The rhythm of life of modern society, fast and dynamic, managed to affect the way of eating. It is not surprising that the fast food industry in recent decades is one of the most popular and fastest growing. The history of big business knows many examples when hard work and a successful concept made it possible to create a large, highly profitable company literally from a sandwich counter.
Perhaps one of the most striking examples is McDonald’s Corporation, an American company that has long led the list of world leaders in the field of catering. According to the end of 2015, McDonald's establishments are operating in 119 countries of the world, and the number of establishments with the golden M logo is approaching the 40,000 mark. Moreover, the American company itself owns less than half of all McDonald's, the rest operate under franchising.
So what is a franchise partnership with McDonald’s and how to get a franchise McDonald's in Russia?
About company
The history of the global fast food giant began in 1940, when the MacDonald brothers opened their first restaurant in California. For the first 8 years of work, novice businessmen managed to develop a common concept and principles of a fast food restaurant, the analogues of which in the world have not yet been: a restaurant for the whole family of any level of financial income.
Later, in 1955, businessman Ray Crock acquired the right from the MacDonalds to open McDonald's franchised restaurants. It was Kroc who developed the idea of standardizing all McDonald's establishments. Strict adherence to all conditions and work standards at every McDonald's is still the main secret of the success of this restaurant chain.
Franchising McDonald’s Corporation. World practice
Today, when there are restaurants successfully operating around the world owned by McDonald’s Corporation, frankly franchised open McDonald's brings the lion's share of the company's revenue. And this is understandable, because the McDonalds brand is so popular in most countries of the world that buying a franchise for this company is a mega-successful investment. According to some reports, of the nearly 40 thousand restaurants operating today, more than 80% cooperate with a franchise company.
In addition to standard family restaurants, establishments work in the “McCafe” format (company coffee shops) and “McAvto” - service for motorists.
According to global surveys, the McDonald's restaurant chain is number one in most countries with establishments in the chain. From the 50s and literally until 2010, McDonald's managed to maintain global leadership in the fast food franchise.
Unlike many companies, McDonald’s Corporation can offer the franchisee two types of cooperation: either an existing restaurant along with premises and equipment is transferred to the partner’s management, or it is proposed to re-establish the whole region, that is, create a network of restaurants from scratch in a new place. A McDonald's franchise agreement is usually concluded for a period of 20 years.
Menu of McDonald's restaurants
The first thing that comes to mind when mentioning McDonald's is the standard MacBed: a burger, a portion of french fries and a glass of cola. But the menu offered by institutions with golden arches on the sign is much more extensive. This is a sesame bun with a variety of meat fillers from beef, fish, chicken, pork with the addition, depending on the recipe, cheese, vegetables, salad and sauces.And the standard McDonald's menu includes a huge number of muffins with various fillings, sweet desserts, ice cream, breakfast dishes (pancakes, omelettes, etc.) and the Happy Milieu set for children. In addition, visitors are offered an excellent selection of soft drinks - coffee, tea, juices, sweet "soda" (not only cola), mineral water and milkshakes. Outside the homeland of the McDonald's network, the menu also includes all the traditional specialties of this brand, but adjusted for national cuisine and the particular culture of the food of the country where McDonald's operates on a franchise.
A feature of the menu of restaurants of this brand is the presence of seasonal dishes that appear on the menu for a short time, about two or three months. This, for example, roll sandwiches or the former very popular beef a la rus.
McDonald's in Russia
Company representatives do not hide the fact that the McDonald's franchise in Russia is very interested in them as a promising and profitable enterprise. But it was not always so. From the moment of opening in the legendary first McDonald's in Moscow, on Pushkinskaya Street, and until recently, all the restaurants of this chain belonged to McDonald’s Corporation solely as owners. To work with franchisees as massively as in the whole world was not included in the plans of the head office as long as the competition in the fast food sector was not great.
However, with the spread of other large fast food chains in 2012, the first franchise agreement was concluded in Russia, although at first it was only about restaurants located in the vicinity of train stations and airports.
Two companies operate on behalf of McDonald’s Corporation in the Russian Federation: McDonald's LLC and Moscow-McDonald's CJSC. They represent the interests of the American giant and are negotiating with applicants for the opening of a franchise restaurant.
How to become a franchisee in Russia
Obtaining a franchise in Russia is a long, complex, very expensive process. In addition, company representatives have repeatedly stated that preference is given to investors who are ready to take over immediately the development of a new region, rather than the opening of one or more McDonald's.
To begin the process of obtaining a franchise, you need to leave a letter of application to McDonald’s Corporation, after which the company sends a questionnaire for a candidate for cooperation and an approximate list of requirements. A completed questionnaire with personal and biographical information, contact information of the applicant is sent to the archive until the decision is made to transfer the McDonalds franchise in this region.
As a result, an applicant who meets all the requirements of the company and is ready to strictly fulfill the conditions of the McDonald's franchise will be able to become a franchise partner of a world famous brand and open an institution under the McDonalds logo.
Requirements for the applicant for cooperation
Valuing business reputation, the company has strict requirements for future partners. An applicant who wants to open a McDonald's franchise must have the following qualities:
- Successful experience in the field of entrepreneurship, company management or a number of retail companies.
- Personal and business qualities, allowing to ensure fast growth and stable dynamic development of the restaurant, as well as competently and efficiently manage financial resources, applicant's training: willingness and consent to learn all the intricacies of the McDonald's restaurant business, the ability to conduct work in accordance with all the rules of the company.
- Impeccable reputation and good credit history.
- The presence of a business plan and the ability to effectively apply it.
- Corresponding seed capital.
- An important condition is the participation of the franchisee in all charity events supported by the company.
- There are also special requirements for premises for McDonald's restaurants: an area of at least 70 square meters.m, location in a crowded place with high traffic, supplying sufficient electricity, cold and hot water supply.
Franchise cost of McDonald's restaurant for Russian cities
How much the McDonald's franchise in Moscow and other large cities of Russia will cost can be said only approximately. The American company itself prefers to keep specific numbers secret, therefore, when planning cooperation, you need to consider that all negotiations are conducted with each future franchisee individually. Prices also depend on many other factors, for example, the city in which the McDonald's franchise will operate.
One thing is certain: the cost of franchising McDonald’s Corporation is very high in relation to cooperation with other brands of catering. Experts call today the amount from half a million to two million dollars, but this price also varies depending on the exchange rate and many other external factors. Costs are allocated as follows:
- The McDonald's franchise is $ 45,000.
- Starting capital of the franchisee - from 950 thousand to $ 2 million.
To this should be added “royalties”, that is, monthly deductions from turnover in the amount of 12.5%, the cost of training, training, advertising, rent and more.
Benefits of the McDonald's Franchise
But, even taking into account the fairly substantial finances necessary to start working on the McDonald's restaurant franchise, it is impossible not to admit that there are many tangible advantages in such cooperation with the company:
- The popularity and fame of the brand. The company's active work in developing the catering market and excellent marketing have done their job - in the whole world there are few people who have never heard of McDonald's. The consumer demand for fast food from this restaurant chain is also encouraging: the company owns more than 50% of the official fast food market.
- Training. Franchise owners and every single employee undergoes multi-stage training, no different from the McDonald's program for employees.
- Information support for the franchisee.
- "Ready" menu with the recipe of specialties.
Disadvantages of the McDonald's franchise
- Despite the fact that McDonalds strongly emphasizes that these are restaurants for the whole family, and the network uses natural products, there is biased attitude to fast food in general, numerous allegations of the harmfulness of such food.
- The McDonald's franchise implies continuous monitoring of compliance with all standards, but not only. Franchisees are directly dependent on the direction of the company's policy at the moment. All innovations in all areas of restaurant work - menus, cooking techniques, service forms - are required for immediate implementation at a franchise point. It is worth mentioning the policy of a “single price” in all McDonald's restaurants, the observance of which is strictly monitored.
- The work of McDonald’s and all franchising establishments is significantly affected by factors such as the dollar exchange rate and the political situation in the world.
