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McDonald’s and Chick-fil-A get caught up in political intrigue

One is the center of a scandal, the other an international bargaining chip; both stories reflect the chains’ strengths, says RB’s The Bottom Line.

The Bottom Line

Fast-food chains typically become political footballs. But the stories McDonald’s and Chick-fil-A found themselves in this week were different.

First, McDonald’s ended up at the center of negotiations between North Korea and the U.S. over the former’s nuclear ambitions. North Korea apparently wants a burger restaurant, which probably means McDonald’s.

Then, it was reported that Environmental Protection Agency Administrator Scott Pruitt used staff resources to try and convince Chick-fil-A to give his wife a franchise. The story has become part of the scandals surrounding Pruitt and his use of office resources for personal gain.

Neither story is related, but both demonstrate the chains’ relative strengths. That’s a vastly different political football than usual for the restaurant industry, and those two chains in particular; debate typically centers on negatives, such as worker pay or ingredient sourcing or calorie content.

The Pruitt-Chick-fil-A story is notable because it demonstrates just how difficult it is to get a Chick-fil-A franchise.

According to the Washington Post, Pruitt apparently had staff arrange meetings with people from Chick-fil-A in a bid to get his wife, Marlyn Pruitt, a CFA franchise. Marlyn Pruitt never finished the application and never opened a restaurant.

But the story highlights just how difficult it is to get one of those franchises. Chick-fil-A awards about 100 of them every year from a pool of around 40,000 indications of interest, according to the Post. That’s a ridiculous percentage, and it shows not only how popular the chain is, but also why it is so popular.

For one thing, popular franchise systems will automatically get more interest, just like popular restaurant chains, retailers or other employers will attract a large number of applicants. People want to be part of something successful. And Chick-fil-A, with 14% system sales growth last year, according to Technomic, is definitely successful.

But the company has been careful to pick the right people to operate its business. That has ensured that its stores are run better, by people who are in the restaurants on a day-to-day basis, interacting with customers.

This is why Chick-fil-A has average unit volumes of more than $4.1 million. With six-day weeks.

So it’s no surprise that Marlyn Pruitt would want to be part of the company. But she also didn’t finish the application, which, if true, means she probably wouldn’t have gotten the gig anyway.

McDonald’s, meanwhile, apparently has some demand in North Korea, which wants a “Western hamburger franchise” as part of negotiations over its nuclear ambitions.

It’s been something of a joke, but getting a Western brand into North Korea could help ease tensions with the communist country.

McDonald’s golden arches are a huge symbol of Western culture. And franchises have expanded into communist territories before: KFC’s famous venture into China in the 1980s introduced that country to Western culture. China is now perhaps the most popular destination for brands eager to expand internationally.

McDonald’s, meanwhile, first opened in Moscow in 1990, before the breakup of the Soviet Union.

Indeed, Western brands can be an early sign of change inside closed-off countries, showing what’s possible with globalization and capitalism. And maybe their expansion can help stave off a nuclear war.

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