McDonalds franchise is among the leading franchise in the United States and the globe. It has been in the franchising sector for over 50 years and has recorded quiet some commendable contribution and success to the economy of the country. McDonalds franchise has been able to attain the top position in globe in the food service retailing. In other words, it has established over 30,000 restaurants situated in 100 countries.
For any interested or potential franchisee, he or she would have to purchase an operational franchise restaurant. The majority of the franchises that have entered in the system bought the existing franchise in different locations. The purchasing and selling process is facilitated or carried out by the McDonalds. However, in other instances, the McDonald’s franchisee plays the role of selling the existing franchise restaurants.
The term for the purchase of the restaurants is that the franchisee is required to make an initial payment of 40% of the new restaurants and 25% of the existing restaurants. The two percentages are of the total cost of the restaurants. The other terms guiding the acquisition of the franchise is that all the down payment by the buyers should be from their non-borrowed resources. This means that the resources should either be debentures, cash on hand, bonds, securities, business equity and vested profits. For consideration of any buyer, they have to make a down payment of non-borrowed resources ($750, 000). This due to the fact that different restaurant varies in their total cost.
The major requirements for the purchase of McDonald franchises are the monthly fees basing upon the sales performances and a monthly rent basing upon the monthly sales. The procedure for the purchase of the restaurant starts following the down payment of 25% cash and settling the remaining 75% over a stipulated period of two years.
McDonald, M. (2008). Malcolm McDonald on marketing planning understanding marketing plans and strategy. London: Kogan Page.