Case Study

In 1954 a man named Raykroc visited a small restaurant in San Bernandino, California, where he admired a quick service, which dealt with large number of customers. The restaurant belonged to brother Maurica and Dica Mc Donald, where a small number of meals, low prices and streamlining of activities in the kitchen, increased the speed of customers service.

Raykroc contacted the brothers, from whom he got the permission to use their sales system and name. The first restaurant was opened in 1955 in ILLINOIS which gave rise to the entire chain of Mc Donald's restaurants. Nowadays it is the largest chain of the fast food restaurants with a very established and valuable trade mark. The main drive behind this success and rapid expansion was the franchising strategy, which helped them to easily penetrate new markets and enlarge their target markets. Around 70% of current Mc Donald's restaurants are run by an independent franchises. The first franchised outlet was opened in UK in 1986. Tlowever, there are now over 31,000 Mc Donald's restaurants in 119 countries.

The major marketing moment for Mc Donald's was provided by Raykroc, and the brand continues to be a major success by hard work of its family of employees, suppliers and franchisees. Mc Donald, for years have continued with an extensive advertising campaign targeting children. healthy food and convenience.

Which of the following is not an advantage of franchising to franchisee ?

Continuing cost implication

The correct answer is option (2) - Continuing cost implication