Mcdonald's Case Study Essay

Franchising is simply a method for expanding a business and distributing goods and distributing goods and services through a licensing relationship. In franchising, franchisors not only specify the products and services that will be offered by the franchisees, but also provide them with an operating system, brand and support. (Franchise.org, 2016)

Franchising is defined as “a commercial agreement between a party that owns a trade name or trademark (the franchisor) and party that sells or distributes goods or services using that trade name or trademark (the franchisee) (Kubasek et al., 2015, p. 431). There are key advantages for choosing a franchise when starting a new business. First, there is many times instant brand awareness that is identifiable by potential customers, which you as a new owner do not have to concentrate on building. Secondly, on-going marketing of your business is backed by the power of the established brand, and could be as simple as contributing a fee to a advertising fund that is driven by the franchisor. Thirdly, the Return on Investment (ROI) will most likely be faster as the customers are “ready-made” and eager to buy your product or service. Fourthly, the franchise model provides a built-in support model, both from the franchisor and from other franchisees throughout the region and nation. Lastly, the franchise will provide consistent and extensive training in every aspect of the business (Goldberg, 2015).

Franchising: it is a relationship in which the owner of the business allocates to independent individuals the right to market and distribute the goods or service, and by using the business’s name for a fixed period of time. The International Franchise Association defines franchising as a "continuing relationship in which the franchisor provides a licensed privilege to do business, plus assistance in organising training, merchandising and management in return for a consideration from the

Prior to launching a franchise, the franchisor has developed and established attractive and meaningful branding for the operation, and as the network of franchisees expands the national recognition of this brand grows. When a franchisee enters into a mature franchisee network, they will benefit from the national name recognition the brand has built when it comes to their own marketing initiatives, while even new launch franchises have invested in professionally designed and intellectually protected branding to

Not having to answer to a corporate boss is the dream of many and the flexibility that owning a business franchise creates provides this option. Success is not reached by simply creating a business, however. The level of success is measured by the size and efficiency of the business. Business growth is the driving force of the economy. The additional jobs and revenues created when a business expands allow the economy to grow at exponential rates. One of the fastest and most popular ways to increase the size of a business is to turn it into a franchise, which can then be purchased by individuals. Franchising provides opportunities that are beneficial to both the parent company and the purchaser. The company that owns the business can expand

The franchisor markets a unique business system under a trade name and franchising adopt the standardise procedures to run their own business.

Franchisor give all the right to the other members of franchise that they can sell or supply there product but they need to follow some rules and regulations. For example mc Donald like the packaging of burgers will be same no one can put any change in it.

3a.Franchising is a marketing system revolving around a two-party agreement, whereby the franchisee conducts business according to the terms specified by the franchisor

According to the literature examined franchisees, it is tend to be represented by larger local firms that are offering a wider range of services and usually are able to generate more revenue than their competitors. Thus, franchisors are enhancing revenue generation process by adding additional value through standartised systems of marketing, training, learning branding knowledge and technology sharing (Benjamin, Chinloy & Winkler, 2007; add more ref). There were a lot of studies conducted in order to justify reasons of franchise business model existence and its success (Anderson & Fok, 1998; add more ref).

Franchising as it is generally known today is a form of marketing or distribution in which a parent company customarily grants an individual or a relatively small company the right, or privilege, to do business in a described manner over a certain period of time in a specified place. The parent company is termed the franchisor; the receiver of the privilege is called the franchisee; and the

The franchisees also will have to run their businesses themselves. This will reduce the management demands placed on the franchisor. The best franchisees will be highly motivated and have local expertise. This is the one of the best elements of the franchise system where the franchisees will have to personally spend their money, time and

McDonald’s is a well-known staple and contender within the fast food industry. It is one of the largest fast food chains throughout the world today. After Mac and Dick McDonald opened their first restaurant in 1954, caught the attention of Ray Kroc, which started the evolution of McDonald’s restaurants today. At the time, Kroc was selling multi-mixers used for mixing multiple shakes at once. After seeing the business that Mac and Dick McDonald had built, he immediately saw the potential for expansion and negotiated to become the brothers’ franchising agent. Kroc opened his first store in 1955 in suburban Chicago and in 1961, bought the company for $2.7 million. In 1985, when McDonald’s launched its initial public stock offering, Kroc’s

“A continuing relationship in which a franchisor provides a licensed privilege to the franchisee to do business and offers assistance in organizing, training, merchandising, marketing and managing in return for a monetary consideration. Franchising is a form of business by which the owner (franchisor) of a product, service or method obtains distribution through affiliated dealers” (entrepreneur, 2015)

Franchising has been long known to be an exciting venture for any person who wishes to buy into the idea (Timmons and Spinelli, 2008). There is an assortment of elements that combine to ensure a correct franchise opportunity is formed, which set the guidelines to ensure a franchisee is not being induced into an unfair agreement. No successful franchise would be established without following the four cornerstones of franchising (Webber, 2012 pg. 13), this includes: the license itself, the assurance that the franchisor has rightful ownership to the company, the franchise agreement itself and the structure of how the fees will be set out (Webber, 2012).

McDonald’s, as we know it today was founded and incorporated by Ray Kroc in 1955. Mr. Kroc bought the rights from the originators brothers Maurice (Dick) and Mac McDonald. Today the McDonald 's Corporation is the leading global foodservice retailer with more than 35,000 local restaurants serving nearly 70 million people in more than 100 countries each day. - Getting to Know Us. Retrieved December 15th, 2014