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brief history of McDonald's
• McDonald's is a restaurant that everybody knows. The first
McDonald's was built in 1940 by the McDonald brothers
(Dick and Mac), who opened a drive-in restaurant that
specialized in hamburgers and milkshakes.

The McDonald brothers ( Dick

right and Mac center )
discussing plans with an
• They later met Ray Kroc, who bought out their
hamburger business and renamed the franchise
McDonald's System Incorporated.
• In 1954, Ray Kroc became the first franchisee
appointed by Mac and Dick McDonald in San
Bernardino, California. McDonald's franchises grew
swiftly: by the end of the 1960s, there were more
than 1,000 across the U.S. The first international
franchise opened in 1967 in British Columbia


• In 1957, Quality, Service, Cleanliness and Value (Q.S.C. &
V.) became the company motto.
• In 1963, Ronald McDonald made his debut as a way to
attract more children and families.

• In 1970, McDonald's created more characters; the Ham
burglar, Grimace.

• N
• This wonderful phrase echoes around the world 50 millions
times a day, in 30,000 locations, in multitude of
languages, in more than 120 countries around the globe.

• And this simple thought sums up the reason McDonald's has

become the best known and most popular quick service
restaurant around the world, quite a tribute to Ray Kroc,
who founded this company nearly 50 years ago with the
simple vision expressed by his phrase 'Take good
care of those who work for you , and you
will float to greatness on their
achievements ‘.
We provide our customers with the quality of our great tasting
food; our fast, friendly service; our clean restaurants and
facilities; the value of our food and the McDonald's experience.
• McDonald's restaurant still in
• Key people James A. Skinner (Chairman) & (CEO).

• Revenue ▲ US$ 22.6 billion (FY 2008)

• Operating income▲ US$ 6.51 billion (FY 2008)

• Net income▲ US$ 4.31 billion (FY 2008)

• Total assets ▲ US$ 29.2 billion (Q2 2009)

• Total equity▲ US$ 13.2 billion (Q2 2009)

• Employee s 400,000 (2008)

McDonald ’ s Pakistan
McDonalds first opened a store in Pakistan in September 1998, in Lahore.
Since then they have opened seventeen new stores through Pakistan. Today
millions of Pakistanis place their trust in McDonald's everyday to
provide them with food of a very high standard as well as good service.
In the past five years, the response to McDonalds coming to Pakistan has
been overwhelming.
 Lakson Group Companies
 Today has taken over McDonalds Corporation, USA and a
local partner making it a 100% owned and operated
Pakistani company. McDonalds located in Pakistan are
currently employing about 1,000 Pakistanis and each store
is managed by Pakistani managers. They have also
contributed in other ways than food service. McDonalds has
investment of over Rs 300 crore in the country and
payment of taxes and duties amounting to more than Rs
100 crore. Since McDonalds is doing so well in Pakistan they
will continue to grow and add more stores in more cities in
the future.


• A lush green park location in the beautiful F-9 Sector in

Islamabad has been designed and developed and is
maintained by McDonald’s. Covering an area of about 5
acres, the park was inaugurated in residents of the
capital city, who visit it regularly for jogging and
sightseeing, while kids have a great time on the swings.


• McDonald’s has developed and maintain Defence

Recreational Park in DHA, Lahore, making it one of the
city’s most popular and attractively landscaped parks.
• Karachi :
 McDonald’s, along with Defence Housing Authority, has adopted
the park around Corniche, Seaview. Its maintenance and
beautification is done by McDonald’s as a social responsibility and
community service. A beautiful additional to the Clifton beach, it
has become a recreational facility and an option for people who
don’t want to go out on the sand.

• Ronald McDonald Field Programs
 The world’s most popular character, Ronald McDonald, frequently
visits the paediatrics department of local hospitals to entertain
sick children and distribute gift among them. His visits to various
schools and orphanages are always eagerly awaited by children.

• McSaviors Public Awareness
• To make people realize that the world’s natural resources are fast
diminishing and something must be done about it, McDonald’s has
created a public awareness program called ‘McSaviors’. Launched as
a special initiative on the part of McDonald’s to protect the
environment, ‘McSaviors’ involves children as they are going to be
in charge of the future.
• ‘McSaviors’ children are empowered to penalize adults found wasting
water and electricity. The minimum penalty amount is Rs. 10.
McDonald’s will use the penalty money to promote measures that
will prevent further wastage, such as replacing regular bulbs
with energy savers, repairing leaking water supply lines, etc.
The program has been launched in association with the express

• M cD O N A L D ’ s C E L E B R A T E S T E A C H E R S D A Y
M cD O N A LD ’ s ce le b ra te s te a ch e r’ s d a y.
M cD O N A LD ’ s o ffe rs h is co stu m e rs w ith g re a t d e a ls in ra m a d a n .
M cD O N A LD ’ s ce le b ra te s e id d a y w ith h is co stu m e rs like h is
fa m ily.

• M cD o n a ld ’ s visio n is to b e th e w o rld ’ s b e st q u ick se rvice

re sta u ra n ts exp e rie n ce .
• M cD o n a ld s is co m m itte d to m a in ta in in g a n d d e ve lo p in g th e b e st
fo o d p ro d u cts in th e q u ick se rvice re sta u ra n t m a rke t.
• In o rd e r to d e live r th is, th e co m p a n y h a s m a d e a n u m b e r o f
co m m itm e n ts to fo o d sa fe ty a n d n u tritio n .
• Le a d th e Q u ick S e rvice R e sta u ra n t m a rke t b y a p ro g ra m o f site
d e ve lo p m e n t a n d p ro fita b le re sta u ra n t o p e n in g s, a n d b y
a ttra ctin g n e w cu sto m e rs. In cre a sin g sa le s th ro u g h p ro m o tio n s
w ille n a b le th e m to co n tin u e th e ir p ro g ra m o f exp a n sio n .
• M cD o n a ld s h a ve a n o b je ctive to co n tin u a l e n h a n ce a n d im p ro ve
th e ir m e n u . T h is w ill b e tte r sa tisfy th e ir cu sto m e rs a n d g ive
cu sto m e rs m o re re a so n to visit. M a n y id e a s fo r n e w ite m s o n
th e m e n u co m e fro m th e fra n ch ise e s re sp o n d in g to cu sto m e r
d e m a n d . C o n su m e r ta ste s ch a n g e o ve r tim e a n d M cD o n a ld s
h a s to re sp o n d to th e se ch a n g e s.

 "McDonald's vision is to be the world's best quick service
restaurant experience. Being the best means providing
outstanding quality, service, cleanliness, and value, so that we
make every customer in every restaurant smile."


 McDonald’s core competency is providing convenience when people
need and want to eat fast food at prices that are competitive and
provide best value for the customer’s money. One of McDonald’s
competitive advantages is its focus on consistency of quality,
production of food and use of raw materials all around the world.
The world recognition associated with the brand McDonald’s itself
is also one of McDonald’s competitive advantages.


McDonald's Pakistan has an aggressive plan to expand in all
other cities of Pakistan and is rapidly growing with the focus to
provide friendly and a quick service restaurant experience to its

• McDonald ’ s FRANCHISES
• Becoming a McDonald's franchisee is not for everyone. You'll
need a significant financial investment, a habit of hard work,
a long term commitment and a hands-on approach to
running a customer-orientated business.
• Although your work will be rewarding both financially and
personally, don't think of a McDonald's franchise as a
licence to print money. The rewards are certainly there, but
they're for the earning, not the taking. And if you're looking
for an investment where you can sit back and not be
involved, this isn't for you. We're not trying to put you off -
we just want you to be aware of some of the realities before
you go further.
• Like we said, a career as a McDonald's franchisee is not by any
means for everyone. Equally, we don't accept just anyone
either. Ideally, you'll already have a successful business or
career and will have demonstrated significant team
• There's more to running a McDonald's franchise than serving
burgers and french fries - much more. You'll need a
remarkable aptitude for connecting and communicating with
people. You'll be completely committed for at least 20 years,
with no other business interests. And we only offer
franchises to individuals although many of our franchisees
run their businesses as husband-and-wife teams.

M cD o n a ld ’ s F R A N C H IS E
CAn esOeadSgtouTidpero, vi
th e co st o f a n a ve ra g e re sta u ra n t is £ 2 0 0 , 0 0 0 . Yo u w ill
d e a t le a st 2 5 % o f th e va lu e a s u n e n cu m b e re d fu n d s, th e
re m a in in g 7 5 % ca n b e fu n d e d th ro u g h a b a n k lo a n w ith fa vo u ra b le
fu n d in g te rm s.
T h e re 's a lso a o n e - o ff fra n ch ise fe e o f £ 3 0 , 0 0 0 a n d a tra in in g d e p o sit
o f £ 5 , 0 0 0 w h ich w ill b e re fu n d e d w h e n yo u co m p le te yo u r tra in in g .

T h e re a re a lso o n g o in g fe e s. T h e se in clu d e :
- Monthly rent on the premises , based on sales and profitability
( usually about 12 % )
- Service Fee for use of the McDonald's system - 5 % of sales
- Contribution to national marketing spend , currently 4 . 5 % of sales .
• O th e r R e q u ire m e n ts to O p e n a
M cD o n a ld 's
• Significant business experience - Individuals who have
demonstrated successful ownership or management of multiple
business units or have managed multiple departments.
• Rapid growth - Individuals who possess the capability to grow
rapidly with McDonald's.
• Business plan - The ability to develop and execute a business
• Manage finances well - Ability to manage finances including a
thorough understanding of business financial statements.
• Good management skills - Commitment to personally manage the
day-to-day operations of the restaurant business.
• Training - Willingness to complete a comprehensive world class
training program and become proficient in all aspects of
operating a McDonald's restaurant business.
• Exceptional customer experience - The capability to
effectively manage an organization that recruits, trains, and
motivates restaurant employees who deliver an exceptional
customer experience.
• Good credit history - An acceptable credit history

Ongoing Fees to McDonald's
During the term of the franchise, you pay McDonald’s the
following fees:
Service fee- A monthly fee based upon the restaurant ’s sales
performance (currently a service fee of 4.0% of monthly sales).
Rent - A monthly base rent or percentage rent that is a
percentage of monthly sales. McDonald's usually owns the
property and also acts as the landlord.
• McDonald ’ s COMPETITORS

• McDonalds doesn’t offer just burgers. Their well diversified
menu is also one of the key success factors as most of
McDonald’s competitors are quite specialized:
• KFC in chicken
• Pizza Hut in pizzas etc.
• When it comes to eating out during Ramadan in any fast food
restaurant, the name that clicks to the customers is
McDonald’s. The reason is the affordable deals that they
offer, that seem to beat all others when it comes to
• Another advantage that McDonald ’ s has on its
competitors is the location of its franchises.
• Its main advantage is that it is located in vicinity that is
easily approachable. Secondly it has got in its
surroundings other very attractive places to be visited
by people who want to enjoy their life to the full. These
places are a source of attraction not for the services
they provide but for McDonald’s as well.
At one time, the biggest marketing problem Pizza Hut faced was lunch. As
compared to McDonald’s, its restaurants had virtually no lunch time
sales, and neither did any of it’s pizza competitors. The reason, of
course, is that it takes 20 minutes to cook a pizza from scratch in a
traditional pizza oven, and most people won’t spend that long at lunch
time waiting to be served.
•The increased health concerns of the masses has put KFC at a
great disadvantage because of the word 'fried' attached to
it's brand name which gives an instant idea that the food
would be oily and unhealthy.
•Because of the nature of the chicken segment of the fast
food industry, innovation was never a primary strategy for
KFC. However, during the late 1980's, other fast food chains,
such as McDonald's, began to offer chicken as a menu option.
During this time, McDonald's had already introduced the
McChicken while KFC was still testing its own chicken
•This delay significantly increased the cost of developing
consumer awareness for the KFC sandwich.

• One of the major problems that can be identified with Subway
right now is related to the franchises. Although Subway
has long been named as the number one franchise
opportunity by The Entrepreneur magazine but it seems
that Subway has developed a myopic focus regarding the
franchises. Subway has regional managers who have the
opening of new franchises as their sole aim and their
bonuses and incentives are tied to the opening of new
franchises. These managers at Subway even don't care if
the new franchises are detrimental for the existing ones
and because of this; many of the franchises are becoming
a victim of internal competition or cannibalization. For
example, in Lahore alone, Subway has 20 outlets. Instead of
this, Subway could have targeted Cities like Faisalabad
and explored a new market. Franchise owners believe that
Subway has been irresponsible with allocating the
franchises and uses bloated store sales projections as
part of their sales pitch for encouraging new franchises.
• The opening up of a lot of new stores in close proximities
are also resulting in decline in sales per store because
of which the franchisees are not very satisfies with

•The environment at the Subway stores cannot be compared with
that of McDonald's, KFC or Pizza Hut. The Stores are small and
suffocating and do not even provide the necessary privacy to the
people eating there. Subway has no standard size for any of its
store because of which the sales oriented Franchisees try to fix
them at as smaller a place as possible. This is tarnishing the
image of Subway as an international brand.

•The quality of the sandwiches and standards of cleanliness

at Subway are going down day by day due to the greater and
greater autonomy that franchisees enjoy. The Subway at
Rawalpindi was recently closed down due to quality issues as
The quality of the sandwiches and standards of cleanliness at Subway
are going down day by day due to the greater and greater autonomy that
franchisees enjoy. The Subway at Rawalpindi was recently closed down due
to quality issues as well
• It is easily visible that both the burgers are of same size ,
but the quality and cleanliness is different from each
other .
• McDonald ’ s PLAY PLACE
 Many McDonald's restaurants have included a playground for
children and advertising geared toward children, and some have been
redesigned in a more 'natural' style, with a particular emphasis on
comfort: introducing lounge areas and fireplaces, and eliminating
hard plastic chairs and tables. This has given a new outlook to the
McDonald’s as a quick service restaurant that is still not be seen
on other fast food restaurants.

• An estimated 7,000 U.S restaurants will be rebuilt, relocated
or refreshed as part of the far reaching plan to upgrade
its public persona with updated restaurant designs
intended to boost the bottom line.
• McDONALD ’ s Pakistan wins 3 international awards
and gives the nation a reason to smile.
• Food quality & safety

McDonald's buys and serves the same wholesome foods our

customers use at home, supplied by brand name companies
Canadians know and trust. Essentially, we shop where you
shop - our shopping basket is just a little bit bigger.
It has to be when you're serving millions of hungry
Canadians every day.

McDonald's serves a wide range of quality foods that can

easily fit into individual diet needs based on the
principles of balance, variety and moderation. Our varied
menu and range of serving sizes make it easy to fit our
food into a balanced diet and to create a range of meal
combinations that fall within recommended guidelines for
calories, fat and other nutrients.
At McDonald's, we are committed to doing
what is right, to being a good neighbour
and a valued partner in every community
in which we live and work. At McDonald's,
giving back to the community is more
than simply a commitment -- it is the
foundation upon which our company has
been built.
McDONALD’s is a place where people are
free to talk , weather they are muslims
or non-muslims.
Firstly we would like to point out
that maintaining hygiene and
cleanliness in McDonald's restaurants
is a top priority.
Cleanliness and hygiene is one thing. Exceeding
the standards of cleanliness and hygiene
required by law is another. Fulfilling the
standards expected by our customers is another,
yet again! Therefore, a full understanding of
hygiene requirements and wholehearted commitment
to these responsibilities is essential. Don't
worry though; you'll be given thorough training
on this before you start your first shift.
To achieve our high standards, you'll use of a
variety of cleaning utensils and equipment
together with a range of chemical cleaning
products. Where necessary, protective equipment
will be provided and some work will require the
use of a stepladder (even those hard to reach
places must be spotless!).
• BCG Matrix
• According to BCG Matrix McDonald’s is a star. The reason for this
is its high market growth and high market share in the
Pakistani market. On the other hand KFC and Pizza Hut are the
cash cows because of their low growth rate and high market
share. During past some years KFC and Pizza Hut have lost
their market growth because of the fact that they lost their
standard war to their competitor i-e McDonald’s.
• Another direct competitor of McDonald’s is Subway. According to
BCG Matrix it is a dog. Some of the reasons that are
responsible for its low market share and low market growth
are the less expansion strategies being followed by the
company. Secondly they are not focusing at all on all the
major cities; rather they are only focused on the target
segments of Lahore and Karachi.

Product life Cycle Analysis :
In the Pakistani market McDonald’s has been placed in the
growth phase as it is still growing and has the potential to
grow further. There are many strategies that have been employed
in the other countries but are still to be made a part of the
McDonald’s franchises in Pakistan.
Following are some of the strategies that can be made a part
of the Pakistani market so as to increase its market growth:
•McDonald’s in Pakistan can introduce breakfast in its menu to
cater to the needs of those who are in a hurry to get to
office in time. This will give them an edge on its competitors
and its growth will increase.
•To gain advantage in the local market, McDonald’s should
introduce coffee at all the franchises.
•To maintain its brand image as a twenty four seven customer
restaurant, McDonald’s must make its timings more flexible to
the needs of those who are usually very busy with their work

• McDonalds has been able to maintain its market share in
the QSR market of Pakistan since 1998 and this is
actually the major strength of McDonalds that has made
it so popular. Other major strengths are listed below:

• The reputation of the various products each season
has made it possible for the company to attract
customers having different tastes and to try out the
season specialties. A major strength is the various
deals that McDonalds offers so that it could be
made affordable. Recently McDonalds offered a deal
for Rs.85 only, containing a beef burger along with a
• McDonald’s offers many flavors of Mcflurry ice cream
from a mix of M&Ms to Oreo cookies. The M&Ms
flavor was introduced about a year back and is still
popular among the M&Ms lovers. McDonald’s has
also customized its meal according to the tastes of
Pakistan. People in Pakistan do not eat bacon so
McDonalds does not offer such sort of meals in the
•Social Responsibility :
The social responsibility acts of McDonald’s are commendable. It
has been able to maintain a reputation as a socially responsible
and aware enterprise all over the world. Its practice of going
green and serving in an environment friendly way has made it
possible for McDonald’s to gain fame.
On 27th March’ 2008, McDonald's announced that it is giving
further backing to Rainforest Alliance certification by offering
a cup of tea with a conscience in all of its 1,200 restaurants in
the UK.
In Pakistan however, McDonald’s has not yet come up with an effort
that can show the company’s goodwill towards the masses here. Like
KFC, McDonald’s should also involve itself in educational and
social activities so that people should know that McDonald’s isn’t
yet another business oriented corporation aimed at just making
money but it actually care
Employment Opportunities :
The equal employment opportunities regardless of race, color, sex,
national region, age, disability etc are offered to people. People
looking for jobs can also upload their CVs online.
McDonalds has gained recognition worldwide. The chain is
present all over the world in more than 122 countries. In
Pakistan a large number of franchises are present, majority of
them in Karachi and Lahore and McDonald’s is regarded as a
symbol of value and quality for your money.
McDonalds has always ensured a friendly environment to offer to
its customers. Children love going there, having a happy meal
and the toys that they get as a gift. Play places also serve as
a significant attraction where children can go and make friends
and play. Employees are also very polite and they are always
ready to serve you in every best possible way that they can.
Party celebrations
McDonald’s offers its clients, especially children to celebrate
their birthdays there. One can invite friends, they decorate
the party area, various party games are organized along with
face painting activity etc. Children are provided with an
opportunity to celebrate their day in the way that they want
 McDonalds has always ensured a friendly environment to offer
to its customers. Children love going there, having a happy meal
and the toys that they get as a gift. Play places also serve as
a significant attraction where children can go and make friends
and play. Employees are also very polite and they are always
ready to serve you in every best possible way that they can.

 McDonalds and Coca Cola are official global partners. Coca cola
is a big brand nameserving people all over the world with


 McDonalds offered special deals to its clients with up size
meals who are the users of a particular company such as Warid.

Product Variety :
McDonalds needs to develop more and more products to stay in
the competition. After the opening of international QSRs in
Pakistan, many local QSRs have also been opened in various
cities. The tastes are a bit different but they too are offering
chicken and cheese burgers, drinks and fries at competitive
prices. This situation requires McDonald’s to be more innovative
and price competitive.
More advertising :
In Pakistan, McDonald’s rarely advertises at TV, however
billboards often show off juicy McDonald’s burgers but this
could affect its popularity in future. It definitely needs to
advertise more to reach the target and the potential customers.
Drive - ins :
The service at McDonald’s drive-ins has been subject to criticism all
over the world and a lot of people complaint that the orders are
either missing some of the items or are entirely wrong. The service
time at the drive ins is also subject to great variations and needs
to be improved

Reasonable Prices:
 McDonalds can broaden its market by offering meals at more
competitive prices in comparison to other local QSRs such as
AFC, Al Maida etc. This way it could get hold of the potential
customers too
 Opportunity to be innovative
 McDonalds could make itself more innovative by offering
deals that appeal more to Pakistani consumer’s e-g it can
introduce desi flavors in the present products such as
Barbeque, Tandoori, Masala and other spicy tastes which are
staple of the country.
 Breakfast and special noon meals :
• Now in Pakistan most the trend of women going to work and
opting for profession is increasing as a result of which
they are running short of time to carry out all the home
chores along with their work. McDonalds can offer deals to
such market by catering them in the morning for breakfast.
• During the office hours people mostly go out for their lunch
to restaurants. McDonalds can avail this potential market
Growing dinning out Market
In Pakistan the dining out trend is increasing especially in
youngsters and upper middle class. McDonalds has the
opportunity to grasp this market quite well. It is already
doing well by serving them but it could arrange various
activities for the people of this age.
Dine in Cafes
McDonalds can open up with small-sized cafes for the teenagers
in their universities and colleges.
McCafe ’ s :
McDonalds has opened coffee shops by the name of McCafe’s in
UK. Pakistan can serve as a new potential market for these
 More health conscious customers :
 With increasing awareness about food and the importance of a balanced
diet, people are opting for low calorie food e-g salads and food with
high fiber content. To remain in the scope, McDonalds needs to serve
this market as well as the present customers, this could be posed as a
threat to McDonalds. Subway is offering its low fat veggie and chicken
sandwiches at prices almost the same as McDonalds. For McDonalds diet
meals could be a way out of this situation. Until now, McDonald’s in
Pakistan has nothing to offer to health conscious customers.
 Foreign as well as local competitors :
 In the growing market QSR market of Pakistan McDonalds
competitors are entering not only from other countries but
from within the country too. Their competitive prices could
be a reason due to which McDonalds can lose its share in the
Pakistani market.
 Changing customer styles :

Pakistani culture has been changing for years now with new
te ch n o lo g ie s a n d tre n d s. Pe o p le w h o a re n o t b ra n d lo ya l
m o ve w ith th e ch a n g in g tim e s. S o m e co m p e tito r ca n e a sily
e n te r in to th e m a rke t a n d m a ke b e tte r o ffe rs to its
co n su m e rs b y fo cu sin g o n th e ir n e e d s a n d th e sa tisfa ctio n
th a t th e y w a n t. To re m a in co m p e titive , M cD o n a ld s n e e d s to
b e in n o va tive a n d sh o u ld ch a n g e a lo n g w ith th e Pa kista n i
co n su m e r style s.
Public purchasing power is less.
Security Concerns.
Religious Concern, that McDonalds are backed by
Jews Zionist.
People make rumors that they are not providing
Halal meat.

 McDonald’s is one of the best fast food restaurant in the whole
world. It provides a good quality and hygienic food to its
customers daily. If a person has enough resources to meet the
requirements of McDonald’s he must get its franchise, it will be a
financially rewarding and life-changing experience