McDonald’s – Franchise Review

McDonald’s was founded and started franchising in 1955. A man name Ray Kroc, who was a milkshake mixer vendor, came across brothers Dick and Mac McDonald, who were running a small hamburger stand. He saw how quickly customers were being served and suggested the brothers open a chain of restaurants. They did, and Kroc became their business partner. McDonald’s, and the signature golden arches, have since become internationally recognized symbols. mcdvoice

Their signs proclaim “millions served,” and that is not an exaggeration. With over 32,000 locations worldwide, McDonald’s is the leading global fast food franchise.

McDonald’s has always taken pride in the quality and quick preparation of its foods. Popular and well known menu items include the Big Mac, Chicken McNuggets, and the Egg McMuffin. Kids’ meals, called happy meals, are the most popular kids’ meals in the industry. “Every kid wants a happy meal.” Larger McDonald’s locations often have play places, which include slides, tunnels, and occasionally ball pits for visiting children to play in while their parents eat, or for parties.

Ronald McDonald, though never a real person, is the well-known mascot of the McDonald’s franchise. The origin of Ronald McDonald involves Willard Scott, who performed using the moniker “Ronald McDonald, the Hamburger-Happy clown.” This was in 1963, and they were the first ads to appear on television with the character. Ronald McDonald is second only to Santa Claus in terms of recognition. In 2000, the Northeast Division President went on the Today Show and thanked Willard Scott for creating Ronald McDonald.

McDonald’s gives back to the community with the Ronald McDonald House Charity. This charity provides homes to people whose children are hospitalized, but have to travel far from their homes for treatment. These homes are provided at little or no cost to the families, allowing them to be close by to their child during the tough time of long-term hospitalization. The Ronald McDonald House also allows these families access to the best possible treatment options. This charity greatly increased the reputation of the company, and continues to keep these families in homes which are so desperately needed. The Ronald McDonald House Charities also offers scholarships for students who cannot afford college, and grants to other charitable organizations. McDonald’s is very community-minded, and it shows this in how much it helps people and also in the care that is given to its food and to ensuring excellent customer service at each location. Poor customer service is not tolerated and will result in immediate termination.

The cost to start a McDonald’s franchise is very high, but the profit margin for each franchise is even higher. The initial fee is $45,000, and the total estimated cost of the franchise is between $1,057,200 and $1,885,000. To qualify, the applicant must have a minimum of $500,000 of non-borrowed money, and must have significant business experience, good management skills, customer service experience, and good credit history. A monthly service fee is based on the franchise’s sales performance, but is generally 4%.

When looking to start any business it is important, particularly considering today’s market, that you look for specific ways to cut minimize or reduce overhead and risk. Any business is going to have risk, but it is important to have a full understanding of the amount of investment, startup cost and “ROI” (Return on Investment).

Most people are not aware that 80% of ALL franchise endeavors fail in the first two to five years leaving large debts looming for years thereafter.