This has been coming for a while. It might be temporary or an...

This has been coming for a while. It might be temporary or an ongoing slide, and for those who think they can forecast the future I say this: best of luck to you.

The food franchise model works on two principles - screw your staff and screw your suppliers. It's easier in America where the staff (adults) are on as little a $9 per hour, and the massive broad acre crop farming keeps ingredients prices low. ALL franchise food businesses where there is a Workplace Agreement have employees being screwed. Ask 7-Eleven staff and anyone who trades off cash for 'flexibility'.

Having been in the food business since 1981 I see threats for this business as follows:

1. Franchisee/employee/shareholder agitation
2. Ongoing customer dissatisfaction in social media especially re the pay issue (and the Pepsi thing)
3. The potential rise of Pizza Hut
4. Growth and technology ceilings
5. Changing tastes (though when you're pissed almost nothing is better than a pizza)
6. Federal government using DMP as the poster business for the pay issue.
7. Ridiculous consumer sentiment that exists where people think prices only go down.
8. It works on a ridiculous multiple for food businesses.
9. The increasing cost of ingredients, especially cheese. (check NEWS for powdered milk is you want)

Opportunities are less extensive. It's now a mature business (in food terms) so acquisition may be an option.

This is not a hiccup, this is a real problem. But all is not lost. The CEO needs to step down, but first needs to implement the three principles of crisis management - acknowledge the problem, take responsibility and over correct.

I have been waiting for this, and will be making a delivery of schadenfreude to the CEO at my earliest convenience. As ever, all this is my own opinion, and I wish all holder the best. I no longer hold, I'm happy to say.
Food is a hard game, and protecting your profits is key to longevity. The bottom line is the bottom line..