HRM Responses to a Changing Environment - Essay Example

In the UK, the company also has a stake in Pret A Manger (www.McDonalds.co.uk). The UK is unusual in having only a relatively small proportion of restaurants as franchise operations. The first English restaurant was built in Woolwich in 1974 and was a product of a joint venture between Bob Rhea (a franchisee from Ohio) and McDonald's. In 1977, this had increased to thirty restaurants, and by 1982 this had reached 200 restaurants. In 1986, McDonald's bought out Rhea's 45% share for $38 million.

Since that time, however, McDonald's UK has only slowly franchised parts of the operation. In 1993, this stood at only 11%, but by 1996 over 20% were franchise operations. McDonald's UK management state that they expect to have closer to 30% being franchises by early in 2001 (Royle, 2000, p. 32). According to the Euromonitor report, the company was operating 1,250 McDonald's restaurants throughout the country. 2003 saw the company introduce a revitalisation strategy, operating on both a global and local level.

For McDonald's in the UK, the issue is no longer simply opening the right type of restaurant in the right location, but also engaging with real issues concerning the local community. The McDonald's business model is slightly different from that of most other fast food chains. In addition to ordinary franchise fees, supplies and percentage of sales, McDonald's also collects rent. As a condition of the franchise agreement, McDonald's owns most properties. Since rent is a fee that is not linked to sales, this practice allows McDonald's more control over its franchisees (Rumbelow, 1 February 2001).

As the world's largest fast food company, McDonald's was the target of criticism on many grounds over the review period. It has been accused of the