"McDonald's: The Franchise Factory"

Essay by soal99College, UndergraduateA+, May 2006

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The McDonald's corporation has become an ideal representative of franchising. It's one of a few companies famous all over the world. Their products and services are known to utilized by all types of people and people of all ages. McDonald's is an endless "money making machine" with branch offices in every corner of our planet. Adverts for "mac D" are on TV, magazines, billboards and at sports events, which has positive effect not only for itself and public but also for economic in general. However everything has its darker side too. Such a great phenomenon can have negative effect on licence holders, other businesses, economics and above all on consumers.

Stan Luxenberg describes in his essay taken from his book In Roadside Empires: How the Chains Francised America (1986), how Ray Kroc built the biggest franchise chain in the world from one McDonald's outlet. It began with Kroc selling revolutionary multimixer to the first McDonald´s outlet in California.

The amount of multimixers used by one hamburgerstand surprised him so much, that he went there to find out what was behind it. He discovered a great potential for making big money. He introduced himsel, his ideas and plans, eventually he reached an agreement to try it. Kroc began developing methods, technics, equipment, products and indoctrinate staff. After completion his development, he introduced his ideas and started selling franchises. After few years the amount of outlets had reached one hundred. The success of the McDonald's chain was so huge that the experts started comparing him with Henry Ford. Kroc established McDonald's name, image and reputation to consumers. Its success hadn't attenuated after competitors started copying Kroc's standardised business. His example had become an ideal for other merchants. They had wondered and later introduced his "policy of no surprises" to other business...