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Scott Jagow: Food prices have people eating out less. Unless it’s to hit the dollar menu at Mickey-D’s. But the local people who run each McDonald’s do not like this development. Dan Grech explains.
Dan Grech: McDonald’s best-selling sandwich isn’t the Big Mac — it’s the $1 double cheeseburger. The chain says it will stick with the Dollar Menu, even as cheese, buns and beef become more expensive.
McDonald’s corporate is insulated from these price increases because they’re absorbed by franchisees.
Howard Morrill: It’s a real horrible tension for these people who are potentially losing money on the transaction.
That’s Howard Morrill, an attorney that represents franchisees. The fast-food chain spends tens of millions of dollars promoting its Dollar Menu. Franchisees can opt out, but:
Morrill: You’ve basically spent your marketing dollar promoting something you don’t do. So it’s kind of a catch 22. You may have higher margin business, but you’re going to chase people away and make them angry.
Some New York stores have taken double cheeseburgers off the dollar menu. And McDonald’s is testing the sandwich in Georgia and Mississippi at a $1.09.
I’m Dan Grech for Marketplace.
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