This summary discusses the McDonald’s Corporation and how they achieve success through teamwork and persistence. The McDonald’s Corporation has been in operation for decades and has consistently remained at the head of the pack in all areas of business. In this summary, I would like to share many different aspects of the company, as well as what sets them apart from the rest of the restaurant world. Information covering the history of the company will be shared and I will also discuss the franchise logistics and corporation statistics of the company.
Lastly, I will share the leadership strategy of the McDonalds Corporation. Introduction In this module I have learned a vast amount of information dealing with groups. I have learned what it takes to make a group work and how to best function together. While learning about these processes, my group was inspired to present the group dynamics of the McDonald’s Corporation. There are many areas in which McDonald’s expresses togetherness as well as an efficient business strategy. Throughout this report I will give information on the history, franchise, corporation and leadership of the McDonald’s Corporation.
This corporation is a perfect example of great teamwork in every aspect of operations and they have been able to master the art of franchise inside and out. History The first McDonald’s was originally started by the McDonald brothers Mac and Dick in 1954. The McDonald’s Corporation was founded by Ray Kroc, in 1955. Kroc discovered the McDonald brothers and was impressed with their system and sales he then influenced them to let him take the business to another level (McDonalds, 2010). He clearly knew his way around the restaurant business, because in 1958 McDonald’s had already sold its 100 millionth hamburger.
Ray Kroc had a unique philosophy for the restaurant business; the McDonald’s web site shares, “Kroc wanted to build a restaurant system that would be famous for food of consistently high quality and uniform methods of preparation” (McDonalds, 2010). He wanted to have a product that always tasted the same, no matter where the McDonald’s was located. Ray Kroc had a vision for a business surrounded by teamwork and he quickly promoted the slogan, “In business for yourself, but not by yourself” (McDonalds, 2010). The franchise quickly grew and Kroc provided rewarding notions for franchisees.
Several franchise owners have been the creators for some of McDonald’s most legendary food selections; the Egg McMuffin, Filet-O-Fish and the Big Mac were all ideas of franchisees. To give further information on the McDonald’s franchise I will share many of the company’s statistics, as well as the franchise requirements. Franchise The Merriam-Webster Collegiate Dictionary defines a franchise as “the right to sell a company’s goods or services in a particular area” (1995). Currently, the McDonald’s franchise makes up the majority of the company with an 80% piece of the company.
The McDonalds franchise system is one varying differently from many others in today’s world. A candidate for a McDonalds franchisee would need to have a net worth of $750,000, along with a total investment of anywhere from $1,031,350 up to $2,182,050. The franchise fee for startup is $45,000, as well as a 20 year franchise agreement. Someone interested in becoming an owner is only allowed to take on the franchise as an individual; no partnership, absentee owners, or investor seeking owners are allowed.
The owner of the franchise will be responsible for operating the restaurant. In order for an owner to become an operator of a McDonald’s, extensive training is first given to make sure the individual is prepared to execute activities properly. The McDonald’s Corporation is known for their world class training model which includes in-restaurant training at a nearby location to the franchisee, which lasts 9 to 18 months. Also, the franchisee may attend seminars and conferences, as well as self-directed learning starting at 20 hours per week.
McDonalds currently has a training facility known as Hamburger University, in which franchisees are invited to learn how to be efficient operators of McDonalds. Hamburger University was the first global training center developed by any restaurant (McDonalds, 2010). With concerned owners who are trained to be involved in the franchise, it is easy to see how the McDonalds franchise system remains near the top of their market. McDonalds was rated number 5 in America’s Top Global Franchises in both 2012 and 2013. Bloomberg news shares, “Currently U. S.
McDonald’s restaurants average about $2. 5 million in annual sales” (Bloomberg, 2013). Corporation McDonalds is the leading food service retailer in the world with 34,000 restaurants in 119 countries. They employ 1. 8 million people who serve more than 69 million people daily (McDonalds, 2010). The 2012 annual report showed the McDonalds Corporation had annual revenues of $27. 5 billion with a profit of $5. 5 billion. The global comparable sales growth was at 3. 1 %, earnings per share growth at 5% and average number of customers served everyday at 69 million.
The corporation is found on the New York Stock Exchange, ticker symbol MCD, with a present price of $98. 27 per share (McDonalds, 2012). By the year end of 2010, less than 20% of the restaurants were operated by the corporation and the remaining 80% of the restaurants were operated by franchisees. Out of the 80% operated by franchisees, 59% were conventional franchises and 21% were licensed to foreign affiliates. The business is administered by four distinct geographic areas including: (1) United States, (2) Europe, (3) Asia/Pacific, Middle East and Africa, and (4) other countries including Canada, Latin America and Corporate.
The key to McDonald’s success is strengthening the alliance with their franchisees and suppliers. This gives dependable experiences to customers and an integral part of the community they serve (McDonalds, 2010). The mission of McDonald’s is, “We’re determined to continually improve our social and environmental performance. We work hard, together with our suppliers and independent restaurant franchisees, to strive toward a sustainable future-for our company and the communities in which we operate” (McDonalds, 2010).
Leadership The current Chief Executive Officer of McDonald’s is Don Thompson. He has been with the corporation for more than 23 years. Buisnessweek. com shared Thompson’s salary of $979,167 with bonuses of $1,400,000 and 514,334 stock options, all adding up to $13,751,919 for total calculated compensation (Bloomberg Business Week, 2012). Thompson joined the McDonald’s team as an electrical engineer, designing equipment for food service. He has served many different leadership positions while working for the company.
The mission of Thompson, shared by McDonalds, is to lead the company to become “our customer’s favorite place and way to eat and drink” (McDonalds, 2010). There are many others who help lead McDonalds to their success. Just as every team has many members, even though they may seem small, without every piece the machine does not function properly. At McDonald’s, the fry cooks and janitors are just as valuable as the CEO. Without people to cook the food McDonald’s would never have come this far. Conclusion It is easy to see why McDonald’s has stayed at the top of the restaurant business for so long.
With great training, involved owners and outstanding leadership any business can succeed and excel. A valuable lesson to be learned from the format of the McDonald’s corporation is that money alone is not enough to create a long lasting successful business. There are times when hard work and persistence is the only way to succeed. I have enjoyed learning more about the McDonald’s process and now have a greater respect for their business model. This module will help guide me through my future careers in management, as well as personal relationships.