Anyone who’s seen The Founder, the biopic of Ray Kroc, the creator of the McDonald’s fast food empire, knows that the economics of fast food restaurants are far more complicated than we might first assume.
For instance: The larger company (at a recent stock price of $258 per share is worth $186 billion) makes the majority of its money from the franchisees who open individual locations and pay a hefty franchise fee each year. On top of that cost, the company also owns the land those restaurants sit on, so they get to charge a lease fee as well that gets added to the bottom line.
All of that context may help to inform thepostthat creator Mike Haracz (@chefmikeharacz) made looking at some restaurants’ decision to begincharging for drink refills. This change is outraging loyal diners who are used to free beverage refills after decades of receiving that friendly bit of customer service.
Haracz, a former corporate chef for the company, begins by breaking down the gradual shutting off of the soda spigot.
“Not only are the drink machines already removed from their lobby, some restaurants are now charging you for free refills,” he said.
Loyal Daily Dot readers and other observers of fast food trends are well aware that McDonald’s locations have already started to remove the refill stations in the dining rooms that allowed customers to refill at will. There’s plenty of speculation and analysis out there about why the company plans to eliminate the machines entirely by 2032, but the company line is it’s to create the most consistent, and clean, experience for customers as possible across all access points (dine-in, drive-thru, delivery, etc).
But why is McDonald’s ditching free refills?
So we were already seeing soda and other beverages becoming less readily available. But by starting to charge for refills—important note: this is a a location-level policy that corporate decisionmakers say they’re staying out of—franchise owners can grab pure profit out of whatever they charge for another fill-up since the biggest business expense on a drink purchase is the plastic cup, not the liquid inside of it.
“The cup costs more than the drink. Let me say that one more time. The cup costs more than the drink. When they got rid of the ($1 beverage) it is not the beverage that cost money. They are making so much money on the beverages. It’s the cup that costs a lot of money. Why? So free refills shouldn’t really cost the company any money because the drink is the cheap part. You already bought the cup. Why not give them the free refill?”
And Haracz says that as those robotic soda machines are used in more restaurant lobbies, so too are customers asking for new cups.
This practice has provoked outrage all over thedigital landscape, with McDonald’s customers happy to share their displeasure with what they are labeling as pure greed by a quintessential American company.
“If they thought they could get away with it they’d charge us extra for napkins, straws, lids, paper bag, wax paper wrapped around sandwich, fry container, salt, ketchup, ice, to sit down…” wrote one commenter on Haracz’s clip.
Another suggested it may not be long before more locations start following the practice of airport McDonald’s (where rent costs can be extremely high) and charging for condiments or extra napkins.
@chefmikeharacz Former #McDonalds corporate chef talks about removing free refills of drinks. #mcdonaldshacks #McDonaldsTikTok #mcdonaldssecrets #mcdonaldsccsing #fastfood #foodtiktok #tiktokfood #foodfestontiktok #FastFoodTikTok #fastfoodlife #mcdonaldschallenge #mcdonaldsdrivethru #fastfoodstories #FYP #drink #drinks #drinktok #drinkup ♬ original sound – Chef Mike Haracz
Another upset McD’s customer noted that things have gotten militaristic at their neighborhood location, writing “My McDonald’s has people guarding the fountains to make sure randos don’t fill their cup or customers get refills.”
The Daily Dot has reached out to Haracz and McDonald’s corporate communications.
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Chad Swiatecki
Chad Swiatecki is a 30-year journalist who relocated to Austin, TX from his home state of Michigan in 2008. He most enjoys covering the intersection of arts, business and local/state politics. He writes regularly for Austin Monitor, and has written for Rolling Stone, Spin, New York Daily News, Texas Monthly, Austin Business Journal, Austin American-Statesman and many other regional and national outlets.
