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Date Posted: 11:49:19 01/21/04 Wed
Author: Lotta Bucks
Subject: Re: Help needed... oh and happy new year kids
In reply to: Bull 's message, "Help needed... oh and happy new year kids" on 06:41:25 01/20/04 Tue

The initial investment is 175,000.00 United States Dollars or 95,558.17 United Kingdom Pounds.
Everyone has horror or success stories. McDonalds has been losing money in the USA and are on a campaign to turn that around.


"McDonald's Corp. said yesterday that it has agreed to sell its Donatos Pizzeria restaurants but will hold on to its Chipotle Mexican Grill and Boston Market businesses in the United States.

Industry analysts had speculated for a year that the fast-food giant would sell its stakes in several of the "partner restaurants," but the company chose to hang on to the largest and most profitable ones.

McDonald's will sell the pizza chain back to its original owner, James E. Grote, for an undisclosed sum. It has taken steps to end its domestic joint venture with Fazoli's Italian Restaurants. Its plans for outside the United States include discontinuing development of Boston Market in Canada and Australia and closing its Pret A Manger sandwich shops in Japan -- though it will keep its minority stake in that chain.

John S. Glass, an analyst with CIBC World Markets, said McDonald's is not divesting much, given that Boston Market and Chipotle make up 90 percent of the $1 billion in sales generated by all the partner brands combined.

"All they are doing is eliminating the smaller pieces of the partner brands that have been losing money," Glass said. "That should improve profits for the company next year" rather than hurt profits, as is sometimes the case in such situations. The partner brands accounted for about 6 percent of McDonald's revenue in 2003.

Since McDonald's chairman and chief executive James R. Cantalupo joined the company about a year ago, he has pledged to turn around the slide that began in the mid-1990s, when, after years of solid results, the chain began expanding aggressively even as its sales per store were slipping. Earlier this year McDonald's reported its first quarterly loss since going public in 1965.

The company's announcement yesterday is part of its effort to do "fewer things better." Cantalupo said in a statement that the partner businesses being shed are a distraction from McDonald's core hamburger-chain operations, which are just starting to recover from sluggish sales. Boston Market and Chipotle, on the other hand, "are sizeable companies that can operate autonomously" and profitably.

Boston Market is the larger of the two, with 662 restaurants compared with Chipotle's 285. But while Boston Market generates almost $1 million per store, Chipotle generates $1.2 million to $1.3 million, analysts said.

McDonald's first invested in Chipotle in 1998 and remains the chain's majority shareholder. Launched by Steven Ells in 1993 with a single restaurant in Denver, Chipotle was slow to build new restaurants until McDonald's provided the fledgling chain with purchasing, distribution and real estate expertise, as well as capital."
Dec 16th 2003
Material Provided By:
The Washington Post

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