Business memo - Challenges McDonalds faces by establishing franchises abroad
by
patriccia (student)
TO: Franchisees
FROM: Market analyst
DATE: November 27, 2012
SUBJECT: Challenges McDonald´s faces by establishing franchises abroad
Market research and analysis show the successful franchise adaptation of McDonald´s, a leader in the fast-food market for decades, around the world. Owning a McDonald's franchise can be safer than lesser-known franchises. On the other hand, becoming its franchisee oftentimes ties up the entrepreneur’s hands. What challenges does a franchisee face to successfully establish the business in a foreign market?
To help potential franchisees, following is a brief explanation of the benefits as well as the drawbacks of this type of business.
First off all, let´s mention the major advantages to buying a franchise:
- Help with start-up – acquire all the equipment, supplies and instruction or training needed to start the business and running it afterwards from a single source.
- Financial independence and buying power – immensely profitable because McDonald’s has international brand-name recognition and purchases raw materials and supplies in spectacularly large quantities.
- Lower failure rate – according the statistics buying an established concept, franchisees stand an almost 80% chance of success compared to people who start independent businesses.
- Efficient promotion - gives instant access to national marketing including high profile television advertising which keeps customers up-to-date with new products and promotions shared across the whole franchise network.
