Podcast
Hamburger Business Review
Hosted by Zach Rose, Mike Merrill, Chris Higgins · EN
Analysis and discussion about the business of burgers. Also original reporting and investigation!
www.hamburgerbusinessreview.com
www.hamburgerbusinessreview.com
11episodes
Episodes
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Employee of the Month
Jul 2400:19:20Tap to summarizeTo Whom It May Concern: Season 2 of Hamburger Business Review kicked off with an episode about Mike finding employment at a quick service restaurant similar to the one’s we discuss on our show. We’ve talked about the work. We’ve interviewed his partner about the work’s effect on their relationship. We’ve learned about his crew, the difficulties of opening the folded child size fry boxes during rush hour, and the tangle of syrup tubes and ethernet cables that keep business flowing.But how long would Mike last? In this, the last episode of the season, we find out.A snack-sized podcast episode like this one demands some snack-sized news to go with it. McDonald’s is bringing back the Snack Wrap. It’s a chicken tender wrapped in a tortilla with lettuce, cheese, and either ranch or spicy sauce. The Reddit community seems unimpressed. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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The Revolution Would Not Be Franchised
Jul 201:09:32Tap to summarizeWelcome Hamburger Scholars!We’re thrilled to be in the company of Dr. Marcia Chatelain for this episode. Dr. Chatelain is the author of Franchise: The Golden Arches in Black America, an engrossing history of fast food franchising’s path through the civil rights movement and Richard Nixon’s big idea for what should come next. (Hint: it was not favorable credit terms for independent Black-owned businesses.)We start off our discussion with a retelling of the boycotts and eventual dynamiting of a Portland, Oregon McDonald’s on Union Avenue in the summer of 1970. We learn where to go when the corporation you’re researching doesn’t want you in their archive, what it is like to win a Pulitzer Prize for history, and why McDonald’s CEO Chris Kempczinski has a bigger opportunity than he seems to realize. Come for the multifaceted American story of not-so-small business and not-so-free markets. Stay for her approach to McDonald’s-neutral parenting, why it helps to look like a soccer mom, and a brilliant prequel idea for Coming to America.Speaking of McDonald’s and Black business, media mogul Byron Allen has settled his 11-figure lawsuit against McD’s last month. Mr. Allen is the owner Allen Media Group, a conglomerate in control of the Weather Channel, nine different TV court shows, and 40 TV stations across 16 states.Allen’s lawsuit alleged that McDonald’s classified his networks as specifically for Black audiences, thereby excluding them from the main tranche of McDonald’s ad spend. McDonald’s and Allen settled for undisclosed terms. The restaurant chain says it will buy advertising time from his networks at market rates.Here’s an 18-year-old Byron Allen doing stand-up on the Tonight Show with Johnny Carson in 1979:What’s behind the smash burger phenomenon? Mike and his friend Xavier don’t find out, but do dig into double and triple cheeseburgers from For the Win. The verdict? It’s like a Big Mac.Chicken McNugget inventor…Ray Dalio?!We like to think that all you need for a good fast food invention is a concept and a recipe. But what about the packaging, the machinery, the supply chain? What about the financial engineering to guarantee your product a stable price over the surges and dips of its underlying commodity?A few months ago Ray Dalio went on a Bloomberg podcast and re-told the story of doing this work on chicken so that McDonald’s could unveil the McNugget. Cleverly breaking down the cost of a chicken into it’s component parts (mostly soy and corn), Dalio was able to get close enough to a futures market on chicken that suppliers could get their feed, McDonald’s could get their chicken, and we could get our McNuggets.MCD cooling off from $300Here at HBR we keep our eyes on the MCD share price at all times. After hovering below $300/share, it finally got there for a few weeks only to be pulled back by tariff chaos and expanded war in the Middle East.This fall will mark two years since the October 7 terrorist attacks on southern Israel and the subsequent leveling of Gaza, obliteration of hospitals and infrastructure, and starvation resulting from a tightened Israeli blockade. As we have covered on the show, these developments invigorate anti-American sentiment and drive down spending at iconically American chain restaurants in the region.McWieden + KennedyYou know that Portland, Oregon-based ad agency that did groundbreaking work for Nike in the 1980s? Would it surprise you to learn that they’ve been doing the bulk of McDonald’s strategy work for coming up on six years now? This insightful Reddit thread parses out what they’ve done in that time, particularly the way that McDonald’s promotions now are less and less about the food and more and more about media tie-ins and celebrities.Come to think of it, didn’t Grimace just have a birthday? It’s been two years since the Grimace birthday meal and milkshake and we’ve yet to see any of that stuff return. Here is to hoping he is still with us. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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Tone Down the Clown
Jan 13, 202501:32:33Tap to summarizeToday’s episode is a talk with Cabel Sasser, the co-founder of the software company and video game publisher Panic, and full disclosure, also Mike’s former boss. But we’re not here to talk about software or video games. We’re here because Cabel discovered Wes Cook, a McDonald’s artist (and so much more).The Blind Push of Vision 2020McDonald’s transformed out of the Mascot Era of using Ronald McDonald, Grimace, Mayor McCheese, and their other characters with the Vision 2020 plan (a plan leading up to 2020 which was started around 2017).Part of this plan was the EOTF, or Experience of the Future, which included the ordering kiosks as part of a major redesign for stores. To incentivize the franchisee owners McDonald’s offered to cover 55% of the costs of the remodel if an owner was able to complete the renovation by a specific date. This was free money no operator wanted to turn down. And this is where the new generic feel of a modern McDonald’s came from. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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The 10-K Keeps the Score
Jan 4, 202500:41:00Tap to summarizeWe’re excited to have Marcus Estes back on the podcast to talk about finance because of his ability to make this stuff compelling! This week we’re skipping the case study in order to talk about the 10-K. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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Burgers from the Machine
Dec 27, 202400:56:33Tap to summarizeWelcome Hamburger Enthusiasts!Our guest today is writer, reporter, and author Brian Merchant. He writes the Blood In the Machine newsletter about AI, Silicon Valley, labor and power. He joined us for a discussion based on the very recent case study McDonald’s: Moving Toward a Fully Automated Future? and to teach us some lessons from the luddites.The case study, and much of our conversation, is really asking if we as a society have a problem with a certain level of automation. And the fully automated burger is still a capitalist fantasy. It’s more cost effective to hire low wage workers than install and maintain expensive robotics. The case study’s example of an “automated” McDonald’s was actually not automated at all.As our discussion moved into science fiction Chris asked the philosophical question, “If we could make a fully automated machine that sold burgers, should we?” To which Brian replied that it’s not up to us and our ethics. As soon as it’s profitable for a company to do it, they will. The problem for automation is that the United States has kept labor costs very low. The minimum wage in that Texas location is $7.25 an hour.If you enjoy Hamburger Business Review you can support us by subscribing, buying merch, or even just buying us a burger. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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Every McDonald's in Manhattan
Dec 21, 202401:00:25Tap to summarizeHello HBR Friends,Today at Hamburger Business Review we are focused on Zach’s annual great challenge to eat at every McDonald’s on the island of Manhattan in less than 24 hours while traveling only on foot. Also, he has to make a purchase at every store.This year there was a single overriding focus to the challenge:By eliminating the four hour break in the middle and doing McTrot without stopping Zach was pushing himself to go as fast as possible. Of course, he also needs a route, and even before the route he needs to get a list of all the stores in Manhattan, which is harder than it seems because you can’t trust services like Yelp, Mapquest, or even Google to have the right data about which are still open and what hours.After getting all the data Zach then has to decide how to attack the problem. We’ve talked about this before but with some 48 locations this is an almost incomprehensibly difficult problem, that combines all the math of the traveling salesman problem with the added logistics of only some locations being open 24 hours, and not to mention the issues of traffic, weather, and anything else the city of New York might throw at you.Zach’s solution was to map all the locations on paper and then starting at the northern tip of the island work his way south zig zagging as efficiently as possible. He was joined by his friend Alex for a part of the journey and we can see based on his Strava map a little slice of what this looks like:We spend the first half of this episode diving into this endeavor including some clips that Zach sent us from the streets of New York as he was taking on this challenge and encountering challenges like foot and leg pain, shakes, cold, and more. Somehow after all this Zach ends his adventure holding on to the motto of McTrot, which is:“Have fun out there.”Case Study: Obesity and McLawsuitsAfter their success in litigation against tobacco companies, trial lawyers sought a new mass tort, and in 2001 obesity was their next campaign with McDonald’s being the target. John Banzhaf, a professor at the George Washington University Law School, said, “A fast-food company like McDonald’s may not be responsible for the entire obesity epidemic, but let’s say they’re five percent responsible. Five percent of $117 billion is still an enormous amount of money.”This is a shorter case study at only seven pages, but it generated a lot of discussion! but we also didn’t talk about a number of things!Super Size MeWe had planned to talk about this case study in light of it being the 20th Anniversary of the Super Size documentary, which famously showed filmmaker Morgan Spurlock gain 25 pounds and suffer liver dysfunction and depression. Six weeks after the film’s debut McDonald’s discontinued their supersize portions. And later in 2006 a study showed that while this kind of heavy diet does affect liver enzymes, it did not show the same dangerous effects. In 2017 Spurlock admitted to drinking heavily and hiding it not only from the camera but also his doctors. Obesity RatesIn September of 2024 new CDC data suggested that the obesity rate in US adults is no longer growing. Which seems like good news until reading that while the obesity rate is “holding” at 40%, the severe obesity rate is on the rise in the US. We do mention in the podcast how doctors continue to use BMI to screen for obesity even after admitting it’s a flawed tool. Policing Fast Food?* Planning policies to restrict the number of new fast-food outlets leads to fewer overweight and obese children according to research led by Lancaster University (link).* Levying surcharges on other foods that health policymakers want to curb the public’s consumption of might also work, according to researchers tapping into data from Chicago Booth’s Kilts Center for Marketing. (link)* Removing fast-food restaurants from bases would cut obesity within the military, said Marine Sergeant Maj. Troy E. Black, Senior Enlisted Advisor to the Chairman of the Joint Chiefs of Staff. (link)* OTOH, it turns out that consumers’ buying habits do not change markedly in response to the higher prices, and that the burden of those taxes falls most heavily on the low-income, who allocate larger shares of their budgets to food than wealthier people do. (link)Taste Test: Larry’s Chili DogIt’s hard to really enjoy a burger with all the talk about how unhealthy it is, so this week Hamburger Business Review checks out Larry’s Chili Dog, a southern California restaurant that is not part of a chain, but a classic example of a Los Angeles burger joint..Next Up: Automation w/ Brian MerchantNext week we’re talking about a recent attempt by McDonald’s to introduce more automation into a store and the backlash that happened after. To help us dig into the issue we’re being joined by author and reporter Brian Merchant who wrote Blood in the Machine which is about the Luddites rising up to fight the factories coming for their livelihood. Should be fun!If you enjoy Hamburger Business Review you can support us by subscribing, buying merch, or even just buying us a burger. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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Burger Partner
Dec 13, 202400:52:15Tap to summarizeOur guest is Kathryn Borel, a television writer and the romantic partner of co-Host Mike Merrill. Chris and Zach go deep with Kathryn about what led Mike to start working at a hamburger restaurant and the impact of that on their relationship.McTrot Is Just About To Happen!Mike comes back to join Chris in the final interrogation of Zach who is in the final hours of preparation before his annual trek to visit all the McDonald’s in Manhattan on foot within 24 hours.He seems calm and confident. Is he posturing? Is he hyping himself up? How confident is he that he will set a record? Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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Corporate Adaptation
Dec 6, 202400:57:29Tap to summarizeToday at Hamburger Business Review we keep talking about politics and burgers, the McTrot, more from inside the hamburger restaurant, and a new case study about what McDonald’s had to do in order to make it work in India. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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The Discount Wars
Nov 29, 202400:57:02Tap to summarizeHello Hamburger Friends,Today we’re talking about the tactical use of prices and deals and looking at how much value you can squeeze out of a value meal (or how much value they can squeeze out of you).Our case study is about a flawed 55 cent promotion that over promised and underdelivered, upsetting both customers and franchise operators. The Price of the Hamburger is Too Damn HighThe cost of ground beef has risen sharply from the mid-80’s. In 1984 it was just $1.29 per pound and today is $5.59.Sens. Elizabeth Warren, Bob Casey, and Ron Wyden sent a sternly worded email to McDonald’s President and CEO Chris Kempczinski demanding to understand how a company could dare increase prices more than inflation (which they also shared with the press of course).McDonald’s released a statement saying this letter from the senators:“demonstrates a lack of understanding of our franchise business model and contains contortions of facts and many inaccuracies.”What is a Modern Hamburger Restaurant To Do?As consumers and politicians (and even the companies themselves) grow more concerned with increasing prices (let’s ignore that pesky income disparity issue, right?) we have entered a new era in the hamburger business…The Discount WarsIn recent weeks, McDonald’s, Burger King and Wendy’s announced new value meals, while Target, Walmart, Walgreens and Amazon Fresh said they would cut prices on thousands of items. So McDonald’s isn’t just fighting other fast food brands, or even other restaurants, but companies like Target, Amazon Fresh, and local grocery stores. Uber Eats and DoorDash present every local food option, meaning a price conscious consumer has a lot of choices.Case Study: McDonald’s 55 Cent PromotionAll of this leads into our case study, which comes from Dr. David Robinson and the University of Berkeley’s Haas School of Business.The problem: By 1997, McDonald’s was facing an unsettling challenge: slowing sales growth and intense competition. The fast-food giant unveiled an ambitious and nostalgic strategy—“Campaign 55.” The plan was that each month, a signature burger would be spotlighted at the throwback price of just $0.55, a nod to the year McDonald’s was founded. The campaign launched with the iconic Big Mac.Faced with customer and franchise owner anger, McDonald’s corporate abruptly pulled the plug on the campaign that was supposed to last the entire year. We go into more detail on the podcast and discuss how these price reduction strategies can backfire. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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Harmburgers
Nov 22, 202400:52:23Tap to summarizeWelcome Hamburger Enthusiasts!Chick-fil-A has launched “Chick-fil-A Play” and it's... popular?The cow mascots are here, and the app lets you “watch, play, create, listen, and read” and will occupy your kids so you can enjoy your Honey Pepper Pimento Sandwich.This is a free app. The only monetization strategy is hoping you to buy a chicken sandwich.The End of the McBroken Era?Thanks to the work of Public Knowledge and iFixit the US Copyright Office has partially granted an exemption to the DMCA which will allow people to circumvent digital locks in order to repair commercial and industrial equipment.What this means is that individual owner/operators of a franchise can now legally attempt to repair their own machines!The E. coli Story ContinuesNot counting the costs of the lawsuits that have started, it’s now being reported that McDonald’s is investing $100 million to bring customers back, with $65 million going to support owners who lost business and $35 million into marketing efforts.My Hamburger RestaurantMike says he is pretty good at drive thru now, and he gets complimented on his radio voice pretty often. The multi-tasking is next level and the tasks never end, but the system is pretty well designed. Introduction to McTrotZach is prepping for his 3rd annual McTrot, which he explains as a “challenge to eat at every McDonald’s in Manhattan within 24 hours, entirely on foot.” It’s an absolutely insane, and seemingly impossible task.Case StudyThis week’s case study is McDonald’s China: The Expired Meat Scandal that takes us back to 2014 when a Shanghai broadcaster secretly filmed inside the food processing plant of Shanghai Husi Food, a subsidiary of U.S.-based food supply giant OSI Group.Obviously this case study made us think a lot about the E. coli situation McDonald’s is currently navigating (though is mostly out of the news now) with a slight dip in the share price. Mike remains bullish, but we don’t make recommendations and in fact recommend not choosing individual stocks. Get full access to Hamburger Business Review at www.hamburgerbusinessreview.com/subscribe
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