Question

Buying a McDonald's Franchise

1. How many years has the offering you a franchise been in operation?
2. Does it have a reputation for honesty and fair dealing among the local firms holding the franchise?
3. Has the franchisor shown you any certified figures indicating exact net profits of one or more going firms?
4. Will the firm assist you with…
   • A management training program?
   • An employee training program?
   • A public relation program?
   • Capital?
   • Credit?
   • Merchandising ideas?
5. Will the firm help you find a good location for your new business?
6. How much equity capital will you need to purchase the franchise and operate it until your income equals your expenses?
7. What competition already exists in your territory for the product or service you contemplate selling?
8. Are you ready to spend much or all of the remainder of your business life with this franchisor, offering its products or services to the public?

Answer 1

McDonalds has been in business since 1955. It is one of the most reputable and honest firms to do business with and has a good worldwide presence for franchisors to find it lucrative. McDonalds maintains record of everything as it is a public company.

The firm assists with training program for employees and owners as well. It does help with public relation program to help employees deal with customers. It does not help with any capital or credit, however it does help with establishment of lender relationships to help secure capital. It has its own marketing strategies whereby the owner gets accustomed to merchandising ideas.

It does not help find a good location for a business, it will provide suggestions but not help directly.

Minimum amount of $750,000 in liquid assets is required to be considered to be an owner. $990,000 to $2,250,000 total investment is required to be an owner.

There is already competition wherein local outlets sell much cheaper goods. In addition multinational corporations are present such as subway, pizza hut, dominoes.

Its quite lucrative to invest to be a franchisee for McDonalds as it is known worldwide to be safe and healthy. It is also coming out with nutritious products which increases choices available to the customer. It is also cheap which increases the target audience. Thus I am willing to spend.