McDonalds not lovin it: Obama Health-Care.

McDonalds not lovin it: Obama Health-Care.

by Liv | Published on September 30th, 2010, 7:50 am | News

Worse yet, they appear to be strong-arming the administration into reform:

McDonald's Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.

Last week, a senior McDonald's official informed the Department of Health and Human Services that the restaurant chain's insurer won't meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care. cite

McDonalds makes enough money to care for everyone of their employees. Stop the McDouble for a buck and give your employees a livable wage with health-care.

[BecauseHeLives]

mcdonalds_health_care.jpg

Worse yet, they appear to be strong-arming the administration into reform:

McDonald's Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.

Last week, a senior McDonald's official informed the Department of Health and Human Services that the restaurant chain's insurer won't meet a 2011 requirement to spend at least 80% to 85% of its premium revenue on medical care. cite

McDonalds makes enough money to care for everyone of their employees. Stop the McDouble for a buck and give your employees a livable wage with health-care.

How much to they make Liv? What does the average McDonalds franchisee make each year from a store?

[A Person]

McDonald's revenues for 2009 were $22,800,000,000, and revenues for this year are up between 23- 28% with a projected annual revenue of $28,000,000,000.

They have over "30,000 restaurants" around the world, which suggests an average revenue of just under $1,000,000 per restaurant

Edit:
From McDonald's site

2. How many McDonald's are there worldwide?
McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people.

this puts the projected revenue at $900,000 per outlet

[Liv]

And.... they opened up the stock market today, because they're profiting so much... ironically the same day this story runs in the WSJ. Ronald Mcdonald, ringing the capitalistic system's bell. It's too much.

[BecauseHeLives]

McDonald's revenues for 2009 were $22,800,000,000, and revenues for this year are up between 23- 28% with a projected annual revenue of $28,000,000,000.

They have over "30,000 restaurants" around the world, which suggests an average revenue of just under $1,000,000 per restaurant

Edit:
From McDonald's site

2. How many McDonald's are there worldwide?
McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people.

this puts the projected revenue at $900,000 per outlet

Most McDonalds are franchised so most of the numbers you stated above just don't apply. Most of the money corp makes is through royalties and a small portion is via their company owned stores. Franchisees would be responsible for providing healthcare to their own employees. And you would be wrong to think that most Mcdonalds have revenue of around 1 million. It is actually a bit higher than that. 2-3 million easily isn't out of the question. But keep in mind that revenue (which is gross) does not equal net income.

[BecauseHeLives]

And.... they opened up the stock market today, because they're profiting so much... ironically the same day this story runs in the WSJ. Ronald Mcdonald, ringing the capitalistic system's bell. It's too much.

Liv, you're webpage is a capitalistic endeavor as well.

[Liv]

Then they need to find a new business model or go out of business.

[Liv]

And.... they opened up the stock market today, because they're profiting so much... ironically the same day this story runs in the WSJ. Ronald Mcdonald, ringing the capitalistic system's bell. It's too much.

Liv, you're webpage is a capitalistic endeavor as well.

No it's socialistic, I'm supporting 2 lazy, good fur nothing midgets and a spouse.

[A Person]

Most McDonalds are franchised so most of the numbers you stated above just don't apply. Most of the money corp makes is through royalties and a small portion is via their company owned stores. Franchisees would be responsible for providing healthcare to their own employees. And you would be wrong to think that most McDonald's have revenue of around 1 million. It is actually a bit higher than that. 2-3 million easily isn't out of the question. But keep in mind that revenue (which is gross) does not equal net income.

Sure it's a rough measure, but surely you have a point? How about making it instead of quibbling about numbers you could find out yourself.

And let's not forget that McDonald's are not complaining about having to provide health care - they are complaining about having to provide efficient health care -

[BecauseHeLives]

Most McDonalds are franchised so most of the numbers you stated above just don't apply. Most of the money corp makes is through royalties and a small portion is via their company owned stores. Franchisees would be responsible for providing healthcare to their own employees. And you would be wrong to think that most McDonald's have revenue of around 1 million. It is actually a bit higher than that. 2-3 million easily isn't out of the question. But keep in mind that revenue (which is gross) does not equal net income.

Sure it's a rough measure, but surely you have a point? How about making it instead of quibbling about numbers you could find out yourself.

And let's not forget that McDonald's are not complaining about having to provide health care - they are complaining about having to provide efficient health care -

The point is that I believe Liv thinks that McDonalds should pony up for health coverage for all of its employees which is rediculous. You only brough unrelated garbage into the mix.

[A Person]

You only brough unrelated garbage into the mix.

You asked the crackin question, presumably you think the answer is important

If a company with revenues of $25,000,000,000 can't afford health care for its employees then there won't be many that can.

But you are still forgetting that McDonald's is complaining about being required to provide efficient health care, where the bulk of the premiums go to health care.

[BecauseHeLives]

You only brough unrelated garbage into the mix.

You asked the crackin question, presumably you think the answer is important

If a company with revenues of $25,000,000,000 can't afford health care for its employees then there won't be many that can.

But you are still forgetting that McDonald's is complaining about being required to provide efficient health care, where the bulk of the premiums go to health care.

You still don't get it AP.

[A Person]

You're right, I don't get it. Perhaps because I've lived in two countries where I do get it and where McDonald's employees, along with everyone else, just don't worry about going bankrupt if they get sick.

Anyway E.D. Kain does the analysis between the crappy McPlan and going onto a health exchange plan

I went over to the Kaiser Family Foundation to take a look at what I might qualify for under the healthcare law if I were a single McDonald’s worker (using 2014 dollars). Generously assuming I’d make $10/hour (I believe shift managers make about $9.81/hour) I calculate my yearly salary at $20,800 – or about 181% of poverty.

Turns out I’ll be on the hook for a premium of about $1127 a year, or about $21 per week. That’s $11 less a week than I’d pay for McDonald’s mini-med benefits. But instead of yearly maximum benefit of $10,000 I’d have no maximum benefit at all since maximum benefits are no longer legal. And I’d only have a maximum out-of-pocket expense of $2,083. This plan – a ‘silver’ plan under the new law – is going to be quite a lot better than McDonald’s, actually:

The maximum out-of-pocket costs the person/family will be responsible for in 2014 (not including the premium) is $2,083. Whether a person or family reaches this maximum level will depend on the amount of health care services they use. Currently, about one in four people use no health care services in any given year. The guaranteed plan for the person/family will have an actuarial value of 87%. This means that for all enrollees in a typical population, the plan will pay for 87% of expenses in total for covered benefits, with enrollees responsible for the rest. Specific provisions like deductibles and copayments may vary from plan to plan, and out-of-pocket costs for any given individual or family will depend on their health care expenses. Preventive services will be covered with no cost sharing required.

McDonald’s could also take advantage of the free choice vouchers built into the law (another fingerprint of the excellent Ron Wyden) which allow people to opt into the exchanges even if their employer provides coverage.

Either way, I’ll take my silver plan any day over the mini-med McDonald’s plans. A $10,000 maximum benefit provides no real health insurance at all, though it’s better than nothing. We really should have fought for universal catastrophic insurance starting immediately, which would have taken the teeth out of reports like this one. And if I were a McDonald’s employee, I’d be hoping against hope that I could lose the crappy mini-med plans and get onto an exchange as quickly as possible. Though hopefully not before 2014….

(P.S. As a cashier making $7.51 an hour I would be on the hook for a yearly premium of $494 or about $9.5 a week. I’d get far, far superior health coverage for about $4.50 less a week than the cheapest McDonald’s plan, which caps benefits at $2,000 – $83 less than my out of pocket maximum on the silver plan which has an actuarial value, at this income, of 94%.)

[thesumofyourfears]

You only brough unrelated garbage into the mix.

If a company with revenues of $25,000,000,000 can't afford health care for its employees then there won't be many that can.

You still don't get it AP.

He never will, BHL. However, a more accurate way to look at it is their Income Statement and it reflects a different story. Apparrently A-Fraud is drinking too much brrrrrrrley pop, he stated $25 Trillion...incorrect. Anyway, the Income statement does not break it down to each restaurant because as you said, they are franchises. He thinks the "$25T" is all money in their pocket which is clearly not.

Income Statment 2009
Here: http://finance.yahoo.com/q/is?s=MCD+Income+Statement&annual

Cash Flow Statement 2009
http://finance.yahoo.com/q/cf?s=MCD+Cash+Flow&annual

or at the corporate site for Financial Statements here:

http://www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/investor_relations0.Par.6540.File.dat/McD_2009_AR_Final_032910.pdf

From 2009 Income Statement
Company-operated sales $15,459B
Franchised revenues $ 7,286B
Total revenues $22,745B GROSS
You can see all the rest of the expenses, net income, etc above on the webpage.

It will help A-Fraud to understand what a franchise is in USA before he passes poor judgment.
http://www.investopedia.com/terms/f/franchise.asp

[A Person]

BHL has already said he's not interested in an answer to his question, it was just to pad out his post.

Apparrently A-Fraud is drinking too much brrrrrrrley pop, he stated $25 Trillion...incorrect

McDonald's revenues for 2009 were $22,800,000,000

1 million = 1,000,000
1 billion (US) = 1,000,000,000
1 trillion (US) = 1,000,000,000,000

Note that I said $22,800,000,000 i.e. $22.8 billion
NOT
$22,800,000,000,000 i.e. $22.8 trillion

... Incorrect.

[A Person]

He never will, BHL. However, a more accurate way to look at it is their Income Statement and it reflects a different story. Apparrently A-Fraud is drinking too much brrrrrrrley pop, he stated $25 Trillion...incorrect. Anyway, the Income statement does not break it down to each restaurant because as you said, they are franchises. He thinks the "$25T" is all money in their pocket which is clearly not.

Income Statment 2009
Here: http://finance.yahoo.com/q/is?s=MCD+Income+Statement&annual

Cash Flow Statement 2009
http://finance.yahoo.com/q/cf?s=MCD+Cash+Flow&annual

or at the corporate site for Financial Statements here:

http://www.aboutmcdonalds.com/etc/medialib/aboutMcDonalds/investor_relations0.Par.6540.File.dat/McD_2009_AR_Final_032910.pdf

From 2009 Income Statement
Company-operated sales $15,459B
Franchised revenues $ 7,286B
Total revenues $22,745B GROSS
You can see all the rest of the expenses, net income, etc above on the webpage.

It will help A-Fraud to understand what a franchise is in USA before he passes poor judgment.
http://www.investopedia.com/terms/f/franchise.asp

A measure of profitability is Operating Margin, which is operating income divided by the total revenue.

For 2009
McDonald's:
Total Revenues 22,744,700
Operating Income 6,841,000
Operating Margin 30%

That's pretty dam good. Margins vary by sector, let's look at a competitor

Starbucks:
Total Revenues 9,774,600
Operating Income 562,000
Operating Margin 6%

Yet Starbucks can afford to give their employees a real health care plan

Consider this. If you buy a cup of coffee at Starbucks rather than at McDonalds you’ll pay more. But you’ll also be supporting a company that provides its baristas with real benefits. Grab a 99 cent latte at McDonald’s and you’re supporting a company that makes its employees poorer and sicker and then complains about how the government is getting in the way.

[thesumofyourfears]

If a company with revenues of $25,000,000,000 can't afford health care for its employees then there won't be many that can.

Regardless of my mistake, fine, but you still said $25B when it was actually $22.75B BIG DIFFERENCE in corporate finance.

[thesumofyourfears]

That's pretty dam good. Margins vary by sector, let's look at a competitor

You are also ignoring the separately stated Revenues, corporate and franchise. As was stated before, McDonald's sells franchises and Starbucks does not sell franchises like McD's does. BIG FACTOR in determining benefit plans you cannot ignore. McD's does have health plans for corporate employees. Health plans for employees at the restaurant/franchisees is a different story because they are the O/O, therefore they have latitude as to what to offer in benefits to restaurant employees. Bottom line, the business models are quite different and I would compare them to other fast foods like Wendy's, Burger King. Starbucks is not the best comparison. What choices the franchisees have to offer employees, I don't know. Pay and benefits are dictated by market forces like anythings else. Regardless, it is only a matter of time when the private sector will drop health are plans and dump employees on Obamacare.

[A Person]

Regardless of my mistake, fine

Apology accepted.

but you still said $25B when it was actually $22.75B BIG DIFFERENCE in corporate finance.

I believe I said

McDonald's revenues for 2009 were $22,800,000,000, and revenues for this year are up between 23- 28% with a projected annual revenue of $28,000,000,000.

Net income for the quarter was 1.2bn, an increase of 23% compared to $985.3m for the previous year quarter. On a per share-basis, earnings increased 28% to $1.11 from $0.87 in the previous year. Operating income for the quarter was $1.9bn, and increase of 22% compared to 1.5bn for the corresponding period prior year.

I think the $28 B was too optimistic, so I used $25 which represents a 10% growth year over year.

Anyway, I'm sure this quibbling about numbers is important to your point, - whatever that might be.

My point is that you don't want the government to pay for health care and you're suggesting that a company with a 30% operating margin and $22.8 billion in revenues can't afford to provide health care for its workers - so who's left? Or should the working poor just die, and decrease the surplus population?

Companies in countries with universal health care (which is all civilized countries) enjoy a big competitive advantage over the US. In all of them (except Japan) corporate taxes are lower and health care is run far more efficiently at much lower costs - and with better outcomes. Dang Socialism.

[thesumofyourfears]

Anyway, I'm sure this quibbling about numbers is important to your point, - whatever that might be.

You WILL quibble about $2-3B difference at the corporate level, get my point? BIG DIFFERENCE on the bottom line, wouldn't your say?

30% operating margin and $22.8 billion in revenues can't afford to provide health care for its workers - so who's left?

You can't stop at the op margin and use the 30% to justify your argument...look further down the Income Statement and then the Cash Flow Statement:

The $ amount of 4,551,000
http://finance.yahoo.com/q/is?s=MCD+Inc ... ent&annual
then find the $ amount 4,551,000 at
http://finance.yahoo.com/q/cf?s=MCD+Cash+Flow&annual

[A Person]

You WILL quibble about $2-3B difference at the corporate level, get my point? BIG DIFFERENCE on the bottom line, wouldn't your say?

Is 10% a big difference? It's certainly a difference - does it make any difference to any point you might care to make?

Are you disputing that McDonald's looks to have more profitable year than last year? If so what would you consider a reasonable estimate for 2010 revenues?

You can't stop at the op margin and use the 30% to justify your argument

Why not? It's a common metric used by investors to measure a company's operating performance.

...look further down the Income Statement and then the Cash Flow Statement ... The $ amount of 4,551,000

But if you insist let's look at net income. So 2009 net income was $4.5 billion. That's $237,800,000 (6%) more than 2008 which was $1,918,100,000 (80%) more than 2007, not bad profit growth given the economy. How did they improve profits? Not by increased sales, their sales are up over 2008 - but down slightly from 2007. Their profit increases have been achieved by reducing payroll - working staff harder, more part time employees, fewer benefits.

By any metric McDonald's is a wealthy company with a healthy balance sheet, excellent operating margin and good profit growth. But a (expletive) company to work for - or eat at. But hey there are lots of unemployed who should jump at a chance for minimum wage job with pitiful benefits just so you can buy an unhealthy meal at minimal cost.

What's your point? Do you actually have one?

[thesumofyourfears]

Are you disputing that McDonald's looks to have more profitable year than last year? If so what would you consider a reasonable estimate for 2010 revenues?

No

Why not? It's a common metric used by investors to measure a company's operating performance.

But you are not looking at other expenses between op and net income.

Their profit increases have been achieved by reducing payroll - working staff harder, more part time employees, fewer benefits.

That can very well be true...not just for McDs, btw, but for many others as well in a recession.

By any metric McDonald's is a wealthy company with a healthy balance sheet, excellent operating margin and good profit growth. But a (expletive) company to work for - or eat at. But hey there are lots of unemployed who should jump at a chance for minimum wage job with pitiful benefits just so you can buy an unhealthy meal at minimal cost. What's your point? Do you actually have one?

Not disputing corporate financial performance, but hey, you don't have to work there, now do ya? You are totally deflecting and ignoring their business model. In all probability, the franchisee or O/O determines pay and benefits and are funded by the franchisee, not by corporate funds. But hey, ask them for more details. A more accurate view on this subject is to look at the financial statements of a typical franchisee or O/O. You will have to ask an/O or contact McDs to find out the details.

[A Person]

Not disputing corporate financial performance, but hey, you don't have to work there, now do ya?

"A very self centered attitude. But that is to be expected of an angry right wingnut..."

But you are correct - I don't buy there either.

You are totally deflecting and ignoring their business model

No, it is their business model that I am drawing attention to - since they are trying to influence government to provide an exemption for their business model - pleading that they cannot afford to provide an efficient health care plan when the reality is, that even after allowing for toilet paper in the staff washrooms and paperclips in the head office, they are rolling in money.

[BecauseHeLives]

...since they are trying to influence government to provide an exemption for their business model - pleading that they cannot afford to provide an efficient health care plan when the reality is, that even after allowing for toilet paper in the staff washrooms and paperclips in the head office, they are rolling in money.

Seriously, AP, they have the right to petition the government with their concerns. It is the American way and right to do so. Yes, AP. Even companies have rights in the USA. Stop complaining and quit yer whining.

[A Person]

Have I suggested they have no rights? By all means create a straw man and burn it to the ground. American corporations are so much like Christians in America, so persecuted

They're entitled to make their claim, I am entitled to show it to be exploitative and miserly. Next those pesky employees will want Christmas day off. Health care? Bah Humbug!

Maybe you can tell me, since summy avoided the question by quibbling over a standard performance metric. You've stated you do not want government to pay for healthcare, and now you're saying that employers shouldn't either. If a highly profitable multi billion dollar company can't afford it - who can?

What should the working poor and unemployed do? Die and decrease the surplus population? Give their money to the church and pray themselves better?