McDonald’s (NYSE: MCD) continues to run impressively. The current policy of the company is to focus its attention on international markets and establish more franchise businesses oversees. McDonald’s plans include selling 21 percent of its fast-food restaurants (about 7,000 out of 31,000) to already established and new franchisees. This strategy of the fast-food industry giant is not exactly a new one, since McDonald has always used a franchise model quite successfully. Earlier this year, it has turned over its company-owned stores to franchisee in the countries of the Caribbean and Latin America. New plans will expand the presence of McDonald’s franchises to hot markets of Russia, India, and China.
McDonald’s brand is very well known in 122 countries, where it serves about 51 million people daily. Seventy percent of 30,000 existing McDonald’s restaurants, offering both drive-through and counter services, are owned and run by local franchisees. In 2006, McDonald’s global sales accounted at more than $56.78 billion. Every year since 1973, this fast-food monster has been ranked number one among other chain restaurants on the U.S. market. In comparison, its closest competitor, KFC, which yielded $14.2 billion in sales in 2006, is four times smaller than McDonald’s.
Depending on a country and a particular location, the total investments required to open and manage a McDonald’s restaurant may range from about $656,000 to $1,225,000. The initial franchise fee is $45,000 for the term of 20 years, after which the franchisee will have to pay additional $45,000 in order to keep his business.