will instead collect your full rent (including base rent) and service fees for April sales in May and for May sales in June, which provides a short-term deferral of base rent.
- To free up field resources and allow restaurants to have greater focus on serving the customers, McDonald’s is pausing all CEV and BSVs. In mid-April, they will re-evaluate when it is appropriate to resume.
- McDonald’s will be delaying development projects that were scheduled to break ground in March or April to focus all construction resources on completing the many restaurant projects that are currently underway.
- For any organizations with near-term liquidity concerns, McDonald’s, approved lenders and financial advisors stand ready to offer potential solutions on a case-by-case basis.
Business Best Practices
While the effects continue to unravel, here are some best practices to consider:
Contact your bank: Contact your bank to check into the availability for lines of credit. With interest rates at historic lows, it’s also a good time to consider refinancing or fixing your variable rate loans.
Conserve cash: Monitor your working capital, evaluate your cash inflows and outflows, assess your organizational expenses and draws, and put off any unnecessary spending.
Conduct a risk assessment: Conduct a thorough risk assessment of business operations to assess the possible interruptions and formulate measures to reduce the impact of those interruptions.
Sales Forecasting: Examine the overall threat to the organization should sales decrease at various percentage rates. Determine what actions may need to be taken at certain stages to reduce further losses.
Employee Absenteeism: Plan for voluntary/involuntary employee absenteeism and reduction in workforce, which could impact service levels. Consider alternative solutions if forced to further reduce your service model.
Capital Projects: Carefully consider the timing of expansion or construction projects.
Federal Government Action
We’re closely monitoring the federal government’s steps on an economic stimulus plan and are awaiting official guidance on the Treasury Department’s announcement yesterday stating that tax payments for individuals (up to $1 million) can be deferred until July 15th. At this time, it appears that they have NOT extended the filing deadline, so please continue to send in your tax documents. We’ll provide updates as details are finalized and released.
As always, please contact us with any questions or concerns you have. Being there for you and assisting you through these challenges is our number one priority. How much we know is important; how much we care is everything.