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McDonald’s franchisees most pessimistic in a decade

McDonald's franchisees' sales outlook for the next six months is the darkest it's been in more than a decade, according to a new Janney Capital Markets report.

Following the report, McDonald's shares fell 1.5 percent in trade on Wednesday. (Click here to track the company's stock.)


Source: McDonald's | Facebook

When asked to rate their forecast from 1 (poor) to 5 (excellent), franchisees surveyed reported an average of 1.84. This marks the lowest level since the firm began polling franchisees in 2003.

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"It is striking to hear the franchisees so concerned about the direction of the business," said Mark Kalinowski, restaurant analyst at Janney, in a phone interview. "I think that gets to a lot of challenges that McDonald's is facing."

Franchisees cited a range of issues including a complex menu, the economy and marketing missteps. On the company's last earnings call, McDonald's CEO Don Thompson admitted the chain had been "chasing a few too many limited-time offers" and said the company is working to make sure it's not "implementing too many products."

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Despite hopes that the U.S. consumer would show signs of being on a "better footing" by now, Kalinowski said the fast food giant's still operating in a challenged environment.

Based on the survey's results, Janney lowered its U.S. same-store sales forecast to a 2.6 percent drop for June and a 1.8 percent decrease for July.

It's also dropped its full value estimate for McDonald's to $96 from $98.

—By CNBC's Katie Little

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