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Since we never saw a McDonald's fail, why did the two downtown close?
While McDonald's has around a 95% franchise success rate (much higher than the restaurant-industry average of approximately 60%), individual locations can and do fail. With 13,800 branches in the U.S. and nearing 50,000 worldwide, 95% of them independently owned and operated by franchisers, some are bound to go out of business.
After all, McDonald's franchises are hardly immune to all the reasons small businesses fail in droves every day (the latest data puts the number at 70% of small businesses that close in the first seven years). These include poor site selection with insufficient foot traffic, increased competition nearby, demographic changes in the area, undercapitalization, high operating costs and low revenue, management issues, failure to meet franchise standards, local regulations and/or restrictions, shrinkage and employee theft, changing consumer preferences, labor shortages, gentrification or declining neighborhoods, and on and on and on.
In addition, the company itself closes 100-200 underperforming stores every year.
And here's another reason. Walmart, for example, closed 850 out of 1,000 of its in-store McDonald's in April 2021 primarily due to plunging foot traffic during the pandemic and a shift toward online shopping. Likewise, there have been complete pullouts from countries like Bolivia (2002), Iceland (2009), and Russia (temporarily, 2022).
As for the two downtown fast fooderies, both of them, one at the D, the other at the Plaza, closed in August 2024. We remember at the time that there was no reported connection between the two closures, but we also heard a couple of things that might be related.
First, at the D, management spent an undisclosed, but believed to be substantial, amount of money to buy out the remaining lease for the McDonald's space. The lease was extremely long term. The McD's had been there since the late '80s as we recall and the lease didn't expire for decades, rendering the buyout a significant decision and substantial expense.
As for the Plaza, the scuttlebutt was similar. The lease was expiring and the rent was rising, so either the Plaza wanted the McDonald's gone and made them an offer they couldn't refuse or they were ready to leave anyway and didn't renew the lease.