Case Study : Mcdonald 's Franchise

806 Words May 4th, 2016 4 Pages
McDonald’s Franchise McDonald’s Corporation is the largest, and perhaps most recognizable, chain of hamburgers fast food restaurants in the world. More than 58 million customers are served at McDonald’s restaurants each day, in more than 100 countries. Approximately 85% of the restaurants are owned and operated independently through franchise agreements and joint ventures. Franchise owners must pay franchise and marketing fees, as well as monthly rent to the parent corporation. McDonald’s is always seeking qualified individuals to become franchisees. The total cost varies from restaurant to restaurant. The minimum amount for a down payment will vary. Generally McDonald’s requires a minimum of $500,000 of non-borrowed person resources to consider someone for a franchise. The $500,000 indicate to McDonald’s that individuals knows how to manage their money. Financial resource may be cash on hand; securities; bonds; and debentures; vested profit sharing (net of taxes), and business or real estate equity; exclusive of someone personal residence. Startup costs, which include construction and equipment expenses, average between $955,708 and $2.3 million. The total is determined by geography and size of the restaurant, as well as by the selection of kitchen, equipment, signage, style of décor, and landscaping. It is required that the buyer pay a minimum of 25% cash as a down payment toward the purchase of a restaurant. The remaining balance of the purchase price may be…

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