HOW TO OPEN AND HOW MUCH DOES THE MCDONALDS FRANCHISE RESTAURANT
McDonald’s, a fast-food restaurant serving fast food, is located around the world. In practice, one person cannot build their own McDonald’s restaurant, but the company is constantly looking for places for new restaurants. An entrepreneur can only use the franchise and become the operator of the McDonald’s restaurant in the fast food market.
FOR WHOM IS THIS FRANCHISE DESIGNED?
McDonald’s in South Korea.
According to McDonald’s policy, the franchise is granted only to individuals who already operate fully working restaurant chains, and not to new facilities. Because the launch of new facilities is carried out by McDonald’s itself or by experienced franchisees already operating in the franchise system (this is the one who acquires the right to use the brand from the franchisor).
The requirement for entrepreneurs is that the McDonald’s franchisee personally manages his restaurant and does not pursue any other interests that would require constant management and supervision.
Each McDonalds restaurant has a separate franchise agreement for each restaurant, regardless of whether the franchisee works with the brand or not. The contract is usually signed for a fixed period of 20 years.
WHAT DOES FRANCHISE GET?
Transparent fast food restaurant.
Having decided to sign a franchise agreement with McDonald’s restaurant, the franchisee gets the right to work under the famous McDonald’s brand and use the premises intended for this, in which the restaurant is located. He has access to training, training materials, regular consultations and assistance in the work of restaurants and in the field of PR-activity. He can use the help of McDonald’s service companies and service providers, as well as reliable sources of supply, which are subject to ongoing quality control. The franchisee participates in national programs and marketing campaigns and enjoys the support of a specialized marketing agency.
In return, the franchisee undertakes:
Use only certain foods and beverages in accordance with established McDonalds recipes.
Application of special production and control procedures and accounting principles.
Use of special equipment, designs, colors, advertising devices, interior items and furniture.
COST OF THE MCDONALDS FRANCHISE MOST
High financial requirements.
Participation in the McDonald’s franchise system is associated with the need to bear certain costs for the entrepreneur. These include an initial payment, which is a one-time expense, and monthly payments that the franchisee incurs throughout the term of the contract with McDonald’s. The franchisee does not share with McDonalds his profits from operating his restaurant.
The entrepreneur must have:
Own funds in the amount of at least $ 320,000 (depending on the region, the price may be higher).
A lump sum fee of $ 45,000.
The ability to repay monthly payments (royalties) – from 12.5%.
$ 10,000 for training.
The ability to cover the costs of the operation of the restaurant.
Part is allocated for payment of services and the purchase of restaurant equipment, and part is a financial reserve. The initial license fee is 45 thousand. dollars, and a security deposit of 15 thousand. dollars. A deposit is charged to secure McDonald’s future debts. For the purchase of restaurant equipment should be allocated from $ 320,000 to $ 1,000,000. To provide restaurants with food, packaging and facilities, you need to reserve about $ 13,000. Added to this are the costs associated with starting a business and opening a restaurant.
A monthly McDonalds fee is charged for using the restaurant and accounts for a few percent of total sales. The license fee is 5 percent. total sales and marketing revenue is 4.4 percent.
Costs also create an obligation for the franchisee to reinvest in the restaurant he manages when McDonalds decides to implement all kinds of innovations. This entails the need to purchase equipment and machinery, or to change the production system and customer service in a particular franchisee restaurant.
HOW TO BECOME A FRANCHISE?
To open your own McDonalds restaurant, you must become a corporate franchisee. This is possible by submitting an application along with a resume and cover letter. Documents should be sent to the McDonalds office by mail or electronically.
Then there is a meeting with the franchising department and an initial examination of the candidate. If he or she successfully passes it, a meeting occurs with the finance department, which checks the funds available to the candidate.
The next step is a three-day practice at the McDonalds restaurant and an assessment of the candidates. If everything turns out to be in order, he is invited to a meeting with representatives of McDonald’s management, during which a final interview will be held.