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Subject: MacDonald’s Franchising Opportunity in New York

The United States is the land of opportunity especially in the fast food industry and janitorial services. After a thorough analysis of the prospects of staring a successful Franchise in U.S, I have come to conclude that starting a Franchise with MacDonalds will assure you of business success. The fast foods industry has a high competition but the market base is big, and you will need to exploit the untapped potential by providing better, quality and fast services. You will expect competition from such parallel franchise companies as Blimpie, Subway, Jollibee Foods, and Starbucks among others.

Recommended Requirements for a Successful Business Franchise

i. Ensure that all legal business requirements are met to ensure that the business is a success

ii. Conduct a market survey for the best business location for the Franchise

iii. Conduct a financial survey that will project a budget estimate that will help you start the franchise

iv. Analyze the best Franchise company to buy franchise membership

Conclusion

Based on the vast requirements needed to set up the business, I have conducted a market survey, financial requirements, and legal obligations that will enable you to set up the Franchise. By following the conducted survey results, I believe you will be able to decide on the best course to take and the most viable Franchise to buy, as well as starting a business that will make the profit.

Executive Summary

Franchising has become the new business trend in the United States especially for businesspeople who want to expand their operations. It is much cheaper to join a franchise than to start a new business from scratch. McDonald's is a fast-food chain corporation in the United States and one of the largest in the World. The company has created a fantastic brand that many Americans have come to associate with. It has more than 30,000 restaurants, and fast food retails selling in over 100 countries globally. McDonald's Menu is friendly, and the company has a huge customer base because customers get value for their money. Her estimated brand value is worth $97.7 billion forming a 10.8% market share as at 2016.

Introduction

McDonalds Corporation has been a dominating force in the U.S market for decades, with her franchise expanding to over 100 countries globally. She operates as a food chain that offers quality brand to traders at a quality price and market protection. She offers modern diversified foodstuffs such as McNuggets, French fries, Chicken Maharaja, and Iced tea among other does of diversified fast foods that cater to all customer wants. The brand that McDonalds has created over the years has helped many Franchise buyers thrive within a short period. Between 2014 and 2016, McDonald recorded a job growth +14.9% for chefs and head cooks, +5.2% for bartenders (Fuller, 2017). However, she has recorded a 10.8% growth in overall global expansion for her franchise food chains. She offers relatively low prices in the buying of her franchise and massive market support regarding research and expansion details ensuring that her clients get the best business setup to meet the high demand for her products. Moreover, McDonald's operations are well tested, and that is why she has managed to dominate a fair section of the food-sector market (Lombardo, 2015). A recent survey has shown that despite the high competition from rival franchise lines, McDonald's is still making massive profits through her brand and provision of quality and customer friendly prices.

Goals/Objectives

The business starting process will look at implementing the following goals and objectives; First of all, it will look into accomplishing the aspect of purchasing McDonald's brand and franchise in its operations. Based on the market survey conducted, New York will form the best business location for the business due to the friendly business taxation laws and huge market base for fast foods. The use McDonald's brand will help the company cover a huge market base. The second objective is to join the franchise with least costs and maximum benefits in the operation of its franchise lines.

The third objective will be to cover a significant market base that is unexploited in New York and ensure the stability of the business. Fourthly, a thorough analysis of the financial and legal requirements for the business when purchasing McDonald Franchise will be made to ensure that the business complies with all requirements (Rodrigues, Nikhil & Jacob, 2016). Understanding of legal requirements for franchise operation is important as it will help the business avoid legal suits that can be avoided. The final objective is to make a thorough analysis of MacDonald's to ensure that it is the best company forming franchise business relations as well as understanding the pros and cons of joining the franchise business (Webber, 2013).

Pros of Franchising

Some of the advantages that Franchising will fetch your business include tremendous market research benefits. The company does market research for its Franchise partners, and in this case, the best location for setting up the Franchise in New York will be determined at the expense of the company. Secondly, the initial capital to join the franchise is small compared to setting up a new fast-food company. Thirdly, the brand created by the company over the last seven decades will help the business in expanding quickly and customers associating with it well. Moreover, you will be able to enjoy the technology provided by the franchising company for free since you are a member.

In this franchise, you will be able to get better marketing tips, training, and market research benefits that will help you understand the way franchise are run and the secrets that the franchising company employs in retaining its customers and acquiring more from a global locus. The other benefit is that McDonald's will allow the business to receive lower inventory prices compared to other retailers who do not franchise with the company due to higher bargaining power that franchise groups fetch (Webber, 2013). Joining the Franchise will also lead to advertisement benefits which will enable more customers to associate with the business leading to more profits; the risk of starting own business is thus mitigated.

Cons of Franchising

The startup costs for franchising can be high as buying the brand name will require high financial capability. The other disadvantage is that you will be required to pay royalty payments on an annual basis to the Franchise Company to cover for partial expenses in advertising and operational research done by the franchising company (Beere, R. (2017). There will be little, or no flexibility in the type of products to be sold as McDonald's will expect you to sell their established and branded fast foods and other products. Overreliance on the franchise to provide market may lead to business collapse (Webber, 2013).

Action Plans

The first step will be to meet and fulfill all the legal conditions that set up a Franchise or any other business in New York requires. In this case, New York offers a stable business environment and location of the MacDonald’s Franchise there will be a great plan (Lombardo, 2015). The State offers friendly tax benefits for the starting of a business to reduce the burden on businesses. The population in the city is huge, and most people live and work in urban centers forming the perfect market platform to sell McDonald’s foodstuffs (Fuller, 2017). The implementation of the business plan will be easy as most people can relate to the Franchiser.

According to the Franchising laws, disclosure document in New York, the Franchisor must provide details about key employees, management experience, bankruptcy and litigation history, other investments and purchases before fourteen days are over. A contract will have to be signed between the franchisor and the franchisee about the terms of sales being entered into (Rodrigues, Nikhil & Jacob, 2016). Other legal factors include business requirements in New York whereby the products being sold must be of healthy standards, and the business must be legitimate. In this case, MacDonalds will be liable for the legal requirements of the New York government and the setting up of the franchise.

On the other hand, a comprehensive business budget for purchasing the franchise, setting up the stock, annual royalties and estimated profits will be done to determine the viability of purchasing the franchise based on the estimated profits. The other plan is to determine the current market share that McDonald's is enjoying and the ability to increase annual sales for the business franchise using projected financial analysis from McDonald's.

Fig. 1.1 Comparison of McDonald’s Market share (Beere, 2017).

McDonald’s main competitors include Starbucks restaurant, Yumi Brands, Autogrill, KFC Corporation, and Whitebread PLC among others which may not be listed above, as at 016. McDonald's leads her competitors regarding market share marking a 94.32B market cap. This is because she has the lowest price-to-earnings ratio leading to more customer base preferring her quality and affordable products (Webber, 2013). The huge brand name has also contributed positively to her success.

Conclusion

Considering that the pros of starting a franchise surpass the disadvantages, joining McDonald's franchise will be a viable business plan. It will mitigate the risks of starting a personal business and the aspects of meeting massive legal requirements. McDonald's is a famous company with renowned brands of fast foods which will make the starting of the business at New York much more successful. New York has a large market range with much potential for a business with McDonald’s brand to thrive. The business will be able to enjoy free low advertisement costs, using the franchisor’s brand, and free market research.

References

Beere, R. (2017). The Role of Franchising on Industry Evolution: Assessing the Emergence of Franchising and its Impact on Structural Change.

Fuller, S. (2017, July 26). The Advantages of Mcdonald's Franchise. Retrieved from https://careertrend.com/list-6800794-advantages-mcdonald-s-franchise.html

Lombardo, C. (2015, July 31). Disadvantages and Advantages of Owning a Franchise | Samsung Galaxy Blog. Retrieved from https://thenextgalaxy.com/disadvantages-and-advantages-of-owning-a-franchise/

Rodrigues, J., Nikhil, S., & Jacob, S. (2016). Promotional Strategies of McDonalds and Market Effects. Journal of Management Research and Analysis, 3(1), 53. doi:10.5958/2394-2770.2016.00007.7

Webber, A. R. (2013). The Pros and Cons of Franchising. An Introduction to Franchising, 30-49. doi:10.1007/978-1-137-29610-8_3

Webber, A. R. (2013). Legal and Financial Matters. An Introduction to Franchising, 159-188. doi:10.1007/978-1-137-29610-8_9

Memo

To: All Family Members

From: Jing Zhou

Date: November 26, 2017

Subject: McDonald’s Franchising Opportunity in New York

The United States is the land of opportunity especially in the fast food industry and janitorial services. After a thorough analysis of the prospects of staring a successful Franchise in U.S, I have come to conclude that starting a Franchise with MacDonalds will assure you of business success. The fast foods industry has a high competition but the market base is big, and you will need to exploit the untapped potential by providing better, quality and fast services. You will expect competition from such same franchise companies as Blimpie, Subway, Jollibee Foods, and Starbucks among others.

Recommended Requirements for a Successful Business Franchise

i. Ensure that all legal business requirements are met to ensure that the business is a success

ii. Conduct a market survey for the best business location for the Franchise

iii. Conduct a financial survey that will project a budget estimate that will help you start the franchise

iv. Analyze the best Franchise company to buy franchise membership

Conclusion

Based on the vast requirements needed to set up the business, I have conducted a market survey, financial requirements, and legal obligations that will enable you to set up the Franchise. By following the conducted survey results, I believe you will be able to decide on the best course to take and the most viable Franchise to buy, as well as starting a business that will make the profit.

Executive Summary

Franchising has become the new business trend in the United States especially for businesspeople who want to expand their operations. It is much cheaper to join a franchise than to start a new business from scratch. For join a franchise, you only need to pay the franchise fee; you don’t need to do anything after it. They will have their workers come to your city and to remodel the store you want to use as their chain corporation. McDonald's is a fast-food chain corporation in the United States and one of the largest in the World. The company has created a fantastic brand that many Americans have come to associate with. It has more than 30,000 restaurants, and fast food retails selling in over 100 countries all over the world. McDonald's Menu is friendly, and the company has a huge customer base because customers get value for their money. McDonalds estimated brand value is worth $97.7 billion forming a 10.8% market share as at 2016.

 

 

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