Burger King vs McDonald’s: The Ongoing Case Study of Restaurant Ineptitude

26 Jan

In 2010 3G Capital, a Brazilian private equity firm, purchased Burger King and started replacing its senior management with much younger personnel. These replacements came from Wall Street, were educated at some of the top academic institutions, and have no fear of working consistent 80 hour weeks. How young is young? Their CEO, Daniel Schwartz, was 32 at the time of his appointment,  his CFO 28, head of Investor relations 29, and President of North American Operations the adult at 36.

Compare this to McDonald’s leadership team: their CEO has spent 24 years exclusively with McDonald’s, and their US President 3o years.

And how is that working out for McDonald’s (MCD)?

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The restaurant industry is simple. It’s hard work, but it’s simple. McDonald’s has forgotten this and done all types of things that drive business complexity, lower profits, and keep recalcitrant senior and middle managers overpaid. In a world where restaurants are overbuilt and churn high, you need to stay relevant with customers or you can be easily dismissed.