Sarah Stowe

So welcome to the podcast, Cameron. Can you start off by telling us a little bit about your journey with McDonald’s?

Cameron Newlands

Yeah, thank you, Sarah. So nice to be here. Thank you very much for the opportunity. I’m one of those Maccas stories that is pretty common in Australia, but something we’re really proud of. I’ve been with McDonald’s for 24 years. I’ve done a wide variety of operations roles all the way from sort of shift manager, restaurant manager, and then moving through various operational roles, which was my first exposure to our franchisees. So actually working as a consultant and then a franchise manager and really sort of getting that wide business knowledge across all the areas of the McDonald’s business. In my current role, I’m the chief restaurant officer for McDonald’s Australia. So looking after all aspects of our operational side of the restaurants, I’m really focused at the moment on a number of key areas. So it’s a really exciting time to be part of Maccas.

Sarah

So how does that role of chief restaurant officer, senior vice president chief restaurant officer, how does that intersect with the rest of the business?

Cameron  

Yeah, absolutely. So I’m part of our senior leadership team, working really closely with a lot of our other functions. Clearly, for a business like McDonald’s, translating our corporate strategy into what our customers and our people receive in the restaurant is one of our biggest objectives. We employ over 110 ,000 people. We run over 1 ,000 restaurants in Australia. So every decision we make at a corporate level in partnership with our franchisees and our suppliers has a really big impact on our restaurant and our customers. 

So I see my role on the senior leadership team is really translating the voice of the restaurant and making sure that in partnership with our other functions and our other leaders, that we’re really making our customer-led decisions and also really keeping our crew and managers in our restaurant at the heart of how we actually bring the business forward.

Sarah 

So let’s talk about the growth of McDonald’s. I mean, you mentioned there that there’s over a thousand restaurants across the country. And if you look at those numbers, an outsider might quite reasonably perhaps think the Golden Arches has really reached saturation point in Australia. Obviously McDonald’s thinks differently. So what are your plans for growth and why, and how are those plans tracking?

Cameron  

Look, we’re really proud of our history in Australia, but I think we’re even more excited about our future. So we’re on the public record of saying, you know, we want to open 100 restaurants in the next three years. And that sort of net new restaurants to our portfolio. But when we talk about sort of investment in Australia, the other part of that is making sure that we’re really keeping our current fleet of restaurants up to standard and modern expectations with our customers.

I think you’ve seen through a lot of businesses, the way that customers interact with our brand has changed a lot, particularly post pandemic. So for us, it’s really making sure that our restaurants reflect the shift into delivery ordering, the shift into digital ordering, and really elevating that experience and the way that customers and our people work in the restaurant environment. So we’ve got a really heavy focus on reinvesting in our current fleet and really creating that consistent customer experience all through the network. 

But then excitingly, looking at those opportunities to invest in new restaurants. And most of those will be free standing drive-through restaurants. But we’re also looking at other opportunities of where customers habits are changing or the way that they’re using public transport or moving around the city is changing. And how does McDonald’s sort of easily fit in the most convenient way to that occasion as well?

Sarah 

So that sounds like fresh formats in terms of what you would be putting out as other brands are doing in the fast food arena.

Cameron 

Yeah, look, I can give you an example that some of our listeners might be familiar with, which is like Wynyard Station. So, yeah, looking at that train station redevelopment, a really exciting opportunity and great partnership for us. So it’s all the products and the experience our customers expect, but in a smaller format, at a really high turnover, high guest count restaurant. So that’s the sort of example of why we really see the opportunity to be more convenient along with that sort of traditional drive -through format that you see right across Australia as well.

Sarah

So that kind of brings us to location effectively. Obviously, you’re talking about different formats, you’re talking about high traffic. A lot of the newer locations have been out in the regional areas, and I wonder if that’s going to kind of continue as a development plan. And I also wanted to ask you about community opposition because that does happen in some of your development sites. So I wanted to just unpack that a little bit and find out how you make those choices about site selection and how negative community response can have an impact.

Cameron 

Yeah, absolutely. Look, we are really focused on making sure we are sort of where our customers need us. Obviously, any development or any decision like that, we put a huge amount of focus and rigour into that up to and including, I guess, consulting with those communities, engaging with councils and making sure that our consultants are giving us the very best advice as it comes. We’re really proud of the employment opportunities we offer, the contribution that we make to the economy of Australia through things like farming.

But for us, it’s really making sure that we’re identifying where there is growth, more people living, more people moving around cities, that we’re engaging with communities and making sure that we’re addressing the feedback where it’s there, but also that we’re continuing to provide that convenience for our customers that’s been really the history of Maccas in Australia over the last 50 years.

Sarah 

So you’re talking there about obviously responding to people’s demands and convenience. So does that kind of indicate that you’re following kind of population trends in terms of, you know, if there’s particular growth in outer city areas, outer metro areas, that that’s where you’re going to be looking to develop?

Cameron 

Yeah, look, I think if you think about 100 new restaurants over three years, there’s obviously a multitude of different opportunities that we continue to look at. We’re focused on looking at where our customers are moving around cities, where there’s opportunities around infrastructure development and things like that. But definitely where population growth is, we’ll continue to be part of our strategy as well. But when you’re opening 100 new restaurants, there’s multiple opportunities right across the country that we’re looking at.

Sarah 

So you’ve onboarded a record number of franchisees in the past year, I understand, which is fantastic. Can you just tell us about that recruitment and the training process for new franchisees?

Cameron 

Yeah, absolutely. Look, just to share the number, we recruited 12 franchisees in the last 12 months, which is actually more than the last five years combined. So it gives you an idea when we’re talking about sort of new restaurant development, we’re talking about reinvesting in our current restaurants. We’re also investing in our franchisees. And, you know, we see that as our competitive strength right across the market. Having the very best franchisees gives us the ability and the confidence to make those sort of decisions.

So look, as you’d expect, given the size and the maturity of our business, there’s a lot of rigour in the recruitment process. And I look at that as two-way rigour. So we absolutely want to make sure that if someone’s applying to be a McDonald’s franchisee, that they go in eyes wide open. It’s not a passive investment. It’s a business that you own and operate, that you’re in every day, that you’re side by side with your people and your customers.

And for that reason, it’s critical to us that someone who’s investing their life savings and their hard earned money in a business like ours, fully has the opportunity to immerse themselves in the business. So that includes meeting with a wide range of the corporate team, including myself through the process, meeting with a number of current franchisees. And we really encourage them to ask those sort of questions that they may be not comfortable to ask us. Go and ask a franchisee who’s been through a similar experience and ask them what their experience has been. We encourage them to actually work in a restaurant. So part of the process is working three days side by side in a restaurant right across all stations. Part of the process is speaking to some of our advisors. So clearly if you’re making an investment like this, we want you to have independent advice and to really stress test the decisions that you’re making and the advice that you’re being given.

And look, that is really important for us to get some visibility to the candidate. But we really want to make sure that when someone’s applying to be a McDonald’s franchisee, it’s a 20 year commitment that they have all the information they need to be confident in us as a franchisor, but also to kind of understand the culture and how the system operates.

Sarah 

So does the training, the kind of the training and the recruitment processes in a sense, one, is that kind of correct? Is that my, that was my understanding.

Cameron 

Yeah, it’d be easier to break them up into sort of two parts. So the recruitment process sort of gets you to a point where we approve you to move into training. That decision is something we refer to as our review board, which is made up of senior leaders in the business. The training process after that is typically between nine and 12 months. And that’s broken up into four stages. So yeah, the first stage is is genuinely sort of learning the art of making barista made coffee. It’s making cheeseburgers. It’s pulling apart shake and Sunday machines and it’s those those tasks that you won’t spend a lot of time doing as a franchisee. But if you’re trying to drive a team and understand how to make change in a restaurant, having that intimate knowledge of the business is just so critical. And then as you move through the various stages, you spend time with some of our high performing current franchisees learning how do they operate their business? How do they set up their structures? How do they drive culture in their business as well. And we find sort of moving from learning the functional parts of Maccas to learning how to run a really successful high performing organisation is a nice way of sort of culminating and then being ready to go in and negotiate in your own McDonald’s restaurant.

Sarah 

So you mentioned there that it’s kind of a nine to 12 month process. And I would imagine then that that is one of the challenges in terms of recruitment for you. Yeah. So could you just tell us a little bit about what those challenges are? Because I mean, on the one hand, I think everyone would probably go, great, I really want to have a McDonald’s. But there are certain obstacles that are going to be in their way in a lot of instances.

Cameron 

Yeah, absolutely. And look, that is certainly something that we discuss with individual candidates about their circumstances, their location of living, their family situation. We understand that is a big ask on the way in. I think on the flip side, when someone’s investing their significant amount of money, they’re signing up for a long term commitment, you don’t want to go in sort of half ready. We know that our very best franchisees look back at that experience and say, God, it was hard work. You know, I roll up my sleeves, I worked night shifts, I was side by side with the crew. 

But, you know, when you look back sort of two or three years in, I’m so glad I invested that time upfront. So it really does come down to those individual candidate discussions as to how we may need to think differently and look at that training program and sort of cater it for different circumstances.

Sarah 

So are there other challenges at the moment in terms of recruitment for franchisees?

Cameron 

Yeah, the first one will probably surprise you. I think one of the biggest challenges actually probably belief and awareness that we’re even recruiting. And yeah, I think that’s a lot of people talk about McDonald’s as an amazing franchise business. And yeah, they talk about, you know, wonder how you would become a McDonald’s franchisee. And, you know, at this point in time, there’s a heap of information on the website. So like this information available to people, but not many people have sort of personal stories of no people that have been through that journey. So the first thing for us is sort of creating awareness. And the other piece that I think we’re really conscious of and probably surprises people is we’re not just looking for people that have a background in franchising or people that have run their own restaurant. We’ve got people that apply to be a franchisee that come in with adverts with so different experience in things like advertising people from the automotive industry. 

Like we’ve got a wide range of backgrounds of people that come into McDonald’s and are highly successful. So I think that is often not well known. People are like, well, I’ve never worked in a restaurant, I’ve never owned a franchise, so therefore I couldn’t be successful. Largely, we believe that the diversity of experience and the diversity of background actually drives better outcomes in our franchise system because you’ve got different ways of tackling problems. You’ve got people that actually bring in different perspectives or have been through different challenges. And that makes our franchisee network sort of far richer and far more diverse in terms of how we are able to partner across the three legged store.

Sarah 

So do you have particular targets in terms of recruitment as well? Because you’ve sent 100 new stores. Are all of those going to be two new franchisees? Because I know that there’s a lot of multi -unit ownership in the business.

Cameron 

Similar to our new restaurant strategy, we will look at multiple different ways with those hundred restaurants. Typically, they are open by existing franchisees because you can imagine to open a new restaurant with a new team, new people. It is a very difficult to do from the ground up. So typically they would be open by existing franchisees. But what that does mean is that there may be opportunity to purchase existing restaurants in Australia as well.

Our target for the next five years is to recruit 50 new franchisees. So that is a really substantial goal for us. And something that’s going to require a really different focus and way of thinking for us as well. But they will typically buy into existing restaurants. And then obviously, as they move and progress through their career, there’s often the opportunity to open a new restaurant, which is a really exciting experience for a franchisee. It’s not something everyone gets to do.

Sarah

So given everything that you’ve talked about, there’s the intense process of recruitment. We’ve talked about that kind of approach and how that’s changing a little bit perhaps in terms of flexibility. A lot of people assume that a Maccas is a gold mine, effectively. It’s a large investment and they’re saying, okay, you can’t fail. Is that true?

Cameron

I think anyone looking at a franchise business should not go into it with the attitude of you can’t fail. I think doing the right regard, the right due diligence around any opportunity, I’d encourage everyone to do. We simply can’t have that attitude when it comes to looking at a business. We would encourage people to look at our history. We’re really proud of what we’ve done in Australia.

We have for anyone that’s looking to buy a franchisee, we open the doors to engage with the corporate team, engage with the franchisees, meet some of our suppliers as well. So really do your research and form your own view as to the strength of the business. We think it’s an amazing business. We’re incredibly proud of it. But I would certainly say to anyone, you should be doing your due diligence. You should be making sure that you’re comfortable and your questions are answered. Given the size of the investment and the level of decision that we’re asking people to make.

Sarah

So one of the things that McDonald’s has been doing is really kind of focusing on sustainability within the stores. And I know you’ve had a fantastic flagship open that’s sort of showcasing what you do, how important is that now and in terms of kind of the fleet of restaurants that you’re talking about, that sustainability environmental element.

Cameron 

Yeah, there’s some things that you’ll see in our business today that are across a thousand restaurants. And I’d use the example of like a paper straw that we did a number of years ago in the business. And I think what we learned from that is Australians expect businesses like ours to move. And that is absolutely something that we continue to look at. What we learned through paper straws, it’s not easy. I think as you make those changes at our scale, we need to make sure that we are taking our customers on the journey and that we’re also making sure that we maintain and approve the customer experience that comes with it. 

One of the things that is a little bit difficult in that space, if I’m really honest with you, and I’m sure a lot of businesses feel this is legislation and the way that things are forming is quite different across the states. So for a business like ours that operates across Australia, then we’ve got to make sure that we’re responding sort of at a slightly different pace, maybe with a slightly different solution, depending on what’s happening across the states. And that is difficult for us, even given our size and scale, but it’s also a little bit difficult for our customers, who are used to quite a consistent experience across Australia. But absolutely sustainability and the way that we front up in that space is something we continue to work on across our business.

Sarah 

And lastly, McDonald’s has had a foothold for many years in Australia. There have been some kind of new American recruits, if you like, the Wendy’s brand is set to expand. There are other American favorites such as Carl’s Jr. and Five Guys already launched. They all have their own specific market. But that all impacts on the burger market at large and I realize McDonald’s is more than that but that’s its traditional market. How is McDonald’s going to maintain that, its position in what is an increasingly competitive fast food market?

Cameron 

Yeah, look for us, the best thing we can focus on is what’s happening in our own business. So what are our customers saying? What are our people saying? What do we need to do to respond to the needs of the modern Australian? That’s where our focus is. So we’ll continue to elevate what we’re doing around quality, what we’re doing around service. I spoke to you about our investment in our restaurant fleet. Like for us, that is the best way of us making sure that Australians continue to prefer the McDonald’s business.

There will constantly be interest in this market. It’s an amazing market to operate in. It’s an amazing country to live in. So we know there’ll continue to be interest, but for us, we really want to stay focused on what’s going on within our business and how do we continue to stay ahead of the competition by listening to Australians.

Sarah 

Fantastic. Well, look, Cameron, thanks so much for sharing some insights into the expansion and recruitment targets and processes. And we’re interested to see how McDonald’s shapes up over the next couple of years. Thanks for your time.

Cameron  

Thank you very much for your time, Sarah. I appreciate it.