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McDonald By Name, McDonalds by Nature

McDonald's Franchise Opportunity_1An article in yesterday's Independent newspaper focused on how the fast food giant is weathering the recession. Chatting to CEO Jill McDonald (who took over from Steve Easterbrook in 2006, her name is serendipitous). We're sharing some of the Independent's findings  on how the Golden Arches are not only weathering the downturn, but thriving in it.

McD's have:

  • Experienced positive growth for the last 22 consecutive quarters
  • Including more than 5% last month alone
  • 1,196 UK outlets
  • Serve 2.5 million people per day
  • Experienced an increase of 90 million visits on last year

A McDonalds Franchise

However the franchise route is narrower with other companies, and requires a large cash investment

In 2006, only 40% of McDonalds were franchise-run, compared to 65% today.

McDonalds open two to three franchised restaurants every year.

McDonald's Franchise Opportunity_3

As Jill McDonald said in the article "We are inundated and would have 5,000 applicants for one position - it is that sort of scale of interest.”

What McDonalds look for in franchisees is similar to other food and restaurant franchises, although with a larger cash injection.

  • Strong people management skills
  • Experience running a kitchen
  • Understanding of finance

The total cost of opening a McDonalds franchise runs into hundreds of thousands of pounds.

  • One off fee - £30,000
  • Training courses (can last up to a year) - £5000
  • Cost of restaurant (at least 25% must be financed without a loan) £125,000 - £325,000

That's not it though; franchisees must be able to cover costs like monthly rent of machines and service fees.

With such solid growth in the face of growing financial and health crises, the success of McDonalds proves that the right business model can thrive in any environment.
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