Reputation, as Warren Buffet once said, takes 20 years to build and five minutes to lose – and few companies know this better than fast food chains. In 2019, leading brands like McDonald’s, Burger King, and Taco Bell spent an incredible $5 billion on promotion and advertising.
What Buffet’s aphorism fails to mention, however, is that reputation rules work a little differently for large corporations. While an individual career can be derailed in five minutes by scandal or controversy, a “ruined” reputation is, for a billion dollar company like McDonald’s or Starbucks, survivable.
For Pete’s sake, isn’t the McDonald’s of 2022 – the one that recently reported $23 billion in annual revenue – the same McDonald’s that almost admitted in 2012 that it was selling its customers hamburgers” pink slime”? Far from being the panacea that it might seem to be, reputation is, for the biggest fast food chains, only one annual expense among others.
So here’s a look at nine fast-food chains whose reputations are damaged, sullied or lost. Did it really affect the business?
For more fast food news, see 8 worst fast food burgers to avoid right now.
Starbucks recently came under fire for raising prices on popular menu items. The price hikes were seen as evidence of “corporate greed”, following Starbucks’ announcement of 31% profit growth in the last quarter.
Price gouging aside, the coffee chain has also come under fire for its handling of unionization votes at several of its stores in Buffalo, NY (an effort that has since spread to 54 other Starbucks locations in 19 states). According to employees at the Buffalo store, Starbucks attempted to influence the outcome of union votes through a number of underhanded tactics, including employee intimidation, vote rigging and store closures.
Chick-fil-A is the darling of the fast food industry. For the past seven years, the chain has topped the U.S. Customer Satisfaction Index, topping the industry average last year by a full five points, and in 2020 it was the third largest chain in the United States. United States in system-wide sales, grossing over $12 billion. .
At the same time, the company’s reputation has been and continues to be damaged by its association with the anti-LGBTQ cause. The channel first made headlines in 2012, thanks to news of more than $5 million in donations to groups opposed to same-sex marriage. Nearly a decade later, the issue has arisen again, with the Chick-fil-A founder linked to the National Christian Charitable Foundation, a group that has worked to undermine the Equality Act.
Although Chipotle is a success in terms of sales (the company reported revenue of $2 billion in its last quarter), its reputation has been marred over the past decade by recurring security issues. food.
Flying in the face of its “Food with Integrity” slogan, the chain suffered a series of foodborne illness outbreaks caused by Norovirus, Salmonella and E. coli, which sickened more than 1,100 people between 2015 and 2018. Chipotle’s negligent attitude toward maintaining health was serious enough to warrant criminal charges – the Justice Department charged Chipotle with violating federal law by adulterating food.
With perhaps one of the worst reputations for food safety, Jack in the Box has been at the center of a massive outbreak of E. Coli in 1993. Contaminated patties at Jack in the Box restaurants in Washington, Idaho, Nevada and California killed four customers and hospitalized 171.
Either way, Jack in the Box still has a name in the restaurant industry, reporting its highest profits in 27 years last February.
Perpetual runner-up Burger King was ranked America’s least favorite fast food chain of 2020, following a Twitter customer sentiment study. It’s a brand that kind of got lost (and lost sales) and built a reputation as a business as well.
Burger King was mocked in late 2021 for jumping on the “celebrity dining” trend, and its attempt to position itself as an LGBTQ ally and opponent of Chick-fil-A was met with skepticism (Burger King having, himself- even, a poor record on LGBTQ rights).
According to the numbers, Subway is doing very well. The chain is the eighth-largest in the United States by sales and recorded its best sales in eight years last August, following a menu overhaul. In the court of public opinion, however, it’s a different story.
The sandwich chain has been drifting for a few years now, following the death of its founder, Fred DeLuca, in 2015. Lack of original leadership resulted in falling standards, with Subway losing five percentage points in its l year on the US client. Satisfaction index. Not to mention the recent scandal involving its tuna, the chain has also been regularly criticized for its treatment of franchisees.
BurgerIM’s reputation took a turn for the worse in 2019 when it emerged that the burger chain was, more or less, a Ponzi scheme. The “gourmet burger” business grew rapidly in the late 2010s, generating buzz with the opening of 200 stores in just three years, then onboarding an additional 1,200 franchisees at $50,000 each.
When the franchisees realized they had been sold a bill of goods, they sued en masse, with BurgerIM eventually capitulating in early 2021, paying off the contracts for “pence on the dollar.” The chain is now under new ownership, but some of its locations have gone rogue and rebranded with different names.
The beloved West Coast brand is one of the most successful in the fast food industry, ranking among the top thirty-five brands by revenue in 2021 (an incredible feat, being given that the entire In-N-Out system consists of only 361 stores).
And while business is booming, the chain has also faced a backlash over the past year, following its refusal to adhere to Covid safety policies in its home state of California. In-N-Out restaurants in San Francisco and Contra County were temporarily closed in late 2021, after refusing to comply with vaccination proof requirements