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Franchising in McDonald's

Grade 10 Business Presentation

Tarun Kalikivaya

on 16 July 2014

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Transcript of Franchising in McDonald's

Franchising in

Mcdonald's Profile
McDonald's is the world's most popular restaurant by far.
The variety of delicious foods it produces attracts multiple customers on a daily basis.
About the Franchise
McDonald's is a fast food industry.
They are commonly known by their motto:
I'm Lovin' It
This motto was actually not an orginal.
They bought it from Justin Timberlake.
Type of Business
McDonald's is fast-food industry. It sells many different products.
It is widely known for its burgers, fries, and recently coffees, muffins and other café related foods.
Burgers, sandwiches, and wraps.
Shakes, soft drinks, and juices
Ice-cream and McFlurries
Fries, Nuggets, and salads.
Tarun Kalikivaya and Mishil Desai

BB1 2O1-01
November 7, 2013
Growth and Sales
McDonald's is a fast-growing and ever changing business that started out California.
Arguably, it is the most successful fast food industry and possibly the best business.
Franchise Units
There are currently 1 400 units in Canada.
They employ more than 80 000 Canadians.
Internationally, McDonald's has over 33 000 units and employs 1.7 million people.
Length of Time
McDonald's has been in business for 73 years.
The business started in San Bernadino, California on May 15th, 1940.
Growth and Sales
Buying and Running a Franchise
Franchise Fee
An initial down payment of 40% of total cost when purchasing a new restaurant
25% when purchasing an existing restaurant
Ongoing Royalties
Joint Venture
$14.8 billion by December 31, 2012.
Advertising Costs:
2012: 787.5 million dollars
2011: 768.6 million dollars
2010: 687 million dollars
Ongoing Support
Training is the most continuous and advantageous support provided from McDonald's.
Training Procedures
Convenient to franchisees
Supplemented by a number of residential courses at training centres in Ireland and the UK.
Critical Areas to Success
Team building.
Handling customer enquiries
First aid.
People skills.
Business management.
The Rap Up
McDonald's is a powerful franchise. It has become etched into the minds of millions because of their successful marketing.
Service fee
: a monthly fee based upon the restaurant's sales performance (currently a service fee of 4.0% of monthly gross sales).
: a monthly base rent and/or percentage rent that is a percentage of monthly gross sales.
Start-up Costs
● A minimum start-up capital of $300,000 of non-borrowed personal resources is required.
Terms and Years of Franchise Agreement
Each term is about 20 years.
Only one term.

Length of Training
About six months of training:
3 months of cooking, preparing food, serving customers, and cleaning.
Next 3 months of junior management training and senior management training .
Being boss.
Selling well established, high quality product.
Intensive/extensive initial training.
Continuous support.
National marketing of brand name.
Full transcript