Monday, September 29, 2008

Scariest financial news of the day

Yeah, yeah, Wachovia's a goner. No real shocker there.

This, on the other hand...

AdAge reports the banking crisis is threatening to take a rather surprising hostage: McDonald's big-budget coffee rollout. Tightening credit conditions, have prompted Bank of America to halt loans to McDonald's franchisees. They need the capital to frantically build coffee bars in the chain's 14,000 locations for what was planned to And although it won't derail the launch altogether, it is likely to delay it nearly into summer -- hardly optimal timing for a hot-beverage introduction. It also could force the company to postpone a huge marketing push it's been planning to support the java drive, as the company generally waits until 60% of its stores have been outfitted to undertake a national ad push. The fast feeder maintains that everything is on track. According to an internal memo from McDonald's executive Cindy Fuller, Bank of America's franchisee-loan program, known as "Eagle," had reached funding limits faster than expected. She warned that market volatility was affecting the bank's ability to "fund additional growth."

McDonald's has been killing it lately. Just monster same-store-sales numbers. Plus, it's McDonald's! Yet BofA isn't able to fund new coffee bars for their franchisees. Not at all good.


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