The McDonald's franchise system is widely acclaimed as being the most successful and well-run franchise organization in the world. The franchise has created and built more millionaires than any other franchise organization and continues to lead the way in innovative business ideas, supportive franchise structures and some of the world's most effective business thinking.
McDonald's brand is in 122 countries around the world. Thirty thousand locations serve 51 million customers each day. More than 70 percent of McDonald's restaurants around the world are owned and operated by independent local businesspeople.
In addition, the company operates Boston Market. It also has a subsidiary, Redbox, which in 2003 started as 18-foot wide automated convenience stores, but as of 2005 has focused on DVD rental machines.
Most standalone McDonald's restaurants offer both counter and drive-through service, with indoor and sometimes outdoor seating. The Drive-Thru, Auto-Mac, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the former two steps are frequently combined. 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.
The McDonald's Franchise is not meant for everyone. There are very strict requirements and qualifications in place to manage the process of accepting franchisees into the McDonald's system.
Here is an overview of what is needed in order to apply for a McDonald's:
McDonald's Start-up Costs & Franchises Fees:How much does it cost to open a McDonald's Franchise?
Total Investment: $118,375-$1,900,000
Initial Franchise Fee: $45,000
Royalty Fee: 12.5%+
Advertising Fee: N/ATerm of Agreement: 20 years
Renewal Fee: $45K
The Ray Kroc Story“If I had a brick for every time I’ve repeated the phrase Quality, Service, Cleanliness and Value, I think I’d probably be able to bridge the Atlantic Ocean with them.” —Ray Kroc
How do you create a restaurant empire and become an overnight success at the age of 52? As Ray Kroc said, “I was an overnight success all right, but 30 years is a long, long night.”
In 1917, 15-year-old Ray Kroc lied about his age to join the Red Cross as an ambulance driver, but the war ended before his training finished. He then worked as a piano player, a paper cup salesman and a multi-mixer salesman.
Kroc pitched his vision of creating McDonald’s restaurants all over the U.S. to the brothers. In 1955 he founded the McDonald’s Corporation, and 5 years later bought the exclusive rights to the McDonald’s name. By 1958, McDonald’s had sold its 100 millionth hamburger.
A Unique Philosophy
Ray Kroc wanted to build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation. He wanted to serve burgers, buns, fries and beverages that tasted just the same in Alaska as they did in Alabama.
To achieve this, he chose a unique path: persuading both franchisees and suppliers to buy into his vision, working not for McDonald’s, but for themselves, together with McDonald’s. He promoted the slogan, “In business for yourself, but not by yourself.” His philosophy was based on the simple principle of a 3-legged stool: one leg was McDonald’s, the second, the franchisees, and the third, McDonald’s suppliers. The stool was only as strong as the 3 legs.
Ray Kroc believed in the entrepreneurial spirit, and rewarded his franchisees for individual creativity. Many of McDonald’s most famous menu items—like the Big Mac, Filet-O-Fish and the Egg McMuffin— were created by franchisees. At the same time, the McDonald’s operating system insisted franchisees follow the core McDonald’s principles of quality, service, cleanliness and value.
The Roots of Quality
McDonald’s passion for quality meant that every single ingredient was tested, tasted and perfected to fit the operating system. As restaurants boomed, the massive volume of orders caught the attention of suppliers, who began taking McDonald’s standards as seriously as McDonald’s did. As other quick service restaurants began to follow, McDonald’s high standards rippled through the meat, produce and dairy industries.
In 1961, Ray launched a training program, later called Hamburger University, at a new restaurant in Elk Grove Village, Illinois. There, franchisees and operators were trained in the scientific methods of running a successful McDonald’s. Hamburger U also had a research and development laboratory to develop new cooking, freezing, storing and serving methods. Today, more than 80,000 people have graduated from the program.
The End of a Legend
Right up until he died on January 14, 1984, Ray Kroc never stopped working for McDonald's. Even when he was confined to a wheelchair, he still went to work in the office in San Diego nearly every day. He would keep a hawk's eye over the McDonald's restaurant near his office, phoning the manager to remind him to pick up the trash, clean his lot, and turn on the lights at night.
From his passion for innovation and efficiency, to his relentless pursuit of quality, and his many charitable contributions, Ray Kroc’s legacy continues to be an inspirational, integral part of McDonald’s today.