Thinking like an economist: The basic vocabulary of the field SLP - Admission/Application Essay Example

THINKING LIKE AN ECONOMIST: THE BASIC VOCABULARY OF THE FIELD I have chosen McDonalds as a franchise because it had proven itself to be a successful outfit around the world with 12,484 units of franchise in the United States as of 2011 and 33,009 locations in all parts of the globe. It had become from its beginnings in 1955 as an internationally-known chain of restaurants specializing in hamburgers, chicken, French fries and other fast-food items. Given their proven methods of doing business, there is no need for sleepless work on research in this business since everything had already been taken cared of by this franchise which had already proven itself as a successful business globally (Entrepreneur, 2011).

There are three fundamental questions in economics which must be answered in relation to this business franchise and these are as follows (Rittenberg & Tregarthen, 2009, p. 9):1. What should be produced?2. How should goods and services be produced?, and3. For whom should goods and services be produced? As regard to the first fundamental question, McDonalds is known to produce hamburgers, fried chicken, French fries, salads and other fast-food food items. The answer to the second question given above is that the fast-food chain produced it in mass through efficient cooking equipment and systems.

All of these knowledge and technology will be provided to the new franchisor as a major benefit (Entrepreneur, 2011). The answer to the third question is that these goods are produced for the mass market around the world. It had proven itself to be a good business since millions of McDonalds hamburgers and other food items had been served in its restaurants located internationally. There is a minimum financial requirement of $500,000 in order for you to be considered by McDonalds and there is a financing option wherein you need to put up at least 25% of the minimum amount required mentioned above.

There is also a 4% monthly service fee charged for the franchise as well as a percentage rent of monthly sales (Subway Franchise Cost, 2011). The trade-off for the high investment are the satisfactory profits you will get from it and the advantage of having this franchise is that there is training at the headquarters of McDonalds for 1 week and also 12 to 24 months of training at a local McDonalds restaurant. The modules would include: Restaurant Management Program, Business Management Program, and Preparing for Ownership.

These modules are designed to prepare the owner to management the restaurant as well in managing it as a business (Subway Franchise Cost, 2011). There is also more support such as purchasing cooperatives, meetings, toll-free phone line, newsletter, grand opening, and field evaluations. A strong marketing support is also provided such as regional advertising, national media, ad slicks, co-op advertising, and restaurant-specific report (Entrepreneur, 2011). In addition, the McDonalds franchise have proven to be a highly successful one with its name as a highly successful brand guaranteed to attract customers and this would mean that there is a good market for the newly established restaurant franchise.

Thus, McDonalds as a franchise is my choice considering the major benefits of high returns compared to my investments. The food processing technology of producing hamburgers, French fries, etc. coupled with the secret recipes of the fast-food items will be shared with me because of the franchise. As mentioned above, the company will support my local restaurant 100% in order to be a successful business and as such I have no doubt that this business will prosper as it had already proven itself globally.

As such, the fundamental questions of economics which concerns the goods to be produced; how to produce it; and for whom these goods be produced are important to be answered for any business and having a franchise for McDonalds is no exception. Thus, it is to my advantage to invest in this business as can be discerned in the trade-off between investments and the long-term benefits of acquiring it.REFERENCESEntrepreneur (2011). “2010 Franchise 500 Rankings.” Retrieved from: http://www.

entrepreneur.com/franchises/mcdonalds/282570-0.html.Rittenberg, L. & Tregarthen, T. (2009). Principles of Microeconomics. Retrieved from: http://www.flatworldknowledge.com/pub/1.0/principles-microeconomics#web-28243.Subway Franchise Cost (2011). “McDonalds Franchise Cost.” Retrieved from: http://www.subway-franchisecost.com/tag/mcdonalds-franchise-cost.