McDonalds

About McDonald's

"McDonald's is run neither by one man nor by executive committee. Indeed, it is not even a single company. It is a federation of hundreds of independent entrepreneurs - franchisees, suppliers and managers - united by a complex web of partnerships and creativity…a contemporary franchise system flourishing on an unparalleled scale." In 1974, McDonald's opened its first restaurant in the UK. Today, more than 2.5 million people in this country place their trust in McDonald's every day - trusting the Company to provide them with food of a high standard, quick service and value for money.

History of McDonald's
Franchise information
Franchise requirements

History of McDonald's

American businessman Ray Kroc first established McDonald's in 1955. From those early days we have been a franchising company. We have relied on our franchisees to play a major role in the success of the business. Approximately 70% of McDonald's worldwide restaurant businesses are owned and operated by independent businessmen and women, our franchisees. In the UK McDonald's opened its first restaurant, in Woolwich, in 1974. Initially all of our restaurants were owned & managed by the company. However, we started recruiting franchisees in the mid-1980's and opened our first franchise restaurant in 1986. Since that time the number of UK franchisees has steadily grown. Today over 33% of our 1,100+ restaurants are operated by franchisees, and we continue to open around 100 restaurants per year.
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Franchise information

McDonald's is one of only a handful of brands that command instant recognition in virtually every country of the world. McDonald's began with one restaurant in the US in 1955 and today there are more than 26,500 restaurants in over 119 countries, serving around 39 million people every day - making McDonald's by far the largest food service company in the world.

Franchisees are crucial to McDonald's success; they deliver our brand values directly to the customer. Worldwide, over 70 per cent of our restaurants are run by independent entrepreneurs - making us also the world's largest and most successful franchising company. Franchising is not for everyone though - to operate a McDonald's franchise you need the managerial and personal skills necessary to run a business employing 50 or more people and serving half-a-million customers a year. You'll also have to make a personal commitment to run the business, day in, day out, for at least 20 years.

It should come as no surprise, then, that our selection process is rigorous . We look for individuals with a demonstrated ability to lead and manage people, good common business sense, and a track record of success in whatever they are doing. A restaurant background is not necessary, nor is a large amount of capital - although you will be asked to make a personal investment in the business . We franchise only to individuals, not to partner ships, absentee investor s or families. Becoming a McDonald's franchisee is not a license to print money, but the rewards are undoubtedly there for the earning. And with only 30 per cent of restaurants in the UK operated by franchisees, there are still many franchise opportunities available in this country.
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Franchise requirements

As a McDonald's franchisee, you would be expected to make the following commitments:

To divest yourself of any other business interests
To spend approximately 9 unpaid months learning all aspects of running a McDonald's restaurant
To continue the franchise agreement for at least 20 years

We also require the capital you invest in the business to be your own, however this does not necessarily have to be a large amount. Depending on the amount of capital you have available, there are two ways of entering into a franchise agreement: With a Conventional Franchise, we ask you to invest at least 25% of the total purchase price for an existing restaurant or 40% of the total purchase price for a new restaurant. The following are illustrative examples:

New Restaurant

Purchase price Ł300,000
Security deposit Ł10,000
Franchise fee Ł30,000
Maximum borrowings Ł204,000
Unencumbered cash required Ł136,000
Total cost Ł340,000

Existing restaurant

Purchase price Ł300,000
Security deposit Ł10,000
Franchise fee Ł30,000
Maximum borrowings Ł255,000
Unencumbered cash required Ł85,000
Total cost Ł340,000

The Business Facilities Lease (BFL) programme is available if you're right for McDonald's but don't have enough capital to meet the requirements for a Conventional Franchise. Under the BFL, the cash flow of the restaurant is used to raise capital to purchase the franchise under the conventional method at a point within the first three years.

Ongoing Fees:

Monthly Rent - from 5.65% to 18.4% of sales
Monthly Service Fee - currently 5% of sales
Annual Marketing Fee - currently 4.8% of sales

We realize we ask a great deal of our franchisees, but we provide a great deal in return. As a McDonald's franchisee, you will get the benefit of over 40 years food service expertise. We will match your commitment by providing national advertising and promotional support, as well as individual advice and practical support. You will play a crucial role in running the McDonald's business and will have the rights to use McDonald's trademarks, recipes, and business methods. In short, you will become a full member of the McDonald's Team.
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Key Info