MacDonald's Success and Failure

2. About Mcdonald’s
 Mcdonald’s serve around 68 million customers daily in
around 119 countries across 36,538 outlets.
 World’s largest fast food chain with revenues of over 20
billion dollars.
 It is world second largest employers wherein one in every
seven americans has at some point worked at a Mcdonald’s.
 It has increased shareholder dividend for over 25 years
making it S&P 500 Dividend Aristocrats.
 Mcdonalds’s has become symbol of globalization sometimes
referred to as Mcdonaldization of society with parameters such
as Big Mac Index.

3. ORIGIN OF McDonald's
 McDonald’s was started as a drive –in restaurant by two brothers, Richard
and Maurice McDonalds in California in 1937.
 The business which was generating 200,000 per annum attracted teenagers,
young adults & young working families looking for cheap meal.
 After gaining experience the brother decided to reinvent the business by
introducing self service and introducing assembly line style layout in the
kitchen called as Speedy Service.
 In the year 1953 the brothers decided to franchising their system beginning
with a restaurant in Arizona operated by Neil fox.

4. Ray Kroc
• Left high school to join the World War One Red Cross Ambulance Corps
• In 1939, he became the exclusive distributor of the Multimixer (a milkshake
mixing machine).
• Visited the McDonald brothers in 1954 which led to him becoming their
franchise agent.
• In April 1955, first restaurant for McDonald’s System, Inc., was opened in Des
Plaines, Illinois.
• McDonald’s acquired the rights to the brother’s company in 1961 for $2.7
million.

6. MCDONALDS IN INDIA
 McDonalds Opened Its Door In India In October 1996. They Have
Restaurants In The Metro Cities Of India Now.
 McDonalds In In India Is A 50-50 Joint Venture Partnership Between
McDonalds Corporation [Usa] And Two Indian Businessman. Amit
Jatia’s Company Hardcastle Restaurant Pvt. Ltd. Owns And Operate
McDonald's Restaurant In Western India. While Connaught Plaza
Restaurant Pvt. Ltd. Headed By Vikram Bakshi Owns And Operates The
Northern Operations.

7. REASON FOR SUCCESS OF GLOBAL
FRANCHISE MODEL
 Kroc has been credited with making a number of innovative changes in the food-
service franchise model. Chief among them was the sale of only single-store
franchises instead of selling larger, territorial franchises which was common in the
industry at the time.
 Kroc recognized that the sale of exclusive licenses for large markets was the quickest
way for a franchisor to make money, but he also saw in the practice a loss in the
franchisor's ability to exert control over the course and direction of a chain's
development.
 Above all else, and in keeping with contractual obligations with the McDonald
brothers, Kroc wanted uniformity in service and quality among all of the McDonald's
locations. Without the ability to influence franchisees, Kroc knew that it would be
difficult to achieve that goal.
 By granting a franchisee the right to only one store location at a time, Kroc retained
for the franchise some measure of control over the franchisee (or at least those
desiring to someday own the rights to another store.

8. BUSINESS MODEL
 The company currently owns all the land, which is valued at an
estimated $16 to $18 billion, on which its restaurants are situated.
 The company earns a significant portion of its revenue from rental
payments from franchisees. These rent payments rose 26 percent
between 2010 and 2015, accounting for one-fifth of the company's
total revenue at the end of the period.
 In recent times, there have been calls to spin off the company's US
holdings into a potential real estate investment trust, but the company
announced at its investor conference on November 10, 2015, that this
would not happen. The CEO, Steve Easterbrook discussed that
pursuing the REIT option would pose too large a risk to the
company's business model.

9. TYPES OF RESTAURANTS
McDrive
In some countries, "McDrive" locations near highways offer no
counter service or seating. In contrast, locations in high-density city
neighborhoods often omit drive-through service. There are also a few
locations, located mostly in downtown districts, that offer a "Walk-
Thru" service in place of Drive-Thru.
McCafé
McCafé is a café-style accompaniment to McDonald's restaurants
and is a concept created by McDonald's Australia (also known, and
marketed, as "Macca's" in Australia), starting with Melbourne in
1993. As of 2016, most McDonald's in Australia have McCafés
located within the existing McDonald's restaurant. In Tasmania, there
are McCafés in every restaurant, with the rest of the states quickly
following suit.

10. CURRENT INITIATIVE'S
 Refranchising Restaurants
 Technology Initiatives
 New Launches
 Positive Industry