McDonald’s Franchising

It’s what’s on the inside

that counts
Regular? Medium? Large? Just how big is your call? 2-3
Let’s clear a few things up 4-5
The learning curve 6-7
CASE STUDY – Paul Crocker, franchisee since 1995
Playing an active role in your community 8-9
CASE STUDY – Gary Adams, franchisee since 2000
The select few 10-11
Our past, the present and your potential future 12-13
Making a difference 14-17
CASE STUDY – Zulfikar Somji, franchisee since 2001
CASE STUDY – Gen Isikgun, franchisee since 1991
Food for thought 18-19
Money matters 20-21
CASE STUDY – Karen Walker, franchisee since 2004
The rewards are there for the earning 22-23
CASE STUDY – Grant Copper, franchisee since 2002
The ball is in your court 24
nuggets of information…
 2 3

Talk to any successful McDonald’s

franchisee and it’s clear there’s a lot
you can get from the role – personal
fulfilment, leading a successful team
of people, financial reward, fun.

Regular? Medium? Large?

Just how big is your call?
You’re a large and valuable part of But to get all of that out, there’s a lot you
your local community, as well as need to put in. Have you got what it takes?

being a small but important part • You’re looking to make a 20

of a renowned global organisation. year commitment.

• You feel you can play an important

role in your local community as an
employer, service provider, and local
business leader.

• You’re energetic and take a hands-on

approach to any task that needs doing.

• Whatever your career background,

you’re a good team leader who can
get the best out of people.

• McDonald’s will be your only business,

and you’re prepared to put in hard
work and possibly long hours to make
it a success.

• You’re an individual or husband and

wife team rather than a partnership
or absentee investor.

• You can meet the financial criteria

outlined on page 20-21

An Agricultural Assurance Programme is in place across Europe which defines the standards and best practice we expect of our suppliers operating throughout our supply chain
 There are a lot of misconceptions about
McDonald’s and about franchising.
McDonald’s is a modern, progressive
burger company dedicated to maintaining
the highest ethical standards. People
believe you need a large amount of
capital to take on one of our franchises –
you don’t. People also think McDonald’s
is a licence to print money – sorry, it isn’t.
Let’s clear
a few things up
If you want an investment that lets you sit
back and not be involved, this isn’t for you.
It’s hands on and hard work. The rewards
are certainly there, but they’re for the
earning, not the taking. What we’re looking
for are people who can outperform the
average. People who can take our proven
system, but make the absolute best of the
opportunities it offers.
Franchising is often misunderstood too.
We give you all the tools and the backing
you’ll need. So you get extensive training
and ongoing support, not to mention the
power of one of the world’s best known
brands pulling customers in. But in the
end, success is up to you. That’s why
we’re looking for a certain type of business
partner: one prepared to follow a proven
nuggets of information… We are launching a new way of presenting nutritional information on a pan-European basis
system – the product of 50 years’ food
service experience. If you’re not good
at taking advice, then don’t become a
McDonald’s franchisee. We don’t expect
you to reinvent the wheel, just to make it
turn faster.
There’s also confusion as to who owns
what in franchising. As a McDonald’s
franchisee, you rent the restaurant
real estate, but purchase the fittings,
equipment and the right to operate it
for 20 years. You also benefit from the
inherent goodwill of the business, the
right to use our brand, as well as our
proven formulas and systems. At the
end of 20 years, you will own a valuable,
saleable asset. The more energy you put
into it, the greater its value will be.
RMHC’s admin costs are paid for
 4 5

by an annual donation from McDonald’s and its Franchisees Over the last three years our menu has changed more than it did in the entire previous 30 years­
 The
learning curve
You’ve probably heard the expression,
‘retail is detail’. Well, we’ve been in the
restaurant business for a long time. So
there are a lot of details to learn with
McDonald’s. We’ll train you to do what
works best. And we’ll be with you all the
way throughout your franchise period
with continued training and support.
nuggets of information… Two of our former CEOs in the UK started on the ‘shop floor’ as restaurant managers
active
To become a successful franchisee, you
need to take on board everything we’ve
learned in over 50 years of successfully
running restaurants. That’s why our
training programme takes about
nine months full-time. What does the
programme cover? The lot. You’ll learn
about all our systems and we’ll train
you to do every role in a McDonald’s
restaurant. And we mean every role.
If the idea of cleaning puts you off, you
might want to stop reading now. At the
end of the nine months, you will have
all the skills you need to take over a
restaurant and start to apply your own
talents to making it a success.
This training period is unpaid and
full-time. This is one of the reasons we
require potential franchisees to have
accumulated some capital. You will need
some financial reserves to be able to
afford nine months’ unpaid training.
You will also need to pay a training
deposit of £5,000 which is returnable
on completion of the training.­
Of course, the support we offer doesn’t
end with the training. You learn throughout
your time as a franchisee. A Business
Consultant is always on hand to give you
advice and support. If they can’t help,
there are the expert teams at Head Office.
We also run regular communications
sessions and meetings. And we distribute
magazines – nationally and internationally
– to share ideas and keep you up-to-
date with current trends, the effects of
legislation, and future plans. You’ll even
get your say in how McDonald’s UK is
run through your representative on the
National Leadership Group. Management
is accessible and they really do listen to
franchisees. So in a small way, you’ll be
able to influence the development of one
of the world’s great brands.
McDonald’s is an equal opportunities employer
 6 7

“
CASE STUDY

You really do have an effect. You’re involved all

”
the way, from coming up with ideas, to approving
campaigns and budgets.

P aul Crocker had run a number of successful petrol station businesses before
taking on a McDonald’s franchise in 1995. He now operates five restaurants in
Kent, with the help of his wife and has consistently outperformed the national
average for sales growth.

“The secret,” says Paul, “is a combination of fine tuning operational performance
and enticing new customers into the restaurant.” He does this by getting out
into the community, and seizing every opportunity there is to sponsor events and
distribute vouchers so that people have an incentive to visit.

“McDonald’s is great if you’re competitive,” Paul adds. “There are lots of measures
to show you how you’re performing regionally and nationally – as well as your own
figures for last week and last year. I just like to beat targets. It gives me a buzz.”

Paul was on the McMarCo committee for several years. It’s made up of
franchisees and senior people from Head Office who jointly decide the Company’s
marketing activity and spend for the following year. “It’s amazing the influence you,
just one individual, can have on the decisions of a big company,” says Paul. “You
really do have an effect. You’re involved all the way, from coming up with ideas, to
approving campaigns and budgets.”

PAUL CROCKER
McDonald’s Franchisee, Kent

We have distributed 1.2 million step counters for children with leaflets that give top tips on how to have fun and keep
 UDY
CASE ST
“
You bring your passion to the job
and to helping the community.
G ary Adams runs a number of
franchises in South London and sits on the
board of his local Business Improvement
District, helping investment in Kingston
Town Centre.
As a lifelong football fan, he and his
staff are actively involved in the FA
and McDonald’s coaching partnership,
dramatically improving the kit and
equipment available for the area’s
youngsters, and increasing the number
of children playing.
”
Gary and his team also get involved in a
large number of other local community
support projects. “For me, it’s one of the
most rewarding parts of being a franchisee.
You can really make a difference. I think
it’s great that one of the first places the
community turns to when they need
support is their local McDonald’s. I put a
lot of effort into answering that need, as
well as going out proactively to offer our
support. It’s fun and I enjoy it, but it also
makes good business sense. After all,
McDonald’s depends on the community
for its customers and staff. Whatever
we can do to build that community
helps us too.”
Gary Adams
Mcdonald’s franchisee, Surrey

Playing an active role
in your community
The people of the local community
are both your employees and your
customers. So it’s good business
sense to get involved and support your
community, as well as a very satisfying
part of being a McDonald’s franchisee.
We encourage franchisees to ‘put
something back’ by involving themselves
and their staff as much as possible in
local events, schools and community
groups, and raising funds for local
charities. In most cases, things which
help improve the quality of people’s lives
at a local level work best. So franchisees
tend to support local community
programmes, usually focusing on family
matters or issues related to the local
environment. Do it right and you’ll
discover that people from local charities
and organisations start writing to you
using your name, rather than addressing
nuggets of information… We have created over 11,500 coaches in partnership with The FA, working through Charter Standard Clubs and local communities
8 9
their request to ‘the manager’. It means
you have earned a credibility that can
only come from having been seen to be
doing things. You’ve earned the trust and
respect of your community.
McDonald’s is a constant presence on the
high street, no matter what the economic
conditions. And that dependability is
something the community values in
difficult times when money is short. It’s
a great feeling to be able to help out the
local people you rely on. And it’s one of
the most rewarding aspects of being a
McDonald’s franchisee.
 The
select few
When selecting new franchisees, we take great care to make sure that we
– and you – feel you’re absolutely right for the business. We’re going to be
partners for 20 years, so it’s important we get it right.

There is a certain type of person we’re
looking for. They’ve already had success
in business or another career, ideally
with experience of people management
and development, sales-building and
marketing. We want you to have achieved
financial stability, as this shows you have
good financial management skills, which
you’ll need as a franchisee. You will
also need your own funds to invest in
the business, and to cover your living
expenses during training.
Because of the hands-on commitment
required to make a franchise successful,
we require you to have no other business
interests. While many of our franchisees
do run their businesses as husband and
wife teams, we will only offer a franchise
to individuals, not to partnerships,
corporations or absentee investors.
You can only apply for one franchise
initially. When you’ve demonstrated you
can make a success of that, there will
probably be opportunities to take on,
or open, more restaurants.
This is a people business. So one of the
most important qualities you’ll need is
the ability to connect with people. You’ll
not only be responsible for developing
your staff, you’ll also be the sort of
person who enjoys meeting customers
and going out into the local community.
The first stage in the selection process
is to complete the enclosed application
form and return it with any relevant
information, such as a CV. If we think
you’ve got potential, we’ll invite you to
meet us. If we’re both still interested,
you’ll be asked to spend five days
working in a McDonald’s restaurant,
so you can find out what it’s like. If you
enjoy the environment and we think
you’re right for it, you’ll then visit
several franchisees. If this goes well,
you’ll come to a final meeting with the
UK selection panel. If we both feel 100%
sure a McDonald’s franchise is right
for you, training can begin as soon as
you’re ready. This training period lasts
nine months.

nuggets of information… Over 550 of our restaurants are franchised Over half our franchisees are former employees We are an international brand, but local
 10 11

This is a people business.

So one of the most
important qualities you’ll
need is the ability to
connect with people.

people run our restaurants

nuggets of information… In 1976 the first TV advertisement was broadcast
Over the last 3 years our menu has changed more than it has in the previous 30 years
In 1983 the 100th restaurant opened In 1986 John King became McDonald’s first franchisee in Hayes, Middlesex McDonald’s is a major sponsor of Euro 96
 Z ulfikar Somji believes working with
the community and building local contacts
makes a winning difference to McDonald’s
image. McDonald’s ‘Just Bin It’ litter-busting
campaign had been a part of his community
activity calendar for four years before he won the
national Just Bin It title. He won the prize for the
many links he forged with local councillors, editors
and community partnerships.

But what stands out for Zulfikar are the links

with the local schools, and the sense of pride his

“
management and staff get from what they
have achieved within the local community.

People were happy to give their money to McDonald’s

”
to forward to this appeal, which I think demonstrates
a great deal of trust in the Company.

He and his managers get involved with education at many levels, talking
to business students about franchising and self-employment, and helping
with interview techniques. They also volunteer as reading partners for local
children with reading difficulties. Their award from the local borough for
their commitment to Work Related Learning takes pride of place in the
restaurant.

In a community with many friends and family affected by the Asian tsunami,
Zulfikar’s Forest Gate restaurant in east London quickly became a focal
point for fundraising efforts. Says Zulfikar: “People were happy to give their
money to McDonald’s to forward to this appeal, which I think demonstrates
a great deal of trust in the Company.”
Y
CASE STUD

Zulfikar Somji
Mcdonald’s FRANCHISEE, East london

nuggets of information… We are one of the biggest sponsors of council-provided litter bins in the UK In 2006, we ran over 130 ‘Just Bin It’ community clean-up

At McDonald’s, one of our most
important principles has always been
to support the communities in which we
operate. As a major UK employer, we
can be a force for improving people’s
working conditions. As a major buyer in
the agricultural market we can make a
real impact by encouraging best practice.
events across the country Changes to packaging designs and materials reduced our usage of paper by 78,058 kilograms
Making a
difference
Everything we support or do reflects
McDonald’s strong social stance and
desire to put something back into the
community. In the UK, we set up Ronald
McDonald House Charities in 1989. To
date, the charity has raised over £21
million, and helped to open 10 Ronald
McDonald Houses and 26 Ronald
McDonald Family Rooms near to hospitals
or hospices which allow parents to stay
close to their sick children.
Other recent initiatives have included
promoting ‘energy balance’, with top
class athletes touring schools. This
scheme raises awareness of simple
ways for young people to include exercise
in their daily routines. We’ve also made
fast internet connections available free
to everyone by creating Wi-Fi hotspots
in around 550 restaurants.
14 15
“A company only has
the right to operate
”
in a community when
it is prepared to
contribute to it
Ray Kroc
McDonald’s Founder
McDonald’s also helps people earn a
living while managing their hectic lives.
Our new flexible working scheme enables
any two people to cover each other’s
shifts with no prior notice. It’s particularly
popular with students, parents of young
children, carers and grandparents who
want to continue to work, but need extra
choice over hours. The scheme has
received a lot of positive feedback from
commentators and the Government,
who are looking for ideas to help people
achieve a healthier work/life balance.
It’s not just people we are committed to.
Animal welfare is important too. We only
work with suppliers who adhere to our
high standards, so all our meat comes
from clean, safe, hygienic environments
where the highest levels of animal
husbandry exist.
We reuse delivery packaging wherever possible
CASE STUDY

­­Making a
difference

G en Isikgun has been a franchisee since 1991 when she took on the
Basildon restaurant in Essex. Gen focuses on the accounts and involvement
in the community – what she calls ‘citizenship’. She now has four
restaurants in the county.

“The second one was the hardest,” says Gen. “I couldn’t stop myself going
back to the first restaurant.” But the support from her Business Consultant
and Head Office allowed her to pull through and make a success of it.
“They help you with training in new equipment and new menu items,” she
says, “and the audits on performance really help too.”

For Gen, involvement in the community is key. “Your customers come in

and you get to know them. You want to do something for them.” Gen
found the best way to help was to get involved. So she joined local
business associations and started helping out in schools. Her staff
took part in reading programmes and ‘Just Bin It’ campaigns, while
she provided financial support for achievement awards each year.

It was a parent at Gen’s­child’s school who gave her the idea for her
biggest community support project. The woman’s daughter had a bad
hip. When the young girl was admitted to hospital, her
mother had to spend a lot of time there, often sleeping
overnight in a chair which made her stay extremely
uncomfortable. Under the circumstances the idea
of a house was discussed for parents to stay in.

nuggets of information…  MHC has committed to develop and

R
every night of the year to families
 16 17

“Your customers come in and

”
you get to know them. You want
to do something for them.

Gen applied successfully to Ronald McDonald House Charities for a grant

of £250,000 to build a Ronald McDonald House in the grounds of Basildon
Hospital. The charity had a condition though: Gen had to raise £50,000
locally. She did this by getting the whole community involved: her staff,
suppliers, local business associations and schools. The House opened
in September 2005 allowing parents to have a break and, if the nurses
approve, stay the night.

Successful citizenship, says Gen, is all about being good with people.
You have to meet them on their own level and listen more than you talk.
It also helps if the projects you are fundraising for are local. People like
to see their money will stay in the local community, thereby helping it.

Gen’s husband Ayhan helps her run her franchise and their staff range in
age from 16 to 74. She has mums and daughters working for her, and she
encourages families, as it helps build a family atmosphere in the restaurant.
“Supporting your employees and helping them develop is also essential to
getting good results,” she says. “We always emphasise the quality of McDonald’s
training and the opportunities to work your way up. One mother of six only
took a crew member job for some temporary money. Now, four years later,
she’s a floor manager.” Gen also has three restaurant managers running
restaurants who started over 10 years ago when they were 16 years old.
“If you look after your people, they’ll look after your business.”

gen Isikgun
McDonald’s Franchisee, Essex

support an additional 400 bedrooms at a combined cost of £33 million over the next five years, which will give an overall total of over 700 family bedrooms available
In recent years, we have made every
effort to listen to our customers. We
know they are more interested than
ever before in the food we serve in our
restaurants and where it comes from.
Food for
thought
Our menu is very simple. We use the
same high quality brand names and
household staples that are a part of most
consumers’ shopping trolleys each week.
That means meat, fish, potatoes, eggs,
milk, vegetables and grain. Every day in
the UK, 2 million customers enjoy the
high quality food ingredients that make
our menu range taste so great.
Ensuring our food’s high quality is a
highly trained team of professionals
working closely with supplier partners.
Our raw ingredients have to meet
exacting standards, so we extensively
monitor every detail at our suppliers,
right through to delivery and preparation.
We know consumers in the UK often say
they’re concerned about GM food, so we
don’t use any GM ingredients or food.
Similarly, because nuts are a serious
health risk for many, we’ve excluded
them from our main menu.
The facts speak for themselves. We only
use whole cuts of flank and forequarter
in our hamburgers which is bought from
farms accredited by nationally recognised
Farm Assurance schemes. Nothing is
added: all our hamburgers are 100%
beef.
nuggets of information… We have sold over 21 million Fruit Bags since 2003 and are one of the
Our chickens come from similarly
accredited suppliers who use feed
that is free from antibiotic growth
promoters. In 2004, we reduced the salt
content in our all white breast meat
Chicken McNuggets by 30%. All our
eggs are free range and conform to the
Lion Mark code of practice, as well as
an independently audited, free range
Farm Assurance scheme. We only use
fresh dairy milk in our ice creams,
McFlurrys and milkshakes. Our French
fries are made from only the best
quality potatoes and we’ve reduced the
salt seasoning on serving by 24%.
McDonald’s has been leading the way
in the convenience foods industry in
developing new ways to enjoy traditional
healthy foods. Our salads are an
increasingly important part of our menu
offering and we’ve also introduced a Deli
range, Fruit Bags and Carrot Sticks.
In addition to providing healthy food,
we help our consumers make healthy
choices. We make available nutritional
information and advice on achieving
a balanced diet in all our restaurants
and through community programmes.
 18 19

Every day in the UK, 2 million customers

enjoy the high quality food ingredients
that make our menu range taste so great.

biggest sellers of prepared fruit 76 of our Happy Meal combinations have at least one of the recommended ‘five-a-day’ portions of fruit and vegetables­­
 Running a successful McDonald’s
franchise is financially rewarding.
But what exactly is the deal?
Money
matters
How much does a franchise cost?
How do you raise the money?
How much of your own money do we
expect you to invest? And what other
costs are there? Find out here…
For nearly 20 years, pennies dropped in collection boxes
nuggets of information…
The cost of a McDonald’s franchise varies
according to its potential cashflow, but
they tend to sell for between £150,000 and
£500,000. There are two financial routes
to buying one: the Conventional or the
Business Facilities Lease (BFL). With a
Conventional franchise, you’ll need to put
up at least 25% of the total purchase price
and borrow the remainder. This purchase
price is paid immediately prior to taking
on the restaurant. There is also a one-off
franchise fee of £30,000, and a training
deposit of £5,000, which will be charged
at the start of training and refunded on
completion of the programme.

CASE ST
UDY
“ Sales have gone up substantially ahead of
The BFL is designed to help exceptional
candidates without sufficient funds
to cover the 25% cost of a franchise.
The cashflow of the restaurant is used
to raise sufficient capital to buy the
franchise at some time within the first
three years of trading. You will still need
enough funds to support yourself through
the training period. And we will look for
evidence that you have some ability to
accumulate capital – usually savings of
at least £35,000.
As with any well-run franchise scheme,
there are ongoing fees. There’s a monthly
rent for use of the restaurant premises
to pay throughout the franchise. It’s
based on the restaurant’s sales and
profitability, and averages about 12%. A
Service Fee, set at 5% of sales, for use
of the McDonald’s system, is payable
every month. All McDonald’s restaurants
also make a contribution to the national
marketing spend. Currently, this is set
at 4.5% of sales.
and fundraising in restaurants has enabled McDonald’s to raise over £30 million for RMHC
20 21
the market and employee motivation is high.
”
K aren Walker had never worked for McDonald’s before when she
secured her franchise in 2004 at Bellshill near Glasgow. She and her
husband, who helps to run her franchise, did have plenty of business
experience – in advertising and utility cost management.
Karen feels the big advantage she had was
seeing the business from a consumer’s
point of view. She’s a mum with three
kids, so she had visited McDonald’s
plenty of times. “There’s always a
danger that you get caught up in the
processes and overlook the effect on
the customer,” she says. “I think I’m
less likely to do that.”
As a result, sales have gone up
substantially ahead of the market and
employee motivation is high, with a lot
of staff wanting to take training courses
and progress up the career ladder.
“People development is really important
in this business,” says Karen. “Instilling
pride in what you do so that people take
responsibility for their role – that’s absolutely
key.”
Karen Walker
McDonald’s Franchisee, Glasgow
 A part-time job at McDonald’s turned into
CASE S

“
a career for Grant Copper, who dreamed of
being master of his own destiny. “I could see
TUDY

the opportunities within the Company when

I was doing my A-levels and decided to stay
on,” said Grant, who is the franchisee of a
drive-thru restaurant in Sittingbourne, Kent.

I could see the opportunities within the Company when

I was doing my A-levels and decided to stay on.

Before he moved into self-employment,

”
Grant held several positions with McDonald’s,
including running Company-owned
restaurants and a two-year stint in Slovenia
as a project manager, growing the number
of restaurants there from two to nine.

In June 2002 Grant became a McDonald’s

franchisee. “It felt very different operating
my own restaurant – it was stuff like writing
your own cheques and making decisions that
directly impact your business,” said Grant.
 22 23

The rewards are there

for the earning
The turnover and profit your franchise
delivers will depend on many factors. As
a guide, you might expect to achieve a
return on investment of more than 20% per
annum. That means you should repay your
initial borrowings within five to seven years.
Average profit margins are in the region
of 6-8%, which generates around £90,000
profit per restaurant per year. However,
these returns are not guaranteed. As a
franchisee, you will need to take a hands-
on approach if you are to build sales and
maximise profitability.

Grant agrees that a major requirement Grant’s love for his job stems from working
for success with McDonald’s is engaging with his restaurant teams. “I feel a lot of
with the community, and he welcomes the responsibility for the people I employ in the
opportunity to talk to local people and dispel local community. I know I’m contributing
some of the myths about the business. towards raising their families, or helping
As an active member of local community someone to get through their studies –
groups, including the Sittingbourne Retailers that’s very rewarding.”
Association and the Town Centre Forum,
Grant describes himself as a bit of a
Grant sits alongside local councillors
perfectionist and is constantly challenging
and professionals to comment on local
himself to improve systems. “My main
issues. “A lot of people think what we do
aim is to try and get it right every time,
is very simple. It’s only when they see the
and I believe that everyone at McDonald’s
operation in action that they appreciate the
should play their part in bringing about
detail of what goes on behind the scenes,”
positive changes. When people collaborate
said Grant. “We’re a lot better than other
together they have a better chance of
businesses out there.”
success,” said Grant.
Grant also ensures that his restaurant
GRANT COPPER
teams work with the local council’s
McDonald’s Franchisee, KENT
environmental department in cleaning up
local areas and has forged strong links
with the local Community College, where
his restaurants support student activities
such as sporting events.
The ball
is in your court
Becoming a McDonald’s franchisee is
a big step. It’s a commitment of time
and money to get started. Then there’s
a continuing, 20-year commitment to
hard work as you build and sustain
above average performance. It’s not
for everyone and, before applying,
you should feel sure that it’s
right for you.

McDonald’s doesn’t need your money.

What we do always need, however, are
committed individuals with a proven track
record of success in people development,
people management, sales and marketing.
If you think you have those skills and want
to apply, please complete the enclosed
form and send it to:

The Franchising Department

McDonald’s Restaurants Ltd
11-59 High Road
East Finchley
London
N2 8AW
 ©2011 McDonald’s Corporation 208978
All trademarks are the property of McDonald’s Corporation and its affiliates.
Printed on Hello Silk Paper – fully recyclable and biodegradable