Fast Food Restaurant - Essay Example

History and introduction

In this world, the largest group of hamburger fast food restaurants is McDonald's Corporation. In 119 nations Mcdonald's attends to approximately 68 million customers on a daily basis (McDonald's). The headquarters of the fast food chain is in America. The firm began in 1940 as a barbecue eatery run by the McDonald brothers Richard and Maurice McDonald. In 1948, the brothers restructured their eatery as a hamburger booth by utilizing the production line concept. In 1955, a capitalist named Ray Kroc became the firm’s franchise agent. He then bought the franchise from the McDonald brothers and managed its global growth. Currently, McDonald's manages more than 31,000 outlets across the world while providing employment to greater than 1.5 million people. Approximately, one in eight people from the US labor force has worked as employees of Mcdonald's.

How Mcdonald's generates revenues?

Any McDonald's restaurant is managed by Mcdonald's itself, an affiliate, or the franchisees. The company's sales are generated through the royalties, rental of property, and charges submitted by the franchisees, and sales are generated from firm-operated outlets.

What does McDonald's sell?

McDonald's sells various burgers and sandwiches such as Big Mac, Quarter Pounder, McArabia, and McChicken. Other than burgers it also sells breakfast items like oatmeal and hotcakes. To make sure that the firm is not criticized for promoting unhealthy eating habits fresh salads, low-fat milk, smoothies, and fruit are also sold.

Categories of restaurants

Most outlets of Mcdonald's provide both counter and drive-through services. The services can be both indoor and occasionally outdoor seating. In 1975, after observing other fast food companies Drive-Thru was started in Arizona.

To adapt to the recent preference for premium coffee and the overall reputation of coffee shops, McDonald's launched McCafé, similar to Starbucks. After making changes to the interior dining areas and facilities certain Australian stores of Mcdonald have observed a 60% rise in sales. By the end of 2003, there were more than 600 McCafés located across the world.

Playgrounds

A few McDonald's are located in out-of-town residential areas and specific cities have enormous indoor or outdoor playgrounds. In 1987 the first “PlayPlace” with the well-known crawl-tube shape with ball craters and slides was introduced in America. Various “PlayPlaces” were constructed afterward. Some PlayPlace areas have been redesigned and converted into "R Gym" areas.

Redesign

In 2006, McDonald's redesigned all of its restaurants. This was the first major change in the interior since the 1970s. The aim of this modification is to become similar to a coffee shop like Starbucks. The changes made include wooden tables, leather cushioned chairs, and lighter shades of various colors such as red, green, and yellow. The restaurants have fewer plastic-made materials and a greater display of bricks and timber. Sophisticated hanging lights create a light glow as the evening arrives. The majority of the eateries now offer free Wi-Fi high-speed internet and LCD TVs. Above all, the well-known golden arches have been altered; the outlets now show halves of golden arches.

The Ireland and United Kingdom business models of Mcdonald's are different than the U.S. Less than thirty percent of eateries are franchised. Most of the eateries are owned by the company. McDonald's provides world-class training to its own franchisees and others at Hamburger University located in Oak Brook, Illinois.

In many other countries, McDonald's outlets are run by joint ventures between McDonald's Corporation and local authorities. McDonald's has a policy of not becoming a supplier of meat, dressings, oil, or other supplies to its franchisees. Instead of supplying on its own Mcdonald's organizes the provision of food and other things to eateries via tested specialized logistics experts.

However, the kind of meats McDonald's utilizes depends on the culture and religion of the host country. For instance, McDonald's franchise was purchased by Shiza Foods in Pakistan and today it used Halal meat (Pakistan’s majority population comprises Muslims who eat meat that has been obtained from animals slaughtered by a Muslim butcher in the Islamic way) which comes from Middle eastern countries. The Palm Oil used for frying comes from Malaysia while the employees are from the local population.

As a result of importing palm oil and meat, the cost of production rises. Furthermore, the Pakistani currency is much more devalued compared to the US dollar hence this further increases the cost of production. As a result, the burgers made are expensive for even the middle-class Pakistani consumer, and the name Mcdonald's is associated with premium quality at an expensive price.

Ownership

McDonald's has been raising shareholder dividends for the last 25 years hence turning itself into one of the “S&P 500 Dividend Aristocrats”.