With all those rules and regulations, why do people buy into a mcdonalds franchise instead of using that money to build their own fast food joint? I just don’t understand.
It’s generally considered a turnkey operation. McDonalds has done all the research. And when I say all the research I mean ALL the research. They’ve got thousands of sites picked out for future McDs, they’ve got revenue estimates for all those locations, their revenue estimates show it’ll be at least moderately profitable, they know your price ceiling. And that’s just the ground work, then you dig into the OMT manual and there’s everything you need to drive that, what equipment to buy, how to arrange, how to use and maintain it, how many employees to hire, what you’re looking for in employees, how many to have on the floor at any given time. And of course you get all the advertising and corporate identity. Really if you can read at a 6th grade level and do what McDs tells you to you will have a successful store, and from there you can expand and have dozens of successful stores.
And none of this is unique to McDs, this is how the franchise business model works. The only thing that’s different about McDs is they’re so thorough, their ground research is amazing. Amazing enough that economists still use the price of a BigMac in an area to determine the real comparative value of their currency, the BigMac Index is there because McDs has decided how much labor it should take the average worker to buy a BigMac, and they price to make that happen.