With respect, I think that's a bit of a narrow view. McDonald's is one of the most successful businesses in the world, and it's a franchise.
RFG suffers from two fundamental issues that McDonald's does not suffer from.
1. The 'strict'-ness of the franchisee recruitment process. McDonald's franchisees aren't just any random people. They are required (for the most part) to hold an MBA, or similar, and have significant business and operational experience. I don't think this standard is upheld by the likes of Gloria Jeans, Donut King, etc.
2. The brand equity of the franchise brands. Donut King is a perfect example of a brand that just does not resonate with consumers at all anymore. A combination of trends towards being healthy and natural as well as a premiumisation in the baked goods space both in IH and OOH consumption is directly leading to the brands like this (and the RFG portfolio is full of them) falling well behind on consumer's expectations.
Think of it this way - people are often proud to say they go to this swanky coffee shop or bakery or whatever. Can you really picture people saying that about Donut King? Not to mention a coffee from one of these swanky places costs exactly the same...
To be honest a lot of investors have been left 'shocked' by RFGs sudden demise, but realistically, the writing was on the wall some time ago. In fact, when I did the bulk of my portfolio research on LT plays in 2016, I did my due diligence on RFG and avoided it on the basis of the above.
As always, DYOR.
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