McDonalds

13 Pages 3178 Words

ing is the primary source of advertising, along with the addition of limited edition products added to the menu. Examples include Pocahontas and The Lion King. Franchises The McDonald’s Corporation is the largest worldwide franchised food service organisation. In the 1960’s, Ray Kroc franchised restaurants for the low sum of $950, demanding 1.9% of sales. As the success of Kroc and his organisation depended on the prosperity of the franchisees, this mutual interest was a key factor in McDonald’s success. In the USA, 87% of restaurants are owned and operated by franchisees. In the UK, this figure lies at just over 20%, with 119 of the 577 restaurants being franchised. It is McDonald’s’ intention that by the end of this year, franchised restaurants will represent over 30% of the total UK business. McDonald’s charge franchisees a levy on sales. This levy consists of a service fee of 4%, and a rent charge of 7%. Clearly, an increase in the number of franchised restaurants leads to the direct effect of an increase in McDonald’s’ reve...