McDonalds Franchise Review

McDonalds are a globally recognised brand. They also operate one of the most well-known franchise operations in the world too.

The Company

Although not the biggest fast food franchise in the UK (a title now owned by Subway), McDonalds is undoubtedly the one that people are more familiar with. McDonalds are known throughout the world with a McDonalds in most countries. McDonalds are full members of the British Franchise Association and were winners of the bfa HSBC Franchisor of the year in 2011.

A Little Background

Application to become a McDonalds franchisee is rather stringent, seemingly because of the value of the brand. As a McDonalds franchisee you are expected to have high personal integrity, people and management skills, financial acumen and strong leadership skills. The work you carry out is not just administrative as McDonalds expect their franchisees to be involved in all aspects and levels of the business. As well as your “in business” traits, you are also required to act as an ambassador for McDonalds and to be actively involved in your community. As you would expect from a company like McDonalds, there is extensive training supplied.

Investment

As you would expect a McDonalds franchise isn’t cheap. In fact, setting one up will cost anywhere between £125,000 and £325,000 of which 25% should be immediately available. The rest can come in the form of a bank loan etc. This includes a £30,000 franchise fee and a refundable £5,000 training deposit.

Earning Potential

McDonalds claim that the average store will earn between £95,000 and £200,000 per year in turnover. Of this McDonalds claim that you will typically spend 10-15% on rent and 5% as a service fee for using the McDonalds system. Then there is a contribution to national marketing which currently stands at 4.5%.

Conclusion

McDonalds are arguably the most successful example of franchising in the UK. The company as a whole continues to be immensely profitable and the McDonalds brand is not going anywhere. Whilst the costs are high in setting up and the work will undoubtedly be hard, the fact that your business is a McDonalds branded business means that there is instant custom for you. Really, a McDonalds franchise is all about the brand, and given its current and ever increasing popularity, there is definitely money to be made here.

 

 

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From: Simon Roberts