McDonald’s had a complicated worldwide situation to report last week on its earnings call with the sale of its Russian business and a large tax settlement paid in France. Notwithstanding, it beat earnings but missed on revenue by modest amounts. In the all-visible US market, same-store sales were up 3.7 percent – just short of estimates, but CEO Chris Kempczinski was gloomy on consumer trends and outlook, but noted that breakfast sales were up (but that is seasonally expected). He confirmed average check party size changes and that some trade down among consumers from combo menus continued. They also updated their food and paper US commodity forecast to plus 12 – 14 percent for the year and labor wage rate inflation continuing at plus 10 percent. With this, franchisee store margins are likely down 3 to 5 full percentage points from last year and franchisees are taking price increases where they can, noted DDIFO Financial Analyst John Gordon. The CEO and management were asked about the franchisee angst over new franchisee contract standards coming in 2023 to which Kempczinski responded that he expected to get angry comments from poor franchisee operators. He went on to say that the new standards were designed to ensure the best franchisee operators possible. Gordon notes that this response flies in the face of the overwhelming majority – 87% of National Owners Association (NOA) members expressing no confidence in U.S. management.