McDonalds in Groesbeck: A Closer Look

McDonald’s coming to Groesbeck has stirred up a lot of commentary on social media platforms, but not much of it is informed or factual. Can you tell me what level of involvement the City of Groesbeck and or the Economic Development Corporation (EDC) had in facilitating their investment?

In terms of what role the City and EDC played in McDonald’s coming to Groesbeck- none. McDonald’s Corporate does research on real estate, spending patterns, and demographics to decide where they want to make an investment, and if the right size property is available with highway frontage, in an area that can support their business, they’ll buy and build. In this case, a property owner was willing to make his land available for development, so the first contact for the city was McDonald’s asking for code enforcement and regulation guidance.
We get prospects on a regular basis, but there’s a long journey between prospects and a grand opening, so we don’t really get excited about prospects.

So a private citizen was approached by McDonald’s, made the deal, and sold the land to them, without the city or EDC having a hand in it?

Absolutely right. That’s how business works in a free market economy, that’s how it should work. A lot of times, we get roped in after the fact, after a business decides ‘hey I want to go there’. At the end of the day, businesses go where it makes sense for them to go and where they’re going to have a market and support.

I know you were able to chat with the McDonlad’s representatives after the Council meeting last week and compare your research with theirs for a big-picture view of why they chose Groesbeck. What did you find out?

It should go without saying, but McDonlad’s Corporate doesn’t invest anywhere without doing their research first. I did what I could with the data we have access to, to try and figure out why they would choose Groesbeck as a feasible location.
The Mexia store does a lot of business; if you’ve driven over there during peak hours, it’s typical to see both drive-thru lanes wrapped around the building. They get more foot traffic than some locations in Waco, like Robinson, and Marlin on Hwy 6. A notable portion of that Mexia business actually comes from Groesbeck, so they were able to use that business to validate that they have a sizable audience in Groesbeck. 
When you look at the foot traffic from Limestone Shopping Center, and compare that foot traffic to what’s in Mexia, the Limestone Shopping Center actually gets more foot traffic from more loyal customers, and they tend to have a little bit higher income, which is something that businesses look for when they want to ensure profitability.

Can you tell me what kind of short-term effects and/or long-term impact you anticipate with McDonald’s opening a location in Groesbeck?

On average, McDonald’s is going to spend $1.4 - 2.5 million on their building. The city of Groesbeck gets property tax on that, so that will be a very long-term effect. Keeping that business in Groesbeck means that Groesbeck is going to benefit from that sales tax, which supports local infrastructure and revenue. It is most literally reinvesting back into the city.
On average, McDonald’s is going to employ 30-50 people. Some of those are going to be full-time jobs: general managers, assistant managers, shift managers, and those jobs are going to come with competitive wages, 401k, tuition assistance, healthcare, etc. We’ve also got a bunch of part-time/shiftwork available for teenagers or young adults.
When a national corporation like McDonald’s invests, other brands and companies pay attention, so you get on a radar that you haven’t been on before. When people type into Google Maps, when they pull up their McDonald’s app, it starts to literally put Groesbeck on a different map. That’s the big picture, the economic point of view.
You also have to look at it from a business standpoint; it’s going to shake things up. Competition is competition. Generally speaking, competition makes things a little bit better. When people have choices, they reflect a lot of times, on service and on experiences that they’re having in existing restaurants. Ultimately, it’s going to improve the quality: some of that hurts and some of that’s really good, you just have to kind of see how it shakes out; that’s entrepreneurship.
 

What are some of the biggest misconceptions that you’ve seen/heard since news of McDonald’s coming to Groesbeck broke?

One is that the local government either allows or disallows businesses to open. Businesses open where they can make money. Every brand, every franchise does its research to determine what makes sense for them, and if a particular city fits, they look for property. Sometimes EDCs can step in and win a deal or make a deal better, but it’s impossible for the local government to either make or force a business to open a location. In fact, I would challenge you to ask any business owner that you personally know who made them or allowed them to open a business; they’re probably going to get offended and tell you how much work they did being self-made. They may say an EDC consulted with them or helped them, but it’s never going to be ‘they made us do it,’ or ‘they allowed us to do it,’ or ‘they funded us’. That’s not how that happens.
The second one would be that we as a community, by opinion or survey or personal preference, can select brands or businesses to come to any town. We just can’t. The local government doesn’t do that and couldn’t if we wanted to. Corporations research consumer behavior, so they’re looking at where your foot traffic goes and where you actually spend your dollars, and that’s what determines where businesses go. They’ll look at where they have a workforce, where they’ll have enough housing. They boil it down to business, to numbers.