Franchisee, business, restaurants, marketing, success, brand, suppliers, sales, standards, customers, Ray Kroc, market research, recognises, Football Association, staff.
From extremely modest beginnings, they hit on a winning formula selling a high quality product cheaply and quickly.
However, it was not until Ray Kroc, a Chicago based salesman with a flair for marketing, became involved that the business really started to grow.
There are now more than 29,000 McDonald's Restaurants in over 120 countries.
This case study examines the success of franchising and investigates the special three way relationship that exists between the franchisee, the franchisor and the suppliers.
McDonald's is an example of brand franchising.
Being their own boss in return, the franchisee agrees to operate the restaurant in accordance with McDonald's standards of quality, service, cleanliness and value.
The cooking processes in McDonald's restaurants are broken down into small, repetitive tasks, enabling the staff to become highly efficient and adept in all tasks.
There is no need to develop the product or do expensive market research.
It begins with working in a restaurant, wearing the staff uniform and learning everything from cooking and preparing food to serving customers and cleaning.
It recognises that the success and profitability of McDonald's is inextricably linked to the success of the franchises.
Benefit from national marketing carried out by McDonald's A brand is a name, term, sign, symbol or design, (or a combination of these) which identifies one organisation's products from those of its competitors.
All franchisees benefit from any national marketing and contribute to its cost, currently a fee of 4.5 percent of sales.
As a result of carefully reading this case study, students should be able to:
- define the terms franchisee and franchisor
- explain how brand franchising works
- know that franchising involves a three way relationship between franchisee, franchisor and suppliers
- understand how franchising enabled McDonald's to
- grow quickly
- describe 6 benefits to the franchisee of holding a franchise
- outline the benefits of franchising arrangements to organisations like McDonald's
- show how suppliers also benefit from franchising arrangements
- understand that successful franchising depends on the commitment of franchisees, franchisors and suppliers.