L
ast Will and Testament of Aunt Maddy
Y
our Aunt Maddy, the “Franchise Queen” has unexpectedly passed away and left you enough
money to buy a franchise. Her will stipulates that you must compare two franchises and write a paper
about which you choose for her lawyer to read. If your paper is acceptable, the funds will be available
for you to buy your franchise. She loved franchises and made a fortune from them – she wants you to
have the same experience!
Remember: Franchises represent an alternative to starting your own business or purchasing an existing one.
Franchisors have an established business plan for their franchisees, offer standard guidelines for new
business owners, and offer training and operational support.
This handout will help you understand the franchisee and franchisor relationship. The handout will also
enable you to explore franchises by using the Internet to select and research two franchise opportunities.
PART A (Background Information):
Information
Franchise #1
Business name
McDonald’s
Source of Information
http://www.aboutmcdonalds.com/mcd/franchising/
us_franchising/purchasing_your_franchise.html
Logo and/or slogan (cut &
paste)
“I’m lovin’ it!”
Mission Statement
McDonald's brand mission is to "be our
customers' favorite place and way to eat." Our
worldwide operations have been aligned around
a global strategy called the Plan to Win
centering on the five basics of an exceptional
customer experience – People, Products, Place,
Price and Promotion. We are committed to
improving our operations and enhancing our
customers' experience.
Existing franchise number
30,000+
Founding year
1956
Headquarter’s address
2815 Jorie Boulevard, Oak Brook, IL 60523
Major product categories
Fast food, coffee, salad
Franchise #2
An initial down payment is required when you
purchase a new restaurant (40% of the total cost) or
an existing restaurant (25% of the total cost). The
down payment must come from non-borrowed
personal resources, which include cash on hand;
securities, bonds, and debentures; vested profit
sharing (net of taxes); and business or real estate
equity, exclusive of your personal residence.
Start-up costs
Since the total cost varies from restaurant to
restaurant, the minimum amount for a down
payment will vary. Generally, we require a minimum
of $300,000 of non-borrowed personal resources to
consider you for a franchise. Individuals with
additional funds may be better prepared for
additional or multi-restaurant opportunities. For a
new restaurant there is $45,000 Initial Fee paid to
McDonald's

Yearly 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.


PART B (Abilities & Interests):
Information
Interest in selected franchise
Franchise #1
Have worked for the company 10 years.
Love the food, working with people, and
the general public and providing customer
service.
2
Franchise #2
Owner requirements
An initial down payment is required
when you purchase a new restaurant
(40% of the total cost) or an existing
restaurant (25% of the total cost). The
down payment must come from nonborrowed personal resources, which
include cash on hand; securities, bonds,
and debentures; vested profit sharing
(net of taxes); and business or real
estate equity, exclusive of your
personal residence.
Since the total cost varies from
restaurant to restaurant, the minimum
amount for a down payment will vary.
Generally, we require a minimum of
$300,000 of non-borrowed personal
resources to consider you for a
franchise. Individuals with additional
funds may be better prepared for
additional or multi-restaurant
opportunities.
Your similar background
Also please working
see attached
application!
Experience
at the
restaurant in all
areas.
Your special skills
Great people skills, good cook.
PART C (Consumer Demand):
Information
Franchise #1
Business name
McDonald’s
Name recognition (how well
known)
Extremely strong brand name
recognition (nat’l& int’l)
Strong current product
demand, intro’d coffee.
sStsSServesServes
Continued strong demand,
company introducing new
products and promoting brand
a great deal.
Product demand (current)
Product demand (future)
Product demand (seasonal)
Shakes, pies, etc. for ‘holiday’
Quality products (Good,
Better, Best)
Good
Franchise #2
PART D (Market Competition):
Information
General Price comparisons
(Good, Better, Best)
Similar products
Franchise #1
Good – McDonald’s is
competitive.
Burgers, chicken, fries,
‘dessert’ Salads
3
Franchise #2
Three major competitors
Burger King, Wendy’s, Taco
Bell
PART E (Provided Services):
Information
Building design/construction
Financing
Franchise #1
Murphy said the new McDonald’s will have a
completely new look and design. “We’ll
have an indoor play area and new
contemporary decor. The outside will have a
new design with stone facade, so we’ll look
like the other new McDonald’s buildings that
have been built recently.”
In order
purchase awill
new include
franchise,a atwo-lane
$45,000 fee is
The
newto business
required. This is paid directly to McDonalds
drive-through
and will stay open for 24 hours.
Corporation. The costs of building, equipment and
supplies for the grand opening are paid by the
owner/operator directly to the suppliers. Costs will
vary depending on the location, inventory, and décor.
Since you'll be building from the ground up, all the
signage and landscaping…everything…is paid for by
the franchisee. Local zoning and beautification
requirements will have an impact on the costs as well.
You can expect to spend in the neighborhood of
anywhere from $900,000 to $1,750,000. At least 40
percent of the costs must be in cash, but the balance
can be financed.
Owner/operators of McDonalds franchises
receive their initial training and support during
Management
the first year, and then ongoing support
throughout their ownership with newsletters
Co-op advertising
,cooperative
purchasing, 24-hour telephone
support,
and
field

Ad slicks operations.
Marketing
Site selection


McDonald’s owns and leases
the site and the restaurant building. The
franchisee buys the
fittings, the equipment and the right to
operate the franchise
for 20 years.

Training
National media
Regional advertising

Available at headquarters: 1 week
At local McDonald's restaurant: 12-24
months
4
Franchise #2





Other



Newsletter
Meetings
Toll-free phone line
Grand opening
Internet
Security/safety procedures
Field operations/evaluations
Purchasing cooperatives
This application does not obligate either party in any manner
Please add the e-mail address, DoNotReply@mcdonalds.com to your
contacts/addresses/address book before submitting the application. This will ensure that all
future e-mail communication will reach your inbox.
Franchise Application
* First Name
* Last Name
* Home Phone
* Business Phone
* May we contact you at your business
phone?
Yes
No
* Preferred mailing Address
* City
* State
Alabama
* Zip code
* Social Security Number
* Date of Birth
* E-Mail Address
Spouse's First Name
Spouse's Last Name
* Have you ever been convicted of
anything other than minor traffic violations?
Are you involved in pending litigation?
5
(Max 512 char(s) allowed.)
* Have you or your spouse ever declared
personal bankruptcy? Please explain.
(Max 512 char(s) allowed.)
* Of which country are you a citizen?
Are you fluent in another language?
USA
Yes
No
If YES, which language?
* Last year of schooling completed
High School
Name of college and/or postgraduate
school
Degree
* Occupational Field
* Position held
* Company Name
* Describe duties, number of employees
supervised and responsibilities
(Max 512 char(s) allowed.)
* Have you ever owned your own business
or franchise?
(Max 512 char(s) allowed.)
* Have you ever had a business failure?
(Max 512 char(s) allowed.)
* Current salary, wages, bonus,
commissions (in $s)
* Current dividends, interest (in $s)
Other income from spouse (in $s)
* Total assets (in $s)
* Total liabilities (in $s)
* Net worth (in $s)
* Total non borrowed funds available to
invest
Please make a selection
6
List any hobbies, community activities,
special interests, or other pertinent
information.
(Max 512 char(s) allowed.)
* Are you related by blood or marriage to
any officer of McDonald's USA, LLC?
Yes
No
Yes
No
* Are you or your employer providing
products, goods or services to McDonald's
or franchisees of McDonald's?
Yes
No
* Will you devote your full time to this
business?
Yes
No
* Would you be willing to relocate for a
restaurant opportunity?
Yes
No
Relation's First Name
Relation's Last Name
Relationship
* Are you related by blood or marriage to
any owner of a McDonald's franchise?
Relation's First Name
Relation's Last Name
Relationship
* Have you ever applied for a McDonald's
franchise? If so, where and when?
(Max 512 char(s) allowed.)
Personal Reference (other than employers
or relatives) First Name
Personal Reference Last Name
Personal Reference Address
Personal Reference Occupation
Personal Reference Telephone
7