This FAQ was designed by members of the BurgerOff community to provide in-depth responses to many of the standard questions that community members receive.

It is a work in progress and will be continually added to and updated as new questions are asked and information becomes available.

Questions

Q1 Where exactly is Tecoma and is it a town / village / suburb or what?

Q2 So, there’s a highway right through it, a mainline metlink rail station to Melbourne… It’s not exactly a peaceful place is it?

Q3  Okay , so if Tecoma is such a quiet place why do McDonald’s think they’ll have 30,000 people in their 5km catchment area / why do they want to build in the Dandenongs / why do they want this specific location?

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Q1

Where exactly is Tecoma and is it a town / village / suburb or what?

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Tecoma is a residential township, commonly known as a village, on the lower slopes of the southern face of the Dandenongs main ridge.  It’s position, with the main road following a ridge line, the body of the village on slopes to either side, and extensive remnant native vegetation mean it is very effectively hidden from view.

Geographically Tecoma is approximately 35km east of Melbourne, almost at the end of the Burwood Highway, and is nestled between the nearby towns of Belgrave and Upwey.  It is within the growing metropolitan boundary, as are the other towns within the Dandenong Ranges and towns as far from Melbourne as Warburton.

Some may term these towns and villages ‘suburbs’ of Melbourne because they are within commuting distance of Melbourne, generally due to their location along the main transport links.

Technically, Tecoma and Belgrave are considered low growth and outside the urban growth fringe, being surrounded by green wedge areas on all sides but the Burwood Highway corridor.  The area is zoned as Low Density Residential with blocks now having a subdivision control of 4000m2 and with many overlays, including a Significant Landscape Overlay reflecting the “Extensive vegetation in this area [which] complements the conservation and habitat values of nearby bushland areas”.
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Q2

So, there’s a highway right through it, a mainline metlink rail station to Melbourne… It’s not exactly a peaceful place is it?

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Actually it’s a very peaceful place!

Tecoma is on the lower slopes of the Dandenong Ranges, bordered on the north by Sherbrooke Forest and on the south it extends into Birdsland Reserve.  Both are havens for wildlife, renowned amongst birdwatchers and home to species such as the Superb Lyrebird.  Sherbrooke Forest is also important for the remnant indigenous vegetation and conservation of both the lyrebird populations and species such as the Sherbrooke and Dandenong Amphipods, which were until recently believed to be extinct.

There is one main road through the town and, although this is called the Burwood Highway, the name is very misleading.  It is the main road for accessing the local towns and for passing further into the eastern ranges, but once it reaches the Mt Dandenong Tourist Rd there are only two lanes each way and it passes through residential streets.

From the sweeping corner that forms the junction with Mt Dandenong Tourist Rd, residential driveways come down steep slopes directly onto the highway, which winds along the southern side of the main ridge of the Dandenongs.  Due to the driveway access, side roads, exposed position, winding nature, steep slope to one side and sheer drop off on the other, this section of the Burwood is known locally as “the Mad Mile”.

Below is the “Mad Mile” during the quiet part of a normal day.  Note the bins perched at the side of the road on the bottom right – avoiding people putting out their bins in the dark the previous night always makes for an interesting drive!”

Just after the Burwood Highway reaches Tecoma, at the Glenfern Rd junction, the “highway” goes down to single lanes.  In fact, the highway itself ends only 1.6km further along the road at the roundabout in Main St, Belgrave.

The mainline metlink train station is also a bit of a misnomer.  Originally the railway was narrow gauge but, following closure due to a landslide, the opportunity was taken to replace it with electrified broad-gauge reopening in 1962.

To this current day the station operates using a single rail line and platform, being the second last station on the Belgrave line.  The station is unmanned and is actually the 4^th least used station in the Melbourne Metropolitan area with an average of only 310 passengers per day.

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Q3

Okay , so if Tecoma is such a quiet place why do McDonald’s think they’ll have 30,000 people in their 5km catchment area / why do they want to build in the Dandenongs / why do they want this specific location?

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Although the reason McDonald’s want to build in the Dandenongs is simple (tourist dollars in a high profile area), the way they come to the decision on a location is quite complex.

McDonald’s use statistical modelling and consultants to help them pin point areas that are likely to cost them the least to purchase and develop, whilst bringing in the largest profit.  They consider traffic patterns, market statistics, competition, costs and future demographic developments and actually select the site for the franchisees.  Occasionally McDonald’s will lease a site that is suitable and then sub-lease it to a franchisee, but in the majority of the cases they purchase and develop the property themselves.

They will also at times consider purchasing property from other real estate developers if the location is suitable and where planning permission for a restaurant has already been granted.  With the Tecoma site, the previous owner Dr Freeman (a paediatrician) allowed McDonald’s to apply for permission to place their restaurant on his site.  As the Yarra Ranges Council voted to refuse the application McDonald’s appealed the decision at VCAT.  After they were sure that they would be able to develop the property they then completed the land purchase on 27 March 2013.

In general, McDonald’s are looking for a site that is 15,240 m2 or more, but will develop smaller sites depending on other factors.  The perfect site for McDonald’s is on a corner which allows them to place signage on two streets; has an intersection with traffic lights; where they can build up to 1,220 m2; where there is parking available / permissible; and where the building height can be 7.1m or more.

The point of these criteria are to ensure that there are no obstacles that make it difficult for customers to reach them and that they are as visible as possible from all directions.  McDonald’s also like to position themselves where people are heading home hungry and where traffic lights may encourage people to wait in the drive-thru queue instead.

The Tecoma site is small, 3,681m2 and subject to a number of easements allowing right of carriage and for the purpose of drainage and sewage.  It is also sloped to the rear with a fall of 8m.  Normally these factors would be considered off-putting to McDonald’s and they would not consider such a site suitable.

However, a letter from McDonald’s Real Estate Manager for Victoria, Tasmania and South Australia, Paul Vallay, sent to Yarra Ranges Council and dated 10 October 2011, gives us some insight in why they proceeded with seeking planning permission.  In this letter Mr Vallay states:

“McDonald’s has been seeking a suitable location in the area for some time now”

Clearly getting a foot hold in the area is very important to McDonald’s – but why?

Now, back to that 30,000 potential customers in a 5km radius which was a statement made by James Currie, proposed Tecoma franchisee, during a meeting with No McDonald’s in the Dandenong Ranges members  Mr Currie said: “There are nearly 30,000 people living within a five kilometre radius of the Tecoma site…so we believe there is a need, I believe there is a need, for McDonald’s in the area and I know obviously there are people against it.”

This number is actually hard to check and if you have a look at the map below you’ll see why.  The map shows the apparent 5km radius around the proposed Tecoma store and also the closest existing stores with their own 5km radius circles.  This map shows that the proposed Tecoma store will in fact encompass residents of Yarra Ranges, Knox, Casey and Cardinia.  Tecoma itself is located in the Yarra Ranges Council area, specifically in the Lyster Ward which is represented by Cllr. Samantha Dunn.

Although it is not that easy for us to verify the numbers McDonald’s have used, in part because they will not give us access to their statistical analysis, we can see from the map however that 4 existing stores overlap the radius of the proposed Tecoma store and in some cases each other.  The stores in Boronia, Ferntree Gully and Rowville already cover the high population, more urbanised, area.  Do we really need another?

Just to put this map in context, here’s an image taken from McDonald’s ‘Find us’ page using the Tecoma postal code of 3160 to find the closest stores.  This map represents very effectively what residents of the Dandenong Ranges and surrounds are fighting against.

 So, the chosen location in Tecoma meets a lot of McDonald’s criteria but, perhaps more attractive to McDonald’s, is the general location on what is effectively a tourist highway.  Tourists into the Dandenong Ranges amount of between 730,000 and 1.1 million annually with these figures expected to increase.  More specifically there are 267,000 plus visitors to Puffing Billy in Belgrave each year and 560,000 plus to Grant’s Picnic Ground – the main route for both of which is through Tecoma and Belgrave.

In affidavits submitted to the Victorian Supreme Court as part of obtaining the injunction against Tecoma residents, McDonald’s Chief Financial Officer Andrew Gregory stated: “It is difficult to accurately project the future income for the Restaurant, but based on stores in other areas, for each day that the Restaurant is not open after the Commencement Date: (a) the estimated loss in sales is approximately $10,000; and (b) the estimated lost cash flow is approximately $3,000 – $4,000.”

Based on a catchment of 30,000 residents the proposed Tecoma McDonald’s could be taking in $3.65m per year, with a net profit of between $1.09m and $1.46m.  For each of the 30,000 that would mean an average spend of between $36.5 and $48.67 in the proposed Tecoma McDonald’s each year.

If you make a conservative assumption that 10% of the minimum 730,000 visitors to the Dandenong Ranges will also stop at this McDonald’s, that would increase the profitability of the proposed McDonald’s by a factor of 2.43 (10% of 730,000 / 30,000).  In other words, McDonald’s would be looking at a net profit of between $2.6m and $3.5m.

A potential $3.5m that may otherwise have gone to local food businesses.

When you see these numbers it becomes clear why McDonald’s are so determined to establish a foothold in the area and also why they appear blind to the community’s statements that they are unwanted.

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Sources:

http://www.yarraranges.vic.gov.au/files/98b6fb5d-574f-41a1-b752-a05b00af4714/Community_Snapshot_Tecoma.pdf

http://tecomahistory.blogspot.com.au/

Melbourne, let’s talk about the future discussion paper

 

 

 

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