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· Posted on
February 21, 2024

McDonald's needs franchise operators for its next 100 stores

Maccas is vetting franchise operators but turns out not everyone has $1.5 million to own one.

What's the key learning?

  • McDonald's have plans to open up a further 100 restaurants over the next three years. Now, they're looking for franchise operators to run them
  • A franchise is a contractual business model is where an established brand (aka the franchisor) lets an independent business owner (aka the franchisee) use its branding, business model and other IP to run their business
  • In return, the franchisee pays an upfront franchise fee and other ongoing fees to the franchisor

Background: McDonald's are a big deal in Australia. Apart from their delicious McFlurry's and scrumptious chippies, Maccas has over 970 restaurants in Oz and employs more than 100,000 Aussies. 

What happened: Since its inception in the 50s, Maccas has largely been a franchise business. In fact, more than 80% of Aussie Maccas restaurants are owned and operated by individual businessmen and women.  

What else: Now, they've got plans to open up a further 100 restaurants over the next three years. But finding the right operators can be tough...particularly when each one needs to sink around $1.5 million into the business to kick it off. 

So what's the key learning?

💡A franchise is a contractual business model is where an established brand (aka the franchisor) lets an independent business owner (aka the franchisee) use its branding, business model and other IP to run their business.

💡In return, the franchisee (aka the small business owner) will pay an upfront franchise fee and other ongoing fees to the franchisor (in this case, Maccas). 

💡For McDonald’s, the franchise contract stipulates a 20-year commitment, plus a minimum cash investment of $1.5 million. So we can see why this one might take Mickey D's a while.

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