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About McDonalds

McDonald's Corporation- is the world's largest chain of hamburger fast food restaurants, Serving around 64 million customers daily in 119 countries McDonald's operates over 31,000 restaurants worldwide, Employing more than 1.5 million people. Headquartered in Oak Brook, Illinois, the United States The company began in 1940 by two brothers Richard and Maurice McDonald in San Bernardino, California.

Franchise Idea
Ray Kroc joined the company as a franchise agent in 1955, he purchased the chain from the McDonald brothers and oversaw its worldwide growth
Ray Kroc realised that the key to success was rapid expansion. The best way to achieve this was through offering franchises. Today, over 70 percent of McDonald's restaurants are run on this basis.

In the UK, the first franchised restaurant opened in 1986 - there are now over 1,200 restaurants, employing more than 70,000 people, of which 34 percent are operated by franchisees.

McDonalds Franchise
McDonald's, the franchisor, grants the right to sell McDonald's branded goods to someone wishing to set up their own business, the franchisee. The licence agreement allows McDonald's to insist on manufacturing or operating methods and the quality of the product.

McDonald's owns or leases the site and the restaurant building.


The franchisee buys the fittings, the equipment and the right to operate the franchise for twenty years To ensure uniformity throughout the world, all franchisees must use standardised McDonald's branding, menus, design layouts and administration systems. Cashflow about 150,000 upwards required to take McDonalds franchise The new franchisee is expected to fund a minimum of 25 percent of this from their own funds.

McDonalds India
In India, McDonald's is managed by two Indian entrepreneurs. Amit Jatia, Vice Chairman, Hardcastle Restaurants Pvt. Ltd. operations in West & South India Vikram Bakshi, MD and Joint Venture Partner, Connaught Plaza Restaurants Private Limited, owns and operates McDonald's in North and East India It has a network of over 235 restaurants across the country. McDonald's has developed a menu especially for India with vegetarian selections It was the only restaurant to have separate kitchen for veg and nonveg. All vegetable products are prepared separately, using dedicated equipment and utensils. The corporation's revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants

Advantages to the franchisee


Selling a well established, high quality product Intensive initial training Continuous support Benefit from national marketing carried out by McDonald's (4.5 percent of sales. ) Being their own boss

The Advantages for the franchisor


Considerably faster growth The creation of a truly global brand identity. Economies of scale McDonald's receives a monthly rent, service fee of 5 percent of sales to marketing Cashflow about 150,000 upwards Many ideas for new items on the menu come from the franchisees responding to customer demand

Conclusion
Ray Kroc recognised the need very early on for franchisees that would dedicate themselves to their restaurants. McDonald's will not offer franchises to partnerships, consortia or absentee investors They want people who can give up another job to take on the franchise venture, relying on their franchise as their sole source of income and would therefore be highly motivated and dedicated. The initial capital has to come from the franchisee as a guarantee of their commitment. The selection process is rigorous to ensure that McDonald's only recruits the right people.

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