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Macs At The Louvre

October 7, 2009

Macs At The Louvre

IBD: 7 Oct. 2009

Commerce: Is it just us, or does McDonald’s opening at the Louvre sound … just wrong? Nothing against the fast food giant. But in the land of cordon bleu, where are the French entrepreneurs to sell there instead?

Food snobs, of course, will exclaim “quelle horreur!” at the thought of the odor of fries wafting through the high temple of French culture, one of the world’s greatest art museums.

The thought of a Mona Lisa Extra Value Meal, as one satirical Web site put it, would make anyone shudder.

Fortunately, it won’t be like that. McDonald’s will open its 1,142nd outlet in a private underground mall called Carrousel du Louvre abutting the entry to the museum.

Far from being out of place, it will blend right in with the Swatch, Esprit, Sephora, Swarovski, Bodum, Apple and Virgin Megastore outlets, few of which are French names: only L’Occitane en Provence and Lalique stand out as French.

But the awarding of the restaurant site to McDonald’s and not to a French name underlines that there aren’t enough French competitors out there who could have filled the lucrative spot.

France still lacks entrepreneurs (a French word) and enough viable small companies that can eventually become big ones.

Only two or three million French citizens are entrepreneurs, something that baffles French authorities, who have told IBD over the years that they do try to encourage entrepreneurship.

The cost of setting up a business is lower and there are new tax write-offs, they say.

But they still don’t quite get it. They set up up agencies to encourage entrepreneurship, instead of sharply cutting taxes and regulations, which would do the job faster.

“The average entrepreneur is pulled down because of social premiums, financial risks, dearth of capital and market fluctuations,” wrote Scott Scheler in a study for Gaebler Enterprises.

This isn’t to say they aren’t trying (the tax-cutting trend is starting to take off across Europe), but the McDonald’s award ought to be an eye-opener. Sadly for France, McDonald’s’ positioning at the Louvre represents a long-term trend. So changing the entrenched culture is vital: “In France, a self-made man is viewed as a sort of scoundrel or gangster,” Francis Holder, the founder and CEO of Holder Group, which supplies McDonald’s, told BusinessWeek.

Disincentives to entrepreneurship began after 1960 and got really bad after 1992. High taxes, 35-hour-workweeks, unionization, and tiny-but-oppressive laws, such as those forbidding citizens from working out of their garages, all did damage.

If one can’t have one’s own, one adopts. The French have actually done much to make what they call “McDo’s” their own company.

The restaurant’s menu, with mozzarella salads, mustard burgers and fig yoghurt, is adapted to French tastes. The company’s French Web site shows that 75% of its food is locally grown, and 282 local franchisees operate 1,132 of its restaurants.

A Wall Street Journal report about McDonald’s popularity found that a U.S. concept — friendly customer service — was the main reason. So much for French waiters. The positioning of McDonald’s at France’s best-known museum wasn’t so much to succor tourists as it was to please the French, who fill the restaurants in France.

France is into McDonald’s. It’s now the global giant’s sixth largest market after the U.S., posting 11.2% growth in 2007 for 450 million meals. That so many French go there suggests something’s missing from France’s renowned culinary scene.

The Louvre will survive McDonald’s. But the whole thing should be a wake-up call. McDonald’s got the cherished spot because it didn’t have any suitable French competitors.

The French are perfectly capable of competing with McDonald’s on food. But not on something out there that’s more important than food — France’s lousy business climate for startups.

A better one will encourage more companies and more innovation. But until government regulation is slashed, the result is that McDonald’s will be king in the land of cordon bleu.

Frankly, we’d like to see France’s answer to McDonald’s. But the state can’t create it. Only French entrepreneurs can. France needs to do more to encourage them. Royale avec fromage, anyone?

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