McDonald’s is the best of the best when evaluating the franchise industry. The McDonald’s Franchise has over the past sixty years developed an entire market, defined American Culture, written the book on franchise growth and set the standards for branding. Not bad for a company founded by a guy who sold Dixie Cups for a living.
The McDonald’s franchise has played a key part in virtually every family and child’s life in America since the mid-1950’s. The Brand, with Ronald McDonald’s help, became synonymous with a child’s favorite place to eat. With the advent of the highway system’s growth throughout the United States, the McDonald’s Franchise System grew at unparalleled speeds. Today, the McDonald’s franchise system boasts over 30,000 operating restaurants worldwide. How did a burger chain grow to be a world dominating brand and franchise so quickly?
1. A Great Operating Model. McDonald’s has one of the most sound and operationally solid business platforms in the world regardless of industry. As a franchise system, the McDonald’s operating unit could be leveraged through owner operators at a speed that could not be matched by company owned growth.
2. Collaborative Relationships with Franchisees. McDonald’s has one of the most synergistic working relationships with their franchisees in the franchise industry. Through this mutually beneficial relationship, the McDonald’s franchise system has thrived. The Breakfast Menu, the Fish Sandwich and most of the successful menu items have come from franchise owner’s suggestions.
3. Brand Development. McDonald’s spends over one billion dollars per year on brand development and advertising. This brand development is what has fueled the growth of not only the franchise system, but each of the operating units themselves. McDonald’s brand is rated as one of the top five brands in the world, this has an enormous impact on the success of the restaurants.
4. Financial Management. McDonald’s owes a great deal of their success to a business strategy developed early in the company’s life. By owning the real estate that the franchisee’s operate on, the McDonald’s system became one of the largest land owners in the world in a very short time period. It was this ingenuity that provided the organization with a substantial amount of assets, equity and investment weight which powered the company forward.
5. Vendor Relationships. Ray Kroc was famous for saying that the McDonald’s franchise was built on a “three legged stool”. One being the corporation, two the franchisees and the third being the great vendor relationships. Coca-Cola was the most prominent of the vendors, but each of the supplier partner’s played a critical role in the successful expansion of the McDonald’s Franchise.
For more information on the McDonald’s Franchise and other franchise opportunities, please contact Franchise Marketing Systems – (800) 610-0292.
FMS is a team of expert franchise consulting professionals based in Canada that provides solutions for franchise development, franchise consultation, and expansion of businesses globally.