DEEP DIVE 

McDonald’s Launches Space Themed Concept: CosMc’s

McDonald’s is launching a new concept, CosMc’s, making it possibly their largest move outside of their core business in over 2 decades.

There was an era for the golden arches when they owned 90% of Chipotle, incubated Rebox (yes, the DVD vending machine service), acquired Donato’s, acquired Boston Market, and more deals that had nothing to do with burgers and fries. 

The majority of that action took place between 1997-2007, but by the end they had cited a stray away from core ops as the reason for exiting every single position.

But CosMc’s isn’t a wild venture outside of the McDonald’s franchise. Yes, it’s a different store (that isn’t currently being franchised), but it still feels very McDonald’sesque, as it maintains the tie to the parent brand. 

What is CosMc’s?

The new concept was first announced on a company’s earnings call in July of this year, with CEO Chris Kempczinski saying it will have “all the DNA of McDonald’s but its own unique personality.” 

The chain is named after CosMc, an orange alien character introduced to the McDonaldland universe in 1987, who attempts to take a cheeseburger picnic back to his home planet before being convinced by Ronald McDonald that sharing is better. 

Fun fact: he would also go on to be a character in the videogame M.C. Kids, a very obvious Super Mario knockoff

The menu includes a churro frappe, a sour cherry energy boost, and a popping pear slush. 

The menu also includes sandwiches, breakfast options, and baked goods. There’s a spicy queso sandwich and classic McDonald’s breakfast options like the Egg McMuffin and Sausage McMuffin with Egg.

To me, it’s a mix of the McDonald’s breakfast vibes combined with the Dutch Bro’s drive thru model. 

Should Coffee Chains Be Worried?

Not really. Nobody at corporate Starbucks or Dutch Bros, or anyone at Dunkin’ (the franchisor) is hitting the panic button.

CosMc’s is obviously competition, but these chains are BIG.

Dutch Bro’s

• Average Revenue: ~$1.5M
• Total Locations Open: ~540

Starbucks

• Average Revenue: ~$900k+
• Total Locations Open: ~35,000

Dunkin

• Average Revenue: ~$1.1M
• Total Locations Open: ~8,118

The “big beverage” mafia is massive, and has no signs of slowing down expansion. If a CosMc’s opens up right next to a franchisee of Dunkin’, there of course can be some market share being taken, but overall these brands are dialed in, and the market can support more competition. 

Corporate Mickey D’s, according to an anonymous McDonald’s franchisee, is potentially using CosMc’s as test locations to gather market data about what drinks and menu items are most popular, which can then be rolled out to thousands of franchisees. 

More details are expected to come from corporate this week, but overall it’ll be fun to watch what is done with CosMc’s!

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FRANCHISE HEADLINES

CEC Entertainment CEO David McKillips Unveils Plans to Remodel Chuck E. Cheese Locations Nationwide

Chuck E. Cheese’s 43-year-old animatronic musicians – Munch’s Make-Believe Band – were supposed to be on a farewell tour in all of the children’s pizzeria-game-party venues across the nation. But a reprieve of sorts was disclosed, as reported by The Washington Post. CEC Entertainment officials announced that the band will play on in a “permanent residency” in California.

The quick-service restaurant has had its fortunes rise and fall through the decades, but it was a strong performer in 2022, with $912 million in revenue, according to Zippia.com. In a bid to maintain the brand’s health, CEC Entertainment CEO David McKillips is overseeing a remodel of all of Chuck E. Cheese’s 472 U.S. (corporate and franchise) and 86 international (including Europe and the Middle East) stores, he told The Washington Post on Nov. 12. As a result, the Munch players’ real estate is giving way to other, trendier entertainment. 

Papa Johns, EEOC Settle in Disability Discrimination Case

The Equal Employment Opportunity Commission sued Papa Johns in March, claiming the pizza franchisor illegally fired a blind man who requested to keep his service dog on site, “away from both customers and food preparation activities during his shifts,” according to a press release from the EEOC. The commission claims the termination violates the Americans with Disabilities Act.

Papa Johns will pay $175,000 to the employee in question, Michael Barnes. The lawsuit was settled November 20. The brand will also train its employees on the ADA and review its employment policies. The commission will monitor complaints of “discrimination or retaliation,” as part of the settlement.