Problem #2 is that they oversaturated the market and dissed the franchisees.
Problem #3 is that they're unable to shake their employment stereotype ("Ewww, you work at McDonald's?")
Last but definetly not least their food sucks to the point that you could build a house with their cardboard-like hamburgers. Bring back the heat lamps and styrofoam Big Mac containers!!
Agreed -- back in the day when they had both of those things, the cheese on the Big Mac melted just fine.