Case Study: McDonald’s Franchise Case Study

McDonald’s Franchise Case Study
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Abstract
Globalization and modernization have influenced new changes in the food industry, resulting from consumption trends. McDonald’s franchise is one of the ideal examples of an outlet that has adapted to the market changes in offering products that are inconsistent demand among consumers. The purpose of this paper is to analyze the McDonald’s franchise and list its offerings on a global perspective. According to research findings, McDonald’s is a prime example of a franchise. The paper reveals consumer perceptions regarding the expansion and operation of McDonald’s. While the company was not the first franchise business, the chain has grown from a single restaurant to the current expansive company. As organizations and individuals decide to establish a business, one of the options is if or not to purchase a franchise. The paper has comprehensive information regarding the concepts of McDonald’s as one of the prime examples of a franchise.
Keywords: Franchise, business, McDonald’s, and food industry.
McDonald’s Franchise Case Study
Franchising is a business opportunity that involves the owner granting exclusive rights to an individual to facilitate the distribution of a product. As a result, the owner can receive royalty/payment and conformance to the set quality standards. In the United States, franchising began during the 1840s as a combination of franchisee-owned channels and franchisor-operated outlets. Food franchising is one of the lucrative business opportunities in the United States for a steady and consistent source of income. Therefore, an individual can venture into the field for a secure financial future. McDonald’s Franchise network is one of the leading foodservice retailers by revenue, having more than 35,000 outlets on a global perspective.
McDonald’s franchisees utilize marketing savvy, consistent processes, and making relevant changes to address consumer trends within the organization. As a result, the organization has an opportunity to thrive through various market fluctuations. Notably, the franchisees rely on adaptation to market conditions and innovation to maintain overall profitability. According to Towle et al. (2019), McDonald’s began its operations with a simple menu of French fries, milkshakes, and hamburgers before expanding its list because of its changing consumer demands and tastes. McDonald’s has developed effective procedures and processes as a strategy of enhancing a consumer’s desire for the available products. Besides, the franchisees are flexible enough to adapt to the needs of customers and improve its brand quality without any disruption.
Limited funds are significant barriers in business operations, especially for startups. Therefore, franchising is an ideal financial resource multiplier strategy that can allow entrepreneurs to operate a business effectively. The retail service sector is one of the industries that have a close connectedness to a franchising business structure. Towle et al. (2019) argue that McDonald’s is an ideal example of a fast-food franchising venture that has been successful in the market. Currently, the organization has outlets across the world as a pinnacle of the fast-food franchising sector. McDonald’s has grown steadily to its current dominating position in the fast-food industry. Over the years, the management as maintained quality control over its various franchises.
McDonald’s has differentiated itself as a low costs industry in the fast-food industry. The franchisees focus on a narrow scope of customer base and a low- cost strategy of operations. Over the years, the organization has adopted a health option diet to address the needs of all customers. Most McDonald’s outlets have a dual drive-through to increase the overall number of customers and minimize wait time. According to Morell (2020), McDonald’s positions itself at the forefront of the fast-food industry and sets standards in the market. Notably, strategic positioning is the strategy that the company has adopted to have a competitive advantage in the fast-food industry. Just like other fast-food chains, McDonald has various franchises and company-owned stores. The company has a core objective of increasing the overall number of shares in the long-term.
Besides, the company has a strict criterion for its franchisees as liquidity and net worth. The franchisees are responsible for owning the premise, pay salaries, and order for supplies. One of the lures is that the company provides them with a guaranteed moneymaker. Notably, McDonald’s incurs fewer costs on some menus, such as coffee and hamburger. Analysis of McDonald’s franchise reveals that it has a wide variety of terms and conditions that come into play based on contract fees in each of the stores (Morell, 2020). Each of the restaurants has an operator’s...