Bidness ETC - Franchisees of McDonald's Not Happy With the Company's Management

The fast food chain's management has yet again left a question mark for the analysts to think about as the franchise owners come up with issues of their own.

McDonald’s news is yet again circulating in the market regarding the fact that now the franchise owners of the fast food company are beginning to have issues with the management, which means that the customers are not the only ones now. The company owns only 10% of the franchises itself while the other 90% are owned by others. The fast food chain has been under a lot of speculation by the employees who carried out a protest rally against the wage plan that was followed by it, as they demanded an increase. This protest was joined in by employees of all the franchises of the firm all around the country.

However, in a recent research done by Janney Capital Markets, it was seen becoming evident that the owners of the franchises located all around the United States seemed to have many issues with the management of McDonald’s Corporation. The survey showed that the people felt that the company is reaching its lowest points in the market that it never touched ever before in the 11 years of foundation. The company received a 1.81 rating from the average people who filled the survey which was taken by the analysts in a very negative way as it showed that the business made by the food chain’s franchisees was more on the poor side than on the average side.

McDonald’s, on the other hand, dismissed these results saying that the sample size used by the survey takers was not enough to actually analyze the business activities of the company. The fast food service firm also explained that around 3,100 franchises are owned by the company and to conduct the survey, only 1% of that was taken into consideration which makes the results quite useless to be considered. The management even said that they have a good relationship with their franchisees and the rumors that declared the opposite were not true.

However, the fact that McDonald’s stock reported low quarterly earnings for the 8th time in January showed that the company is indeed in a difficult financial state, something that cannot be ignored. Even though the firm has been taking massive steps to overcome this struggling time with the retirement of the old CEO and appointment of a new one and with making prominent changes in the menu, no eminent difference has yet been seen in the sales.

The competition that McDonald’s has been facing by Chipotle and Taco Bell has ended up being a tough call for the food chain that was once the most loved fast food restaurant of the customers.

Bidness Etc - Exxon Mobil Trims Capital Expenditure By $4.64 Billion For FY15

Exxon's stocks were trading 1% down during trading hours today.

Exxon Mobil Corporation (NYSE: XOM) reported Wednesday that it will trim its capital expenditure by $4.64 billion for the fiscal year 2015 (FY15), joining other oil giants which are also considering slashing their spending for the current year.

However, the company intends to stick with its initial product target, which was made when crude was worth more than $100 per barrel, believing that the demand for crude will continue to rise throughout the year.

The oil giant said it will cut its capital spending 12% to $34 billion for FY15, compared to earlier estimates of $38.5 billion.

Exxon's stocks were trading 1% down during trading hours today.

WSJ reported that more than two dozens of independent oil producers have decided to slash its capital expenditure for the current fiscal year by almost $24 million, down from last year’s spending. BP Plc trimmed its spending for FY15 by 13% YoY in February.

Although, Exxon CEO Rex Tiller said that the company will not change its long-term approach to capital allocation, average capital expenditures are likely to be less than $34 billion for FY16 and FY17.

Following years of high spending on massive projects worldwide, Exxon has decided to reduce its capital spending. When crude was trading more than $100 per barrel, oil companies were striving to drill more rigs and enhance their profitability, which resulted in huge development expenses.

In past few months, oil has rallied mostly due to slashing of capital expenditure by oil producing companies, which could aid to bring the oil prices back to its initial level. In mid-February, Brent surpassed $60 for the first time in 2015

The Texas-based oil company said that commodity prices had driven its business strategy, as it plans to raise production level by 2% YoY for FY15. It will further upgrade its new project in Indonesia, Canada, and Angola in FY15. For FY 16 and FY17, it had planned to upsurge development of projects in United Arab Emirates, Russia, and Australia.

Recently in April, the company has been down on its ratings though as the company has lodged a case at the Stockholm arbitrage court against Russia due to the reason of tax dispute because of the excess of its ongoing project in Russia. as notified by the spokeswoman for Russia’s Energy Ministry. The details of this project however weren't disclosed to the media thought through press release. The company itself believes that they have overpaid profit taxes on its oil and gas project Sakhalin-1,. In this the company itself owns a stake of 30% and is seeking reimbursement of their part in this project.