You are on page 1of 17

FAST FOOD FRANCHISING

Prepared for Mr. Andrew Peterson

Rosele castor
12/2/2014

1|Page

Table of Contents
Cover Page
Table of Contents
Abstract
Introduction
Statement of Problem
Purpose Statement
Option 1:MAC DONALD
Option 2:BURGER KING
Option 3:WENDYS
Summary
Recommendations
Works cited

1
2
3
4
5
6
7
8
9
10
11

2|Page

Abstract
Fast food restaurant is the term use to describe food that is prepared and served
very swiftly. Fast Food restaurant have been around for quite some time, in
United States it became popular around 1950s. United States have the largest
food industry in the world and have the most successful franchises. The purpose
of this white paper is to present three different fast food franchise. This paper will
evaluate the description for each of them, cost, financial gain, and taste. Each of
these implement has pros and cons that must be balanced before a decision can
be made.

3|Page

Introduction

RC Real Estate Company has been hired by Andrew Peterson to help him select
which will be the best business prospect for him to devote to. Mr. Peterson is a 40
years old real estate investor who has recently moved to Florida from Canada with
his wife and kids. He has been invested in the real estate market for many years,
currently, Mr. Peterson decided that he wants to start another business in Lehigh
Acres, FL. He is interested in opening a fast food restaurant, but he needs
assistance in determining which franchise that will have less operating cost and
more investment return.

4|Page

Statement of the problem

Based on the research found on the franchising website, starting any business is a
major challenge. Most owner/operators enter the system by purchasing an existing
restaurant, either from Mac Donald or any other fast food restaurant. Whether Mr.
Peterson choose to go with a franchise or a traditional fast food, both option is very
sophisticated. Assessing the cost of a franchise against traditional business
opportunity takes research and self- valuation. Lehigh Acres, Florida is one of the
fastest growing city in Lee County. As of August 2014, Lehighs population is
95,767 people. There are only four fast food restaurants. Mr. Peterson realized that
this is a very decent opportunity and he has requested Rc real estates team to help
him make the right decision by researching the different franchise available for
steak and burger. The team will outline the advantages and the disadvantages of
the franchise over a traditional business model.

5|Page

Purpose statement
The purpose of this white paper is to evaluate three different fast food restaurants
which are Mac Donald, Wendys, and Burger king to determine which one of them
would be the greatest option for Mr. Peterson. The evaluation will consist of
description for each of the fast restaurant, cost, financial gain, rules, and tastes.
This report will make a recommendation bases on research.

6|Page

Option 1: MacDonalds Fast food Restaurant

History of MacDonald
The McDonald migrated from Manchester, New Hampshire to Hollywood in
the late 1920, Two Brothers Richard and Maurice McDonald began working
as set movers and handymen at motion-picture studios. In 1937, their father
Patrick McDonald opened a food stand named The Airdrome back then
hamburger was just ten cents and all-you-can-drink. The brothers were
amazed with the idea, they joined their father and changed the name to
MacDonalds Bar-B-Q and had twenty-five menu items, typically
barbecue. In the early 1960s, The Mc Donalds advertising really began to
launch.1961 Kroc bought out the McDonald brothers for $2.7 million,
targeting at making McDonalds the number one fast-food chain in the

7|Page

country. In 1980, McDonalds corporation became one the 30 companies


that make up the Dow Jones industrial average.

Description of McDonald
McDonald is the leading global food service retailer with more than 35,000
local restaurants serving nearly 70 million people in more than 100 countries
each day. McDonalds restaurant offer both counter service and drivethrough service, indoor and sometimes outdoor seating. Primarily sells
hamburger, diverse types of Chicken sandwiches, French fries, soft drinks,
Breakfast items and deserts; Moreover, McDonald offer vegetarian items
such as salads and wraps.
Philosophy
According to Wikipedia, Ray Kroc was a strong believer in giving.
Something back into the community where you do business. McDonalds
acted upon that philosophy in 1974, he opened the first Ronald McDonalds
House, in Philadelphia, to provide a home away from home for the
families of children in nearby hospitals.

8|Page

Franchise Rules and Regulations


In order to become a McDonald franchisee, the owner/operator have to take
a world class training so that the he can become an operational expert
attentive on providing an outstanding experience for McDonalds customers
every day. Some of the training highlights include; 9-18 months training in a
restaurant near home, self-directed, part time- 20 hours per week, seminars,
conferences, one-on-one training sessions etc. The reason for this training is
because McDonald believe in customer satisfaction, social responsibility and
support. McDonalds manages all the site evaluation, acquires the property
and constructs the building so they can make sure that the location will be
satisfied to customers view.

Cost
The total cost varies from restaurant to restaurant, the minimum amount
require is $750,000 U.S. of non-borrower personal funds.
Cons

Pros

Around 70
millions
customers
serve each d

Better
taste

children
#1 Choice
Huge
Scale

more
than
33,500
locations
across
100
countries

High Cost

commidity
prices

Possible
health issues

9|Page

Option 2: Wendys Fast Food Restaurant

History of Wendys
The first Wendys restaurant opened in 1969 it was a dream of one
man named Dave Thomas. Wendys old fashioned hamburgers
was called after Daves daughter Melinda Wendy Thomas,
instantly the name became popular of the industry.
Description of Wendys
Wendys is an international fast food chain similar to McDonald. Nearly
77% of Wendys are franchised. The first franchise initiated on September
23, 1975 in Hamilton, Canada. Wendys became the third largest burger fast
food chain in the world. Presently, they offer hamburger, chicken
sandwiches, French fries and beverages including the Frosty. Different than

10 | P a g e

burger king and MacDonalds, Wendys doesnt have a signature sandwich


such as the Big Mac or the Whopper. Wendys offered burgers with fresh
meat. Whereas Wendys was the best known for its hamburgers, their
restaurant also offered various choices of salad for health sensible people.

Philosophy
According to Wikipedia Dave Thomas was a man with heart, he had
established the Dave Thomas foundation for adoption, a charity with one
goal, help kids in foster care find a permanent, loving home. His
employment philosophy was you can expect an exceptional experience.
Treated his employee like family, provide training and consideration that
anyone would anticipate from an industry leader.

Franchise Rules and Regulation


Before opening a franchisee there is a typical initial training program about 2024 weeks in classroom and one-the-job training. Wendys looking for
prospective franchisees who; have access to adequate capital for reinvestment
in Wendys image activation program and new restaurant development,
demonstrates exceptional managerial, business expertise, devotes to operational

11 | P a g e

excellence, customer service and strong willingness to learn and practice the
Wendys business model.
Cost
There are many factors that influence the cost of a Wendys franchise. Wendys
requires $500,000 in liquid assets with $1,000,000 net worth.

Pros
Around
6,650
locations
across the
globe

Cons

less profit

Less
operating
cost than
McDonald

healthier
than
McDonald

Various
types of
salad

currently not
accepting
applications

12 | P a g e

Option 3: Burger King Fast food Restaurant

History of Burger king


The company began operated in 1953 as Insta-Burger King, in Miami FL, later
they ran into financial difficulties in 1954, the company was sold to David
Edgerton and James McLamore, and they changed the name to Burger king.
Currently the company merged with a Canadian-based donut chain Tim
Hortons.

13 | P a g e

Description of Burger king


Burger king feature flame-grilled hamburgers, chicken and other specialty
sandwiches, French fries, soft drinks. Burger kings signature sandwich is
Whopper introduced in 1957. As of December 31, 2013, the Burger king
system contained of 13,667 restaurants in over 95 countries and U.S. territories.

Philosophy
Like McDonald and Wendys, Burger king believe on giving back to the public.
Their philosophy is to make a positive impact in the community by supporting
education and providing hardship assistance to members of the burger kings
family.
Franchise Rules and Regulations
Similar to Mc Donald and Burger king a training is required to become a
Burger king franchisee. 84 days of classroom and on-job- training that includes
a mandatory 80 hours new franchisee orientation, and 7 weeks in- restaurant
training is require as well.
Cost
You must have $1.5 million net worth and $500,000 liquid assets to be
qualified.

14 | P a g e

Pros

Cons

About 11,000 guest


visited burger king each
day around the globe

have your burger


the way you
wanted

cheese is not
the best quality

Health risk is
higher than
Mc Donald and
Burger king.

Summary

Fast Food

History

Locations

Restaurant
McDonald

Training

Cost

Requirement
Established

Over 35,000

in 1955

worldwide

9-18 Months

$750,000
minimum
Liquid.

Wendys

Burger King

Established

6,650

in 1969

worldwide

Established

Around

in 1953

13,667
worldwide

Recommendation

5-6 Months

$500.000
liquid.

3-4 Months

$500,000
Liquid.

15 | P a g e

Based on the examination completed by Rosele Castor, it is suggested that Mr.


Peterson embrace the McDonalds franchise. The average growth per year is
unbeatable. The quality of food is better. First class training planned to help you
succeed. High Standard of people management and communication.

Works Cited
McDonald's publication. "Corporate FAQ". McDonald's Corporation. Retrieved
2012-11-27."MCDONALDS CORP 2013 Annual Report Form (10-K)" (XBRL).
United States Securities and Exchange Commission. February 24, 2014.
"MCDONALDS CORP 2014 Q1 Quarterly Report Form (10-Q)" (XBRL).
United States Securities and Exchange Commission. May 6, 2014.
McDonald Corporation. "McDonalds CORPORATION 10-K SEC Filing".
http://adage.com/article/news/wendy-s-sells-italian-chicken-sandwich-shortfilm/292709
https://www.flickr.com/photos/wafflewhiffer/2191490334/in/set72157603710787135/
urger King-Tim Hortons Merger Raises Tax-Inversion Issue". Wall Street
Journal. 25 August 2014. Retrieved 26 August 2014.

16 | P a g e

De La Merced, Michael (26 August 2014). "Burger King to Buy Tim Hortons
for $11.4 Billion". New York Times (United States). Retrieved 26 August 2014.
Cordal, Ina Paiva; Walker, Elaine (28 October 2010). "Burger King Ousts top
staff". Miami Herald. Retrieved 19 January 2011.[dead link]