America loves these 2 burger chains more than McDonald's

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McDonald's(NYSE: MCD) has recently made solid progress in turning around its business with all-day breakfast, new McPick value menu combinations, and next-gen initiatives like self-serve kiosks, table-mounted tablets, and tableside ordering. Unfortunately, the Golden Arches still isn't faring too well in terms of brand perception.

In a recent Harris Poll, which ranks domestic brands based on familiarity, quality, and customer service, McDonald's failed to rank among the top seven burger chains in America. Privately held In-and-Out, Five Guys, and Culver's claimed the top three spots in that order. Only two publicly traded companies -- Wendy's (NASDAQ: WEN) at number four and Sonic (NASDAQ: SONC) at number five -- made the list. To make matters worse, Harris states that it reviewed McDonald's during the study, but that it ranked below the category average.

McDonald's is consistently less popular

This isn't the first time Wendy's and Sonic bested McDonald's in brand perception. In YouGov BrandIndex's list of fast-food chains which received the most positive buzz from customers in 2015, Wendy's ranked second after Subway. Sonic was ranked fifth, and once again McDonald's didn't make the cut.

Temkin's 2016 Experience Ratings, which polled 10,000 customers, ranked Chick-fil-A as the top fast food chain and the third best company out of 294 companies across 20 industries. Wendy's and Sonic both ranked lower on Temkin's scale, respectively coming in 42nd and 51st overall. But both companies fared much better than McDonald's, which tied Restaurant Brands International's Burger King for 100th place overall and dead last in the fast food category.

See the 10 most expensive burgers in the world:

10 most expensive burgers in America
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10 most expensive burgers in America

What: Fleurburger 5000
Where: Mandalay Bay (Las Vegas, Nevada)
How much: $5,000

Patty consists of Wagyu beef and foie gras, covered in black truffles and truffle sauce in between a truffle bun. Served with a bottle of Bordeaux (estimated at around $2,500) and two Ichendorf glasses as souvenirs.

Photo credit: Facebook

What: The Absolutely Ridiculous Burger
Where: Mallie’s Sports Grill & Bar (Southgate, Michigan)
How much: $1,999

Guinness World Record holder for World's Largest Burger; consists of 350 pounds of beef and requires 72 hours of notice for preparation

Photo credit: Facebook

What: 777 Burger
Where: Burger Brasserie (Las Vegas, Nevada)
How much: $777

Kobe beef burger, topped with Maine lobster, foie gras, goat cheese, and 100-year-old aged balsamic. Served with a bottle of Dom Perignon.

Photo credit: Facebook

What: 666 Douche Burger
Where: 666 Burger Trucks (New York, New York)
How much: $666

Kobe beef burger wrapped in gold leaf, topped with lobster, caviar, truffles, foie gras, Gruyere cheese that's melted with champagne steam, and barbecue sauce made from droppings of the Asian Palm Civet

Photo credit: Facebook

What: Le Burger Extravagant
Where: Serendipity3 (New York, New York)
How much: $295

Wagyu beef patty topped with aged cheddar, black truffles, white truffle butter and quail egg served on a white truffle-buttered bun. Held together by a golden diamond-encrusted toothpick.

Photo credit: Facebook

What: B&B Indulgence
Where: Beer & Buns (New York, New York)
How much: $250

Kobe beef patty, topped with seared foie gras, truffles and caviar.

Photo credit: Facebook

What: The Mother Burger
Where: Burger & Beer Joint (South Beach, Florida)
How much: $125

18 pounds in total, 10 pounds of meat and choice of two in-house toppings

Photo credit: Facebook

What: DB “Royale” Double Truffle Burger
Where: DB Bistro Moderne (New York, New York)
How much: $120

Only offered when black truffles are in-season. Ground beef patty stuffed with boneless short ribs, foie gras, root vegetables and black truffles. Topped with a second batch of black truffles.

Photo credit: Facebook

What: Grand Burger
Where: McGuire Irish Pub (Destin, Florida)
How much: $100

Ground beef and filet mignon patty. Served with side of caviar, merlot sauce for topping and a bottle of Moet.

Photo credit: Facebook

What: The O.M.G. Burger
Where: The Catch (Anaheim, California)
How much: $74.99 (can be doubled for another $30.99)

Lean ground chuck beef patty, topped with ten slices of cheddar and remoulade sauce in between a 14-inch bun. Served with 4 pounds of fries.

Photo credit: Facebook


It's hard to pinpoint a single reason as to why public opinion of McDonald's is so low, but its vilification in obesity lawsuits and documentaries, urban legends regarding its meat processing facilities, and the perception of its burgers as "cheap" and "frozen" have all likely taken its toll on the company. Investors will notice that McDonald's poor public image complements its weaker stock performance over the past five years compared to Wendy's and Sonic.

MCD Chart

Source: YCharts.

But don't count McDonald's out yet

However, that chart can be misleading due to the fact that McDonald's is a much larger company than Wendy's and Sonic, so it should have less upside growth potential. Moreover, QSR Magazine reported last August that McDonald's still generated an average of $2.5 million in sales per location, which is far more than Wendy's average sales of $1.59 million and Sonic's sales of $1.15 million.

Those figures seemingly indicate that customers will still visit McDonald's, regardless of their perception of the brand. However, Chick-fil-A -- which consistently tops customer satisfaction and brand perception surveys -- notably beat McDonald's in 2014 with per unit sales of $3.06 million.

But compared to Wendy's and Sonic, McDonald's hasn't fared too badly in terms of overall comps growth. McDonald's systemwide comps rose 6.2% last quarter, compared to 3.4% growth at Wendy's and 6.5% growth at Sonic. This indicates that McDonald's aforementioned turnaround efforts have been boosting domestic comps, which rose 5.4% last quarter -- surveys and polls might not reflect those improvements yet.

We should also note that the majority of Wendy's locations and all of Sonic's drive-ins are located in the United States. McDonald's only generated 34% of its sales from the U.S last quarter, which softens the impact of its brand perception back home.

But can McDonald's improve its brand?

McDonald's probably won't become as popular as In-and-Out or Five Guys in the near future, but there are a few steps that it can take to score more highly in these polls. McDonald's plans to boost its percentage of franchised locations from over 80% today to 95% "over the long term," which would boost profitability by reducing overhead costs.

But that strategy is also risky, because aggressive franchising strategies can cause quality control issues and inconsistent dining experiences. In the age of social media, nightmarish dining experiences can go viral and tarnish a restaurant's brand.

McDonald's recently started testing out fresh meat patties instead of frozen ones at select locations in Dallas, which indicates that it's serious about challenging chains like In-and-Out and Wendy's, which both use unfrozen beef. If McDonald's fresh burgers are well-received, the company might decide that spending more money on fresh patties could be worth the boost in its overall brand perception.

The bottom line

Harris Poll's numbers might initially look alarming for McDonald's, but investors should note that its comps have been improving both in the U.S. and in overseas markets, thanks to its wide range of turnaround efforts under CEO Steve Easterbrook. However, improved customer perception would certainly help McDonald's, so investors should see if the chain advances in these polls over the next few years.

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RELATED: See photos of fast food from around the world:

Fast food from around the world
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Fast food from around the world
McDonald's Japan serves rice cheese balls! A crispy outside with a warm, gooey inside -- YUM.
McDonald's India features the McAloo wrap. Aloo is a type of potato curry and McDonald's put its own spin on it by wrapping a flour tortilla around an aloo patty garnished with lettuce, onions, vegetables, and sauce.
Pizza Hut Russia serves an Oktoberfest seasonal pizza with Bavarian sausage, pepperoni, vegetables, sauce, and mustard. You like?
At Burger King Argentina you can order a Churrasquito. It's grilled over hot coals and served with cheese, lettuce, tomato, and mayo.
At select Wendy's locations in Australia, you can order a Brekky dog -- a breakfast style hot dog. GOOD MORNING to that!
Taco Bell Japan serves a shrimp and avocado burrito. This exclusive item has only been on the menu since April 2015!
Known as 'Maccas' in New Zealand, McDonald's menu there includes 3 savory pies. This one is the Mince 'N' Cheese pie stuffed with ground beef and cheese. 
At Pizza Hut in Saudi Arabia you can order a seafood pizza, including shrimp, calamari, crab, and vegetables on a thin crust.
McDonald's serves porridge in Thailand! 
You can order chili cheese nuggets from Burger King in Hungary. Bits of jalapeño peppers and a spicy kick.

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