Mcdonald's Case Study

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Introduction Subway is a franchise that has grown tremendously since its modest beginnings in the fast food market. The chain has over “40,000 locations, compared with McDonald 's 35,000. And while McDonald 's is struggling with lagging sales, Subway is plotting an ambitious expansion to 100,000 restaurants by 2030” (Lutz). Subway presents an interesting opportunity for entrepreneurs who want to run their own business as a franchise. Through an examination and analysis of the company’s business model with an analysis of potential risk factors, their financial model and estimations of future projections, and the capacity for an investor’s probable return, one can gain a deeper insight into the opportunity to open a franchise and why…show more content…
In franchising, that liability is the franchisee’s. With company-owned operations, you have the liability for every employee you hire-personal injury, sexual harassment, discrimination, employment law, crime in the workplace. The list goes on and on. Again, with franchising, that employment liability is largely that of the franchisee. The same holds largely true for customer liability-everything from breach of contract to personal injury. To be clear, franchising may not stop someone from suing you, but if you have a well-written contract and a well-written operations manual (allowing you to avoid claims of negligence and inadvertent agency), the liability will likely be limited to the franchisee” (Siebert). Moreover, “franchisees, by their nature, are often "lifers," staying with the company sometimes for generations. Instead of constantly training and retraining and hoping for the best, franchisees develop a depth of knowledge and experience that is virtually impossible to replicate in a company-owned operation at the unit level” (Siebert). A negative aspect of choosing to franchise one’s business is that there is a lesser degree of control. Although franchisees are generally given guidelines and rules about the “franchisor 's operating procedures, the units are owned by entrepreneurs and not the company. The franchisee is ultimately responsible for profits and losses, so he may decide to implement

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