Midday Report: McDonald's Tells Franchises 'Service Is Broken'

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McDonald's tries to make its service friendlier, and Taco Bell looks for healthier menu options.

The top complaint of McDonald's (MCD) customers is that employees are rude or unprofessional. According to The Wall Street Journal, company officials recently told franchise operators that "service is broken" – that's a quote – and they need to fix the problem.

The Journal reports that one in five customer complaints have to do with the friendliness of the people who work at McDonald's, and the number of complaints about service has increased significantly over the past six months.

QSR Magazine does an annual study of service at fast-food chains, and McDonald's has consistently ranked near the bottom. Of the seven major chains in last year's report, only Burger King (BKW) scored lower than Mickey D's for friendliness of its employees.

During its webcast with franchisees, McDonald's said customers value good service almost as highly as price.

In addition, McDonald's is one of the slowest fast-food chains. In an industry where every second counts, QSR found the wait time at McDonald's drive-through windows was about 189 seconds. That compares to less than 130 seconds at Wendy's (WEN), the industry leader.

Why does McDonald's have these problems? There's no one answer, but the Journal notes that employee turnover is very high, and that 90 percent of its restaurants are not owned by the company, but by individual operators.

Despite these problems, McDonald's is doing plenty of things well. It continues to remodel its restaurants and roll out new menu items. Also, earnings in the fourth-quarter beat expectations. Its next earnings report is due out next week.

As for Taco Bell, owned by Yum Brands (YUM), the company says it wants to offer "more balanced" nutritional choices on its menu. It plans to launch some new products next year, and it may reformulate some current menu items. And eventually, by 2020, one out of five combo meals will meet federal guidelines for calories and fat content.

That's part of a growing trend in the industry, even though some critics complain that the new "healthier" offerings are not really all that healthy.

–Produced by Drew Trachtenbeg

28 PHOTOS
Go Inside The Secret Test Kitchen Where McDonald's Invents New Menu Items
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Midday Report: McDonald's Tells Franchises 'Service Is Broken'

Tucked away at the McDonald's C.O.B. — or Campus Office Building — is the test kitchen, where the fast food chain comes up with all sorts of products.



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The kitchens are up on the top floor on Big Mac Blvd. Yes, McDonald's names all the "streets" in its global headquarters office building.



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Here's what Big Mac Blvd. looks like. Kitchens on the left, cubicles on the right.



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Here we are — the test kitchen is called the Culinary Center.



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It's a bit strange, actually — a McDonald's kitchen encased in glass that's more fitting for a conference room.



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The kitchen has some appropriate reading.


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We met up with Chef Jessica Foust, a nutrition and culinary manager at the test kitchen.



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Judging by the setup, the kitchen was prepped to handle the McWraps and Fish McBites. The box o' fish is the McDonald's latest limited-time offering, hitting locations just in time for Lent.



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It has all the gadgets that a regular McDonald's kitchen would have.



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Like these handheld pumps.



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And the usual cups and shakers.



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There's even a little guide on how to get buns toasted perfectly.



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So we ran through the whole process of making a McWrap — a product that McDonald's is counting on going forward.



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The whole assembly line was set up — simple enough.



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The finished product (well, after we'd taken a bite) — just like you'd see in restaurants.



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We also got to try those Fish McBites, which weren't in stores yet.



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The breading's different from a Filet-O-Fish and it's a totally different experience.



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A lot of people shy away from fast food fish, but it wasn't too bad. We wouldn't go out of our way to order it, though McDonald's Filet-O-Fish lovers might.



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What's Foust's favorite item that never made it into restaurants? A blueberry yogurt ice cream shake, she told us.



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That's not the only kitchen at the McDonald's HQ. There are plenty more running down the side of Big Mac Blvd.



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On the way to another one, we ran into Chef Dan Coudreaut, the executive chef at McDonald's.



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Other chefs were at work too. This one was getting some bacon ready for some unknown project.



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It was a bit of a mess in there, like a scientist's lab, with chefs busy at work with their food.



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There's also the Sensory Evaluation Center, which McDonald's uses to test the new stuff they're experimenting with in order to get the feedback to improve the products.



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It's a key part of product development. In the Difference Test, you evaluate everything from appearance and color to viscosity and flavor.



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The items come through a magic door. We tasted a set of mango pineapple smoothies and each of them were slightly different.



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