Spots N Dots
The Daily News Of TV Sales
October23, 2017

McDONALD’S FRANCHISEES BEING FORCED OUT?

“WE AREN’T DOING ANY OF IT PROPERLY”

Local McDonald’s franchisees used to be about the happiest clients a salesperson could call on—owners of successful local businesses having one of the most desired franchises, viewed as community leaders, and usually making strong returns on their investments.

But that picture appears to be changing, according to a quarterly survey done by Instinet that questioned 27 domestic franchise holders who averaged ownership of about 9 stores each. While most of them are expecting decent business gains in the short term (the franchisees see an average of a 3.8% same-store sales growth for the current quarter), the long term outlook for some of them is bleak.

Under its Vision 2020 initiative, McDonald’s is demanding remodeling at a cost that appear to be forcing older and smaller operators to sell their restaurants. “Many good owner/operators are being forced out due to the cost of Vision 2020,” one franchisee told Instinet. “There’s a rush to get out; more and more stores are up for sale. Sad to see McDonald’s becoming something entirely different than founder Ray Kroc’s vision.” Besides remodeling new madates include adding kiosks, and adding more gourmet options such as espresso-based McCafedrinks.

The company is also pushing for curbside service, delivery, and starting next year, serving burgers made to order with fresh beef. “We’re doing so much, so fast and we aren’t doing any of it properly,” one franchisee said. “Combine that with our staffing problems and we might be close to breaking McDonald’s.”

Reactions from owners to the recently introduced Starbucks-like McCafe drinks were generally negative with comments such as “Very time consuming, and competitors have a higher-quality product,” “Forced equipment purchases, awful sales,” and “Very labor intensive.” More than a quarter of the franchisees reporting said sales of the new drinks have been below expectations.

Even with the operators saying business is currently good (the recently introduced Buttermilk Crispy Tenders appear to be a current success story and the chain’s value offerings are also selling well), they appear to be very skeptical about what’s in store for owners in the future. Nation’s Restaurant News says many owners have expressed concern about all the money they’ve spent to get to the current sales results, and the question appears to be if the gains are sustainable. One pessimistic franchisee said “The results we are seeing in sales are short term…We’ll see long-term sales declines because of the wasteful investments we are making.”

ADVERTISER NEWS

Like many other major Consumer Package Goods makers, Procter & Gamble has been struggling to keep sales and profits going in the right direction. In its first fiscal quarter of the year, P&G managed a 5% profit increase, but sales were seen as a disappointment with just a 1.1% gain on organic (eliminating currency fluctuations, acquisitions and divestures) revenue. The company expects sales to grow 2-3% for the rest of the fiscal year that ends next June……Target is speeding up plans to remodel stores and now expects to have more than 1000 of its 1800 current stores redone by the end of 2020. In total, the company is opening 32 new stores this year and plans to open 35 next year, but most of the new locations are smaller-format stores that go into urban areas and college towns. The new stores run about 50,000 square feet compared to an average Target of about 145,000 square feet……It appears Verizon’s return to offering unlimited data plans helped turn around subscriber counts—after losing customers earlier this year, the largest wireless carrier added 603,000 monthly postpaid connections in the third quarter, almost double what analysts had expected. Verizon now has 115.3 million total subs, up from 113.7 million at this point last year. It lost 18,000 FiOS television subscribers during the quarter (that’s escalating—it was down 13,000 in the first quarter and 15,000 in the second quarter), but still counts 4.6 million FiOS video subs……In the tough restaurant business, it may not be enough to just show sales gains. Del Taco had a strong quarter with a 4.1% same-store sales increase (the 16th straight quarter of gains), but it’s lowering profit guidance based on higher costs. “Cost pressures during the third quarter, driven particularly by food inflation, led us to revise our annual guidance,” the CEO commented... About 68% of the 24 million smart speakers expected to be sold this year will use Amazon’s Alexa virtual assistant, while speakers using Google’s Assistant will account for just over 20% of sales, according to a Strategy Analytics report on the smart speaker market....……As a privately-owned business, The Fresh Market is not required to make public its sales results, but Supermarket News reports a Moody’s analyst sees problems ahead for the chain. The ratings service has lowered the company’s credit rating saying “Fresh Market’s operating performance for the last 12 months has been far below our expectations, and we do not expect credit metrics to improve…in the next 12 months”. A large concentration of its 176 stores are in the Southeast, where more competition is expected……Ferrero International, currently the fourth largest confectioner in the world, will grow its U.S. business buying Ferrara Candy Co., maker of Lemonheads and RedHots. Ferrero is also seen as one of the potential buyers of Nestle’s U.S. business—as we reported last week Hershey is also said to be interested in taking over the Nestle operations.

NETWORK NEWS

Gina Rodriguez (Jane the Virgin) has signed on to executive produce a female-driven drama in development at The CW, according to an exclusive report in Variety. The potential series is titled Femme and follows four millennial women from different walks of life who become unlikely friends and allies after meeting in a secret feminist social media group. Emily Gipson will join Rodriguez as executive producer alongside Audrey Wauchopeand Rachel Specter. Wauchope and Specter are writers and producers on My Crazy Ex-Girlfriend on the same network. Both also worked on Cougar Town and One Tree Hill…….ABC and dick clark productions announced that music superstar Diana Ross will be honored at the 2017 American Music Awards. The legendary singer will be awarded the American Music Award for Lifetime Achievement in recognition for her remarkable career and outstanding artistic contributions to the entertainment industry and popular culture. It was also revealed that Ross will take the stage during the telecast for a rare performance. The 2017 American Music Awards is the world’s largest fan-voted awards show - it airs live on ABC from the Microsoft Theater in Los Angeles on Sunday, November 19th at 8 PM (ET)……A single-camera comedy from Lucas Brown Eyes, the writer for Young and Hungry, has picked up a script commitment plus penalty from Fox. The project is called Reservations and follows a Native American family that moves from their impoverished reservation to Los Angeles, a move inspired by a 14-year-old boy’s dream of living in Hollywood.…. NCIS: New Orleans executive producer and showrunner Chris Silber, CBS Television Studios and Jerry Bruckheimer Television have a new drama in development at CBS. Whistleblower centers on a former whistleblower that lost everything, including his career, family, and reputation, when he stood up against a conglomerate to expose wrongdoing. He now runs a firm dedicated to exposing wrongdoers while protecting those who have the courage to stand up for what’s right.

THIS AND THAT

Viacom and Charter coming to a carriage agreement was pretty big news last week, says Wells Fargo analyst Marci Ryvicker, but you wouldn’t know it by either’s stock reaction after the news. Viacom finally closed up 0.64% while Charter was down 0.26%. Now, Barclay’s is lowering its price target for Viacom from $37 to $32. Analyst Kannan Venkateshwar says the company’s equity is still trading “significantly below levels prior to news of the dispute”.... We found this interesting in the streaming data released last week by Netflix. 8.4 million subscribers watched at least one season of one Netflix original series within 24 hours of its release. Also, the most popular binge-worthy show was its 2016 Gilmore Girls revival. Netflix plans to release 80 new, original movies in the coming 12 months. Hulu has added nine Fox affiliates to its virtual pay-tv service, and now has deals with 290 local stations. Hulu has more than two stations locked in for 80% of U.S. TV households.

ECONOMIC NEWS

The Conference Board’s Leading Economic Indicators, designed to offer a glimpse into the upcoming economy, was down for the first time in twelve months in September, but the report’s author says the index was impacted by the hurricanes. The index slipped 0.2% to 128.6 after increases of 0.4% in August and 0.3% in July. “The U.S. LEI declined slightly in September for the first time in the last twelve months, partly a result of the temporary impact of the recent hurricanes,” the Director of Business Cycles at the Conference Board said. “The source of weakness was concentrated in labor markets and residential construction, while the majority of the LEI components continued to contribute positively.”

BUSINESS BYTES

- The National Automobile Dealers Association issued its “Midyear Data Report” last week using data through the end of June (a bit odd since it has already updated the numbers for July and August). Generally, it is reporting dealers have sold roughly the same amount of new vehicles, but are making less money on each sale. “There is a lot of sales pressure in terms of margins and rising incentives,” Chief Economist Steven Szakalysaid and he predicted dealers can expect continued profit erosion in the months ahead. Profits on used vehicles—normally producing better margins than new vehicles—will also be more narrow as “residual decline is accelerating and depreciation is accelerating.” The NADA’s full year sales prediction stays at 17.1 million vehicles, “a decently good year,” but Szakaly adds to offset pressure on profits for each vehicle sold, “It’s going to be all about running a strong service business and meeting the sales incentives that are so harmful to this industry.”

- A new study from the NPD Group finds that people who will do most of their holiday shopping online are likely to spend more money that people who plan only to shop in physical stores. Online shoppers expect to spend an average of $793 each while those who will stick entirely to bricks-and-mortar alternatives will average just $467. NPD also reports purchase frequency is growing online— although there are still more purchases made in physical stores, last fourth quarter e-commerce purchase frequency rose 12% to an average of more than six online purchases while people who bought in physical stores averaged 18 purchases, which was down 4% from 2015. U.S. consumers expect to do nearly 40% of their 2017 holiday shopping online, up from one-third just two years ago.

- The four largest American banks, Bank of America, JPMorgan Chase, Citigroup and Wells Fargo made more than $4 billion in pretax income from their credit card businesses in the third quarter according to the New York Times. Outstanding credit card debt has hit a record $1 trillion and TransUnion reports 171 million Americans now have at least one credit card. The Times notes banks make money two ways from their credit cards, first taking a small cut of each transaction (a ‘swipe fee’) and more importantly, charging interest on the balances card users don’t pay at the end of each month.

AVAILS

WPBF 25, Hearst Television’s ABC affiliate in beautiful West Palm Beach, FL, seeks a National Sales Manager to join our winning team. Our ideal candidate will have a proven record of growing revenue share, while over-achieving TV, digital and multi-platform budgets. Prior experience handling Political business is a plus. Our NSM will be responsible for setting the vision and leading our excellent team of National sellers to continued success. Applicants must possess strong leadership, negotiation, interpersonal, organizational and computer skills. CLICK HEREto apply. EOE.

WSLS 10, the Graham Media Group-owned - NBC station in Roanoke/ Lynchburg, VA seeks a seasoned marketing professional to serve as its Research Director. The successful candidate will create an information flow so WSLS can achieve revenue budgets and increase market share for its broadcast and digital stations. This person will work with all departments and play a key role in utilizing research to grow and develop ideas for sales, news and promotions. More details HERE. To apply, email resume to: Bill Norris: . No calls please. EOE.

WXTX FOX, American Spirit Media with an SSA (Shared Service Agreement) with WTVM ABC Columbus Raycom Media, has an immediate opening for a General Manager/General Sales Manager in one of the best cities in the south, Columbus, GA. The successful candidate should have a proven track record in delivering both local and national revenue budgets as well as solid leadership and staff development experience. Please send your resume, references and salary requirements to: . EOE-M/F/D/V

KHON2, the FOX and CW affiliate in Honolulu, is looking for a General Sales Manager. We are seeking a “game changer” and proven leader who can communicate a vision, while developing a management and sales team to generate extraordinary growth. The GSM should be proficient in inventory analysis, control and pricing; revenue forecasting, and budgeting; account strategy; product training; and energetic, candid and focused team development. CLICK HEREfor more info or to apply. KHON2 is a Nexstar Media Group station and an EOE.

KELO-TV, Sioux Falls, SD is searching for a Local Sales Manager to lead a strong local sales team at the #1 station in the market. The LSM must train, coach, motivate and supervise while creating a positive culture focused on maintaining and building strong client relationships that translate to positive revenue growth across multiple platforms. We’re searching for an experienced leader who has a track record of building strong teams and growing market share. Qualified? CLICK HEREto apply. EOE/M/F/V/D Background check required.

Small privately-held broadcast company seeks a progressive and hands-on News Director who is not afraid of change and is willing to roll up his/her sleeves to get the job done. Our right candidate will be an experienced news manager who likes to be actively involved in all facets of the news operation. News Director experience preferred however experienced executive producers or assistant news directors looking to move into the Director role should apply. Send resume, cover letter and salary requirements in confidence to . EOE.

Nexstar’s RocketCityNow (WZDX-My8-MeTV-EscapeTV) in Huntsville, AL seeks an Account Executive. The Television AE is not afraid of change, hard work, and the opportunity to help their client’s business grow. The AE develops new accounts, is great at building customer relationships, and wants to be the best by increasing sales volume, aggressively seeks new customers for both Television and eMedia business. Minimum one year’s experience in sales, preferably in the media field, is required. CLICK HEREfor more info or to apply now. EOE.

WTAE-TV, the Hearst-owned ABC affiliate in Pittsburgh, PA is looking for a Local Sales Manager. The ideal candidate will have strong leadership and team building skills to compliment deep knowledge in all aspects of television and digital media sales. Five or more years in television and digital media, including previous management experience preferred. CLICK HEREfor more information or to apply now. EOE.

Fact: Prior to the creation of hummus and ranch dressing, nobody ate uncooked vegtagles.–Jim Gaffigan

Whole Foods just notified me that I’ve won a “Lifetime Supply of Fresh Kale” which in my case is one kale.–FunnyTweeter.com

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SPOTS N DOTS
The Daily News Of TV Sales
October23, 2017
Phone: 888-884-2630