Everyone is familiar with McDonald's. The Golden Arches, the Big Mac, the Happy Meals.
But what don't we know about the famous chain? A company as big as McDonald's has a ton of
weird stories they try to keep quiet. This is the untold truth of McDonald's.
While customers Stateside might not have heard about it, McDonald's Japan had some major
issues in 2014 and 2015 — issues so big and so gross that they led to a 10 percent
sales decline, according to Mother Jones.
It started in July of 2014, when McDonald's stepped in to take some serious action against
one of their chicken suppliers. Rumor had it that the factory was mixing expired products
with the fresh stuff, then shipping it to McDonald's, Starbucks, and Burger King locations
in Japan and China. Then in early 2015, there were several reports of customers finding
pieces of plastic and vinyl in their Chicken McNuggets, leading to a recall of one million
bite-sized chicken chunks. The company's supplier, Cargill, investigated, and came to the conclusion
that the contamination didn't happen in their factory. So where did it come from? We may
never know, but it was there.
Let's say you're opening a restaurant in New York, and you want to call one of your burgers
the Big Mac. How well do you think that would work out? Now, if you were to open it in Spain,
you'd be fine! That's because McDonald's actually lost the trademark to the Big Mac in the European
Union.
The Guardian reports that in the 1960s, Irish businessman Pat McDonagh was given the nickname
"Supermac" during a soccer match in Ireland's County Westmeath. Later, McDonagh went on
to start a massively successful burger chain called Supermac's. When he tried to open locations
outside of Ireland, McDonald's claimed "Supermac" was too close to "Big Mac" and would lead
to brand confusion. Regardless, the EU Intellectual Property Office ruled in favor of Supermac's.
Not only could the Irish chain expand to other countries in the EU, but the ruling also voided
the "Big Mac" trademark. And that's huge, especially considering the number of lawsuits
McDonald's had previously won. This case set a precedent for future trademark cases.
McDonald's isn't just about food; if you have fond memories of opening your Happy Meal to
see what toy you got, you're not alone. Happy Meals made their debut in 1979 and have been
popular ever since. So popular, in fact, that The Motley Fool says they accounted for about
20 percent of sales in 2004, which incidentally made McDonald's the world's largest toy distributor
at the time.
"Some fun, some food. It's all inside this Happy Meal!"
Happy Meals are changing with the times, too. In 2014, The Atlantic reported that because
McDonald's UK ran a promotion offering codes for e-books instead of toys, it made them
— temporarily, at least — the largest book distributor in the UK.
McDonald's is huge, and it's everywhere. But surprisingly enough, it's not historically
the largest fast food chain in the world — not by a long shot.
It's hard to give exact numbers because so many locations are opening and closing all
the time, but according to CNBC, McDonald's was only the second largest chain in the world
in 2017, as far as physical locations go. While it had 37,241 restaurants, it was handily
beaten by Subway and its 43,912 locations. Starbucks was a surprisingly distant third,
trailing with 27,339 stores. When it comes to sales growth, however, Starbucks and McDonald's
were miles ahead.
According to Business Insider, Subway was also at the top of the pile in the U.S., with
around 25,800 domestic locations in 2018, though that number was falling. Starbucks
had recently passed McDonald's, with 14,300 domestic stores in comparison to McDonald's
roughly 14,000 U.S. restaurants. In 2020, QSR reported McDonald's was still in third
place, trailing Subway and Starbucks once again.
McDonald's makes and sells food, so that must be how it makes its money, right? Not quite.
According to Quartz, a large percentage of profit comes not from Big Macs and fries,
but from real estate. Part of their franchising strategy involves buying the land the restaurant
will occupy, then leasing that plot to the franchisee — and about 85 percent of McDonald's
locations are run by franchisees. More than that, they often lease the properties at massive
markups, so even though the average McDonald's makes around $2.7 million annually, the average
take-home pay for a franchise owner is just $154,000 a year. Around 22 percent of gross
profits goes to rent, and the numbers are staggering.
As of 2016, McDonald's held about $30 billion worth of real estate, and that netted them
an annual profit of $4.5 billion. Talk about a brilliant business plan.
If you've ever thought running a McDonald's might be for you, here are some pretty shocking
numbers that might make you think twice. Business Insider reported that McDonald's requires
new franchisees to have $750,000 in liquid assets available before they're even considered.
Startup costs can range anywhere from $958,000 to $2.2 million, and they include everything
from construction to kitchen equipment and signage. Franchisees are responsible for paying
40 percent of that with non-borrowed cash, though the rest can be borrowed.
Then, franchisees pay a $45,000 franchise fee, as well as rent and 4 percent of gross
sales every month. They're also responsible for any necessary upgrades to keep in line
with other McDonald's locations, and some of those fees are pretty shocking. A Create
Your Taste kiosk will set you back $125,000, a McCafe espresso machine is a whopping $13,000,
and upgrades to the interior can run up a bill as high as $600,000. And if they decide
the whole restaurant needs a remodel, you're looking at as much as $2 million.
There are a ton of McDonald's restaurants worldwide, but surprisingly, there are a number
of cities and countries that don't have a single location. In 2016, The Telegraph reported
on a lawsuit McDonald's filed against the city of Florence after it refused to let the
Golden Arches set up shop at the Piazza del Duomo.
What other areas can't get their McDonald's fix? When the U.S. military closed its base
in Bermuda in 1995, McDonald's closed, too — and they haven't reopened since because
of the Prohibited Restaurants Act 1977. Iran kicked them out in 1979, and in their place
is a chain called Mash Donald's. Macedonia and McDonald's had a falling out, and McDonald's
chose to cut and run out of Bolivia after a sort of nationwide disdain for the chain
resulted in poor sales.
Barbados — which traditionally doesn't eat much beef — was another failed experiment,
with their McDonald's lasting just one year. There are plenty of rumors as to why McDonald's
has never opened in Montenegro, and, of course, there are none in North Korea.
But most fascinating of all is Iceland, which said goodbye to McDonald's in 2009. According
to Culture Trip, love for an Icelandic burger chain called Hamborgarabulla was so strong
that the people boycotted McDonald's. Visitors can still stop and see the last McDonald's
burger ever served, as it's sitting at the Reykjavik Bus Hostel looking much the same
as it did years ago.
If everyone did just one thing to help the environment, it would make a huge difference.
In 2018, one-time-use plastics — particularly drinking straws — made headlines as people
started to realize just how bad they are for the environment. According to Ocean Collectiv,
they're one of the items most commonly found during beach cleanups, and the problem with
getting rid of them is that alternatives are much more expensive.
But McDonald's still vowed to ditch straws, starting with restaurants in the UK and Ireland.
According to The Independent, all 1,361 locations promised to have their plastic straws replaced
by paper ones at a much greater cost to the company. Both government officials and customers
lauded the decision — but not for long. By 2019, it was revealed that the new paper
straws offered at UK locations were no more recyclable than their plastic counterparts.
"New paper straws in McDonald's restaurants, which the company describes as eco-friendly,
actually cannot be recycled."
To their credit, though, McDonald's is still trying. On their website they promise to source
100 percent of their packaging from renewable, recycled, or certified sources by 2025. By
that date, they also plan to offer recycling options in all of their locations.
McDonald's was one of the parties involved in England's longest-running legal case in
history, and it's just as much of a saga as you'd expect.
In 1986, London Greenpeace released a pamphlet called "What's wrong with McDonald's — everything
they don't want you to know." There were all kinds of accusations in it, from the mistreatment
of animals to encouraging litter. In 1990, McDonald's filed a libel suit against five
people. Three apologized, but Helen Steel, a part-time bar worker, and David Morris,
an unemployed postal worker, headed to court.
The pair got next to no help, and when they appealed to the European Court of Human Rights
for legal aid against the millions McDonald's was throwing at them, they were essentially
told they were doing well enough on their own. BBC says it wasn't until 1994 that the
full trial was in motion, spawning around 60,000 pages of documents.
It wasn't over until June 19, 1997, when the judge issued his 762-page verdict finding
McDonalds not guilty. He thus ordered Steel and Morris to pay 60,000 pounds in damages.
The pair refused, McDonald's expressed no interest in collecting, and the case went
down in history.
Not everyone loves McDonald's, especially animal rights activists. The chain's official
stance is:
"We believe treating animals with care and respect is an integral part of our commitment
to serving McDonald's customers safe food."
Regardless, animal rights groups say the company is not following through on its commitment.
In 2018, Animal Equality partnered with other organizations to demonstrate at McDonald's
locations and to broadcast iAnimal, a VR experience that took people, quote, "inside" factory
farms to see the suffering of the chickens that ultimately made it onto McDonald's menus.
They called out McDonald's not just for its policies, but for neglecting to be the leader
in animal welfare they thought it should be.
According to the Independent, one of the core issues was unnatural breeding practices, which
resulted in chickens that got too big too quickly and ended up suffering all kinds of
health issues. All this came on the heels of McDonald's announcing that they were going
to be raising the standard of care for their chickens by 2024.
Ever wonder if you could enter the drive-thru and satisfy your craving for a McFlurry while
riding a horse?
There's a surprising number of people who have not only tried, but made headlines for
it. In March 2018, the BBC reported that a man in Suffolk, England trotted up to a drive-thru
and attempted to order a McCafe latte before being told the drive-thru actually wasn't
for horses. Just a few months later it happened again, in Worcestershire. The customer wanted
a Big Mac, and the horse? They weren't served by McDonald's, but they did get a snack from
a nearby Caffe Nero.
A man in South Carolina had better luck when The AJC caught him on camera going through
a drive-thru for some sweet tea and apple pies. A McDonald's in New Zealand wasn't having
any of it, however, and turned away two women on horseback. According to Wide Open Pets,
the chain cited health and safety reasons for turning riders away.
For decades, Ronald McDonald has been the face of McDonald's. But in recent years ... not
so much, and it turns out that people have been calling for his head for a long time.
According to The Street, there was a major push in 2011 to retire him. Why? Because he
was being used to market unhealthy fast food items to kids. CBR says that at the time he
was sort of already on his way out: McDonald's was shifting its marketing more toward adults,
and had already gotten rid of most of the other McDonaldland characters. Still, Ronald
was increasingly lumped in with mascots like Joe Camel, who represented a company now condemned
for trying to make cigarettes appeal to the youth demographic.
And nowhere was that more visible than an ill-fated attempt to give Ronald his own Twitter
account. Forbes says that when the chain decided to have its mascot tweet #RonaldMcDonald in
2014, it went about as well as expected. There was more hate than love, and his fate was
finally sealed in 2016. He was officially retired when the world started seeing people
dressed as creepy, threatening clowns everywhere.
Today, he only makes the occasional appearance, like at the Macy's Thanksgiving Day Parade
and, of course, at the Ronald McDonald House Charities.
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