Current location - Recipe Complete Network - Catering industry - Why did McDonald's launch franchising? How to make a profit from franchising?
Why did McDonald's launch franchising? How to make a profit from franchising?

In 2112, McDonald's had 41,178 chain stores, 6,598 direct stores and 34,481 franchise stores worldwide, accounting for 84%. It can be said that franchise business is the key factor for McDonald's success. By the end of 2113, the total number of McDonald's stores in Chinese mainland had exceeded 1,911, and China became the first McDonald's market in the world with three business models: direct restaurant, traditional franchise and developmental franchise. We will also make a more in-depth analysis of McDonald's franchise model in the following. Mcdonald's application form

In p>1955, Ray Kroc opened the first McDonald's restaurant in the United States with the franchise he bought from the McDonald's brothers, and turned McDonald's into the world's largest catering enterprise. McDonald's is one of the most successful global brands in franchise mode. It can even be said that the success of McDonald's is the success of franchising. McDonald's has formulated a series of systems to ensure the success of its franchise. For example, in order to ensure the quality of dining in each branch, the operation is standardized and easy to copy; Send new franchisees to "Hamburg University" for strict training; Regard franchisees as business partners, and the success of franchisees will ensure the success of McDonald's and so on.

1. Disassembly of McDonald's franchise business model

Anything learned from predecessors' experience can be taught better in economics. Therefore, it is not unreasonable to say that the person who laid the world catering map of McDonald's today is not the McDonald's brothers who originally wanted to be hamburger craftsmen, nor the legendary Ray Kroc, but an economist. Franchising (or joining) is obviously a mature business model, but joining some domestic industries is more like a scam. We might as well look at how McDonald's did it. After all, to some extent, franchising has made McDonald's today.

klock's initial joining method can't support his expansion strategy at all. The more stores there are, the more debts the company has. After analyzing McDonald's statements, an economist gave a bold suggestion, which made McDonald's today. In his view, it is impossible to make money by simply relying on the dividends of franchise stores. McDonald's should buy the land in the business district to open a store, and then "sell" the store to franchisees, from which McDonald's will collect franchise fees and rents, which will not only achieve the purpose of expansion, but also guarantee the income. That's when things started to change.

not all McDonald's restaurants are owned by McDonald's. There are two types of McDonald's restaurants in European and American markets: one is direct stores, which are owned and managed by McDonald's, and all the income belongs to McDonald's; The other kind is franchise stores, that is, franchise stores. In ray? Under Crocker's leadership, the franchise and chain operation system of McDonald's has the following characteristics:

(1) Strict selection of franchisees

To join McDonald's, a merchant must first apply to McDonald's headquarters. After the headquarters has passed the examination on its credit status, management ability and financial ability, both parties can reach an agreement through consultation before signing a franchise contract. Because McDonald's, an international famous brand, means inexhaustible financial resources, many merchants apply for joining, but in fact they are always disappointed. The harsh joining conditions of McDonald's make it difficult for many people to catch up with them. In some countries, applicants need to have worked in McDonald's for more than 11 years before they are eligible to apply for joining. In 1999, among the tens of thousands of applicants in Taiwan Province, McDonald's only chose three to join. The reason why McDonald's selects franchisees so strictly is mainly because the failure of any franchisee will affect the whole corporate image of McDonald's.

(2) Uniform conditions for joining

According to McDonald's regulations, franchisees must have at least $1 million to $1.75 million of their own funds. Once signing a contract with the company, they must pay the first royalty of $45,111, and then pay a monthly royalty and house rent. The former is about 4% of the monthly sales, while the latter is about 8.5%.

Every time McDonald's opens a branch, the headquarters will send staff to choose the address, organize the building and interior and exterior decoration. Mcdonald's company usually owns the ownership or use right of the franchisees' real estate, and then sublets it to franchisees to collect real estate rent, which accounts for a large proportion of McDonald's income.

The contract signed by McDonald's and its franchisees is valid for 21 years, and the company has the following responsibilities to the franchisees: granting McDonald's corporate name and trademark use right, product manufacturing technology, management know-how, etc. to the franchisees for use in the specified time and area; Train employees for franchise stores in the company's hamburger university; Provide management consulting, be responsible for advertising, and provide discounts when supplying to franchise stores. However, McDonald's company does not directly provide tableware, food and raw materials to franchise stores, but signs contracts with professional suppliers, and then professional suppliers supply them to franchise stores.

McDonald's requires franchisees to strictly abide by the management system formulated by the company and accept the guidance and supervision of the company. Every month, the headquarters will send inspectors to inspect franchisees around the country, report the inspection results to the headquarters, and force franchisees that are not up to standard to change their business appearance.

(3) Unified enterprise name and logo

All franchise stores are named after McDonald's, and the logo of the enterprise is "Golden Arch", which is an arc-shaped "M" letter with yellow as the standard color. This unique golden Double Arch trademark is very eye-catching in the street, which makes people want to go into the store and have a look.

At the entrance of every fast food restaurant, there is a symbolic character idol-"Uncle McDonald", which is dressed as a clown in the traditional circus and a symbol of humor, friendship and peace. In the United States, the awareness of "Uncle McDonald" among children reached 96%, second only to Santa Claus. The unified and unique corporate logo of McDonald's not only enhances the attractiveness of products, but also saves promotional expenses and enhances the corporate image.

(4) Unified advertising

In the early days of McDonald's establishment, the advertising was carried out by the franchisees themselves. With the growth of enterprises, it is necessary to carry out unified advertising, in order to allocate huge advertising costs to many stores and huge sales. In 1967, McDonald's franchisees set up a national advertising fund as a national advertising expenses. In 1968, the fund received $3 million and used it for TV advertisements, and in 1985, it received $81 million. At present, the annual advertising expenditure of McDonald's reaches 1 billion dollars, but the burden of advertising expenses is not heavy when it is divided into more than 28,111 branches and sales of more than 41 billion dollars.

(5) Unified product quality

McDonald's has extremely high requirements on food quality and requires standardization. Bread can't be sold if it is not round or the incision is uneven; The receiving temperature of milk slurry should be below 4℃, and it will be returned if it is high; Machine-cut beef patties each weigh 47.32g, with a diameter of 98.5mm and a thickness of 5.65mm. The meat can't be mixed with any water, such as heart and lung, and the fat can't exceed 11%, and more than 41 quality control checks are required. Any raw material has a shelf life. Lettuce can only be kept fresh for 2 hours when it is taken from the cold storage to the ingredient table, and it will be scrapped when it is out of date. The production process adopts computer control and standard operation, and the finished products and time cards are put into the finished product insulation tank together; French fries are thrown away after more than 7 minutes and hamburgers are thrown away after more than 11 minutes. These rigid operating rules are used to ensure the quality of products, which is why McDonald's has won many consumers and repeat customers.

(6) unified service standard

McDonald's services include the sense of comfort of restaurant buildings, the convenience of business hours and the service attitude of sales staff.

When customers walk into any McDonald's restaurant anywhere, they will feel that the architectural appearance, interior furnishings, food specifications, waiters' manners, clothes and so on are strikingly similar, which can give customers the same standard of enjoyment.

Smile is the characteristic of McDonald's. All the clerks are smiling, talking and doing things with customers in a lively and cheerful manner. All staff shall provide fast, accurate and friendly service, and the queue shall not exceed 2 minutes. After the customer orders the food, the waiter shall deliver the food to the customer within 1 minutes.

McDonald's employees are not allowed to quarrel with customers, otherwise they will be dismissed regardless of the seriousness and merits. The employees in the back hall and the front shop have strict requirements on dressing. Men are not allowed to have long hair, and women should wear hairnets. No heavy makeup is allowed. In order to ensure the cleanliness of the store, the president of the company even personally went to the restaurant to clean it. In McDonald's employee code, there is a provision that "it is better to get up and clean than to rest against the wall". All plates and machines must be thoroughly cleaned and disinfected after closing time, the floor should be scrubbed clean, and the front of the restaurant should be kept clean. Dining in such a restaurant, guests enjoy not only high-quality food and? Service, as well as a clean and fresh environment, naturally happy mood. After leaving a good impression, I will not only go there often, but also introduce friends, relatives and colleagues, which has promoted the continuous growth of sales.

(7) Unified operating procedures

McDonald's employees "have procedures for hand washing, and manuals for management". Employees must be strictly disinfected with disinfectant hand sanitizer before taking up their posts, and it is stipulated that their hands should be rubbed for at least 21 seconds before washing, and then their hands should be dried by a dryer. If you touch hair, clothes and other things, you should wash your hands and disinfect them again.

McDonald's operating manual explains in detail the operating procedures and methods of the restaurant's work, and it is constantly enriched and improved in practice. The operation manual divides the restaurant work into more than 21 sections, detailing the items, operation steps and job responsibilities that should be prepared in advance for each section. After entering McDonald's, employees will gradually learn each working section. Employees with outstanding performance will be promoted to trainers. Trainers with good performance can enter the management group. All managers start from employees, so they must master the basic post operation with high standards and pass the post work inspection.

(8) Unified staff training

McDonald's headquarters has set up a "hamburger university" to train branch managers and professional technicians. The study contents include food cooking, machinery maintenance, raw material preparation, quality management, inventory control, accounting, advertising, public relations, personnel management and so on. At present, Hamburg University has trained tens of thousands of graduates, who have become managers or business backbones of McDonald's franchise stores.

In addition, in practical work, a higher-level manager has to conduct one-on-one training for the managers or employees at the next level, and only after passing the training can he be promoted.

McDonald's also has very strict requirements on the source of funds for franchisees. Considering the factors such as sales, profitability and occupation cost, a restaurant needs to spend 411,111 to 811,111 US dollars, and the franchise fee fluctuates between 111,111 and 321,111 US dollars. Franchisees abide by the contract and pay this fee in one lump sum. The source of the franchise fee cannot be bank loans or personal loans, but the remaining funds can be obtained from traditional financing channels. Although McDonald's does not provide financing, McDonald's

Many companies like to study the business model of McDonald's, and there are different opinions. Some people think that McDonald's sells hamburgers, of course, and some people come to the conclusion that McDonald's is actually a real estate company after analyzing its financial report. Yes, among the more than 37,111 McDonald's stores in the world, the proportion of franchise stores accounts for 91%. According to the annual report of McDonald's in 2117, the annual income of direct stores is $12.719 billion, while that of franchise stores is $11.111 billion. Although the income of direct stores is higher than that of franchise stores, the cost of direct stores is as high as $11.419 billion, while that of franchise stores is only $1.791 billion. Regardless of sales, finance, advertising and other expenses, let's roughly calculate the profit composition of McDonald's, which is $2.211 billion from direct stores and $7.334 billion from franchise stores. The profit brought by franchise stores is much higher than that of direct stores. According to the financial report analysis, 51% of McDonald's operating profit comes from real estate leasing. After this account is calculated, McDonald's itself can't refute that it is actually a real estate company.

However, this situation didn't happen today. As early as 1965, when McDonald's went public, the situation of rapid expansion through franchising already happened. Why didn't McDonald's clearly value its real estate in more than 111 countries after so many years? Because the rental income of McDonald's is based on the franchise, and the reason why McDonald's can own more than 81% of the restaurant stores through the franchise is because the brand of McDonald's, the brand symbol of golden big M, has been closely linked with Hamburg French fries. If McDonald's changes its main business to real estate or clothing in the future, consumers may not buy it, so it has to maintain the brand image of Hamburg French fries to support its business model for half a century.

whether Hamburg or real estate, the real "product" of McDonald's is its unique franchise. This franchise proposed by economists probably draws lessons from the organizational form of private equity funds. Partnership funds include Limited Partner and General Partner. Limited partners are similar to the shareholders of the company, and bear limited liability to the extent of the amount they invest, but they do not participate in the daily operation and management of the fund. McDonald's Company plays such a role for the franchisees; General partners are professional fund managers, who can correspond to the owners of McDonald's restaurants, except that they are responsible for the daily management of the funds, while the restaurant owners are responsible for the operation of the restaurants. If the management is not good, McDonald's has the right to take back the restaurants.

in this way, McDonald's not only ensures the control of the brand, but also maximizes the integration of resources. McDonald's has verified the success of franchise, and to some extent, franchise has also made McDonald's.

2. McDonald's entered Chinese mainland to test the franchise

As early as 1975, McDonald's opened a restaurant in Hong Kong. However, it was not until October 8th, 1991 that the first McDonald's restaurant in Chinese mainland opened in Shenzhen, China, and its Chinese name was called "McDonald" instead of "McDonald". This restaurant is located in Guanghua Building, Jiefang Road, Shenzhen, with more than 511 seats. Settle accounts in Hong Kong dollars and RMB. When the restaurant opened, there was a sea of people, and 411 employees of McDonald's Shenzhen were too busy, and 511 employees were temporarily transferred from Hong Kong to help. The China craze of McDonald's started in Shenzhen.

In p>1992, McDonald's opened the first restaurant in Beijing in Wangfujing, which was the largest McDonald's restaurant in the world at that time, with more than 711 seats. At that time, eating McDonald's was basically a high consumption, and eating western food was a concept. Therefore, McDonald's has become a fashion symbol and developed rapidly in China. Of course, another fast food restaurant, KFC, also from the United States, is developing faster.

McDonald's has been operating directly in Chinese mainland market. Until 2113, McDonald's began to conduct a pilot franchise in China, and selected the first franchise licensee from more than 1,111 franchisees who volunteered. In August 2113, McDonald's chartered a restaurant in Tianjin, which was operating very well.