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Franchising: McDonals vs Subway

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Presentation for International Marketing class
Discussing Franchising on the examples of McDonals and Subway in US and Poland
Created by:
Aleksey Narko
Natalia Swierczek

Franchising: McDonals vs Subway

  1. 1. Kurczaki, ziemniaki i kanapki… Natalja Swierczek Aleksey Narko
  2. 2. How it all began… • It began in 1958. • Franchising took it's roots in early 1800's in Munich Germany Hans Best Munich Ale • The first franchise in the US was Singer Sewing Machine in the 1800s.
  3. 3. When it was founded? Who are the Founders? How many locations? Revenue? How many employees?
  4. 4. Some interesting facts: • • • • • • • • • • McDonald's brand is in 122 countries around the world. Every 4 hours the new restaurant is being opened. McDonald's feeds more than 46 million people a day more than the entire population of Spain. McDonald's has sold well over 100 billion hamburgers. Antarctica is the only continent that does not have a McDonald's restaurant - yet. The busiest international McDonald's restaurant is located on Pushkin Square in Moscow McDonald's restaurants in India are our only restaurants in the world where you cannot buy beef. McDonalds in the Germany and Spain sell beer. In the Phillippines they have spaghetti on the menu and In Hong Kong they have rice burgers.
  5. 5. Now questions to you: • What do you think about McDonalds? • When and how often do you go there? • Why not?
  6. 6. Funny Commercial.
  7. 7. The Development of a brand. • Speedee • Golden Arches • Ronald McDonalds
  8. 8. Basic Statistics
  9. 9. McDonalds USA • 26 million customers every day • Nearly 90 percent of McDonald’s U.S. restaurants are independently owned. • McDonald's represents 43% of total U.S. fast food market. • McDonald's distributes more toys per year than Toys-R-Us
  10. 10. McDonalds Polska • First Opened on 17th June 1992 • The Biggest network of restaurants • More than 15500 employees
  11. 11. Costs • The total cost of franchise fees, equipment and other startup costs will be at least $500,000 and could be as much as $1.5 million or more. • McDonald's requires a minimum 40 percent down payment. • McDonald's requires franchise owners to have substantial financial resources, including $100,000 in liquidable assets. • Be prepared to commit to a 20-year franchise agreement with McDonald's. • Actual cost of a restaurant in Poland is 6-7 million zl.
  12. 12. Who has been to Subway? • When? • What do you think about the prices? • Do you remember what you bought? • Where did you go? IF YOU HAVEN’T BEEN THEN ONLY 1 QUESTION • Why not????
  13. 13. A little background info • It is owned and operated by Doctor's Associates, Inc. • Subway is one of the fastest growing franchises in the world with approximately 34,187 restaurants in 97 countries/territories as of March 2011 • It is the largest single-brand restaurant chain globally
  14. 14. Who recognizes this man?
  15. 15. This is Jared Fogle • Also known as the ‘Subway Guy’ • He was used in their advertising campaigns • Used to be very VERY fat • Switched to eating at Subway (and walking) and lost so much weight his own friends didn’t recognize him • Supposedly Subway made around 8.2 billion dollars (double what they used to make) after cooperating with Jared
  16. 16. Before and After
  17. 17. 37 Restaurants in POLAND • Subways in Poland are very clean to those compared to America • They are quite expensive (both to franchise and eat at) • Most restaurants have a lot of foot traffic, but people usually order the smaller subs (unlike America)
  18. 18. Basic Costs of Opening a SUBWAY • First franchising license is 7,500 euros • The following licenses are 3,500 euros each • The number of these licenses varies • The cost of the place where the restaurant is located is not included
  19. 19. Subway in America • Subway restaurants have been consistently ranked in Entrepreneur Magazine's Top 500 Franchises • Subway was selected as the #2 overall franchise in 2008 • Was ranked as the #3 "Fastest Growing Franchise", and the #1 "Global Franchise"
  20. 20. Subway in America • Subway restaurants have been consistently ranked in Entrepreneur Magazine's Top 500 Franchises • Subway was selected as the #2 overall franchise in 2008 • Was ranked as the #3 "Fastest Growing Franchise", and the #1 "Global Franchise"
  21. 21. Costs in America The initial franchise fee to own a Subway location is $15,000, which one must pay at the time the franchise agreement is signed. The parent company estimates that one’s initial investment will run between $80,000 and $240,000, plus there is an annual royalty fee of eight percent, which is figured on each store’s gross sales volume. The total investment mentioned above also happens include what the company estimates it would cost the average operator to run the business for its first 90 days.
  22. 22. In Conclusion… • Subway plans to open 9,000 more stores in Europe by 2020 • They planned to open 4,000 stores 2010 • As of right now they have opened 1,000 stores in Europe, most of which are in the UK and Ireland

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