Problems Associated With Buying A Franchisee Of Mcdonalds

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Every business involves risks and problems, however most of the problems can be resolved by investigating the root cause of the problems and fixing it. I have been searching about the problems associated with buying a franchisee of McDonalds, and the main problem is arranging the capital to support my business plan. I have researched few private and government loan providers. According to franchise directory, McDonalds provide four different types of franchises in India such as traditional restaurant, satellite locations, STO and STR locations and BFL franchise. Traditional restaurant franchisers are eligible to locate in freestanding building and food courts. Satellite location franchisers can open McDonalds in airports, universities…show more content…
I know that arranging the capital will be big issue, however I have already started searching for options that will be available to me in my home country as mentioned above. Service is the key element of McDonald’s operation. According to Shilpa Kannan (2014), every employee working at McDonalds strived in providing 100% customer satisfaction for every customer in every visit. This included friendly service, along with accuracy of an order taking and anticipants of customer’s demand. Therefore, training is the key to success of McDonalds’ in India. I am also concerned about the training of the new employees, for employees should be properly trained to run an effective business. According to the McDonald’s Indian website, McDonalds’ corporation have a training consultant who trains and monitors newly hired employees at cost of franchisees in India. Additionally, optional courses for training are offered to franchisees and employees for an additional fee. Following are the cost and expenses associated with buying and operating a franchise of McDonald’s in India for the term of agreement of 20 years mentioned in the franchise directory:- Figure 1 Initial Franchise Fee $45,000 Royalty Fee 12.5%+ Advertising Fee Depends on marketing strategies that will be used. Real Estate and Building – 3 months’ rent Base Rent:$450 Signs, Seating, Equipment, and Décor $698,900 Opening Inventory $17,000 Miscellaneous Opening Expenses $51,358 Travel and Living
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