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McBiz

Glenn Fleishmann (keeper of the excellent Wi-Fi Networking News) and I have been having an e-mail exchange prompted by his analysis of a story on Cometa in the Red Herring (in what woulud appear to be its last issue). I noted that McDonald's had 13,099 outlets in the US as of December 2001, and then wrote:

In late 2001, I heard a rumor that IBM Global Services was working on Wi-Fi deployment deals with Subway and McDonald's. I've heard nothing of this since, but is it possible that such discussions occurred prior to Cometa's launch and continue to this day?
Glenn replied:
Here's the rub: I thought Cometa was providing businesspeople venues in which they could work. If they put 5,000 McDonalds on their network in the first year, does that really achieve their "business" goal? Maybe.
Which led to the following message from me:
You ask a good question about McDonald's.

Perhaps Cometa could be as valuable to McDonald's as McDonald's to Cometa. McDonald's desperately needs assistance on the strategic marketing side. If they were to attempt a brand extension to become "the place for the businessperson on the road," could that help them? Think about the spatial positioning of McDonald's -- often right at highway exits, always clearly marked on exit signs, typically with tall signs on premises (high-gain antenna placement?). When you're on the road, it's usually far, far easier to find a McDonald's than to find a Starbucks.

Think about this, which admittedly is purely conjectural:

McDonald's creates a new branding program. They could call it "McRoad," or "McBusiness," or something else, but let's call it "McBiz" for now. McBiz is a sub-brand of McDonald's. There's a McBiz treatment that extends the existing McDonald's logo -- it's subtle, but once you know what to look for, it's easy to spot (though the uninterested might never notice it). When a restaurant switches to the McBiz branding, this indicates a number of things:

  • There's a Wi-Fi access point on premises.
  • There's at least one customer-accessible power outlet per n seats.
  • The coffee served has been upgraded (new brand, new procedures).
  • The restaurant sells the Wall Street Journal (in addition to USA Today).
  • There are at least n monitors playing CNN Headline News (sound off, closed captioned).
  • There's a customer-accessible soda machine.
I'm not much of a McDonald's fan, but if they embarked on such an effort, and made me aware of it, I'd start paying attention to them. Sure, when I'm on the road, I'd rather go to a Starbucks, but if the choice is pull into a McBiz McDonald's now or drive around for 10 minutes looking for a Starbucks, I'll probably choose McDonald's.

The nice thing about this is that it's a brand extension they can pull off without alienating their core family market. No mom and her kids are going to be offended by someone in khakis and a polo surfing on the Web using his laptop. In fact, Mom might not even be aware of McBiz -- for her, the McDonald's experience is unchanged, except that the coffee tastes better and she can refill her own sodas while she reads a magazine and keeps an eye for her kids in the ball pit.

Glenn replied:

This is a very interesting idea. The big problem is that McDonald's is a kids restaurant, which I don't think I ever understood until just a few years ago. This is its biggest strike against it: they'd have to almost create a separate area that was quiet and cleaned more frequently to make it a reasonable place for a businessperson. Although businesspeople often use places like coffee shops at hours that aren't their busiest...

You make a good case, and the incremental cost for unwiring a McDonald's is pretty tiny. They probably already have some sort of data network -- I can't believe they're running their systems off a dial-up, but you never know. (Starbucks has been until the T-Mobile installations.) Add an access point and provision a VLAN (which might mean a new router) and that's most of the cost.

But is that the image Cometa wants? I was under the impression that they want high-toned business outlets: they want brand names that are associated with business. I might be wrong. If their first deal is one of the top franchises you mentioned, that'll prove it.

This is really where their model breaks down, though. If they unwire every McDonald's (which would be foolish since 20 to 30 percent of them are certainly outside core traveler areas) and all of the other franchises you list, even the competing ones, that might get them the numbers, but not the density. Well, McDonald's would, but I just can't see it.

Regarding the issue of hours of usage, I think this Glenn is on the right track here. In fact, I think this is an excellent argument for McDonald's to do something like this: to increase business during otherwise slow periods of the day. When I'm on the road, my meals are usually spoken for with meetings, and in any case, I won't be eating at McDonald's. The problem comes between breakfast and lunch, and again between lunch and dinner. If I have an hour of down time before meetings, it would be great to stop somewhere and get some work done. But tracking down a Starbucks in an unfamiliar city can be difficult. If I knew that any McDonald's with the McBiz logo had all the features listed above, I wouldn't hesitate to stop there. McDonald's would get my money for a drink and a small snack, as well as share the revenue from my wireless Internet connection. Moreover, I'm helping them to use their facilities more efficiently.

Are McDonald's and Cometa the right partners? I don't know. McDonald's could choose to do this with anyone, I suppose. T-Mobile would seem like a good choice. Cometa is just one potential partner -- albeit a potential partner trying to build out a network of 20,000 access points.

As to the density issue, I think that's more specific to Cometa and their stated coverage targets. As noted, McDonald's could do this with other wireless partners, or even on their own, focusing on those restaurants best positoned for business travelers (Glenn suggests 20-30 percent of the total; this could be correct).

I know Glenn has more thoughts (and certainly a more knowledgeable perspective) on this, so I'll post it and let him take the next swing.

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