McDonald's franchise - good idea...?

McDonald's franchise - good idea...?

Author
Discussion

456GT

Original Poster:

301 posts

177 months

Friday 5th February 2016
quotequote all
Does anyone here run a McD's (or similar) franchise? What are the difficulties and main pitfalls of such a venture?

Edited by 456GT on Thursday 18th February 11:44

Vixpy1

42,620 posts

263 months

Friday 5th February 2016
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They are really picky about who they let be frachisees, i believe you need to put up a significant amount of capital.

Unlike Burger King, which seem to let anybody do it

LDN

8,905 posts

202 months

Friday 5th February 2016
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I've heard that all in, including leases and setup... it's around one million quid to set up a McD franchise... I'm guessing they will loan you that money though if everything looks good and adds up. Subway is more like 40 grand and not sure about any of the others.

sgrimshaw

7,311 posts

249 months

Friday 5th February 2016
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LDN said:
I've heard that all in, including leases and setup... it's around one million quid to set up a McD franchise... I'm guessing they will loan you that money though if everything looks good and adds up. Subway is more like 40 grand and not sure about any of the others.
I thought I'd read that somewhere too.

Seems like it can be a lot less though (still "a significant wedge" required though) ...

http://www.mcdonalds.co.uk/ukhome/People/Franchisi...


bob-in-toon

423 posts

204 months

Friday 5th February 2016
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If you want to go down that route accept the fact that you will need to be flipping burgers yourself for the first couple of years.. ie McDonalds insist on it

jazzybee

3,056 posts

248 months

Friday 5th February 2016
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I did speak to them briefly at a London franchise show a year or two ago (looking for potential investment opps) and they said they pretty much had all the outlets they needed in the south, and were only currently looking for new outlets in Scotland - and if as the franchise holder, if I was not prepared to move to Scotland they would not be that interested... The person I spoke to was quite dismissive - really did not make me feel like having anything to do with them.

Hoofy

76,253 posts

281 months

Friday 5th February 2016
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Might be worthwhile watching that KFC series as that gives some real insight into a fast food franchise.

purplepolarbear

468 posts

173 months

Friday 5th February 2016
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If you take on a franchise like this what are you allowed to decide for yourself (and hopefully achieve a profit from your business skills)? Obviously you can't change the menu and start serving fish and chips but can you do things like decide staffing levels and how much you pay them or is all this dictated by McDonalds?

Quikcurl

381 posts

155 months

Friday 5th February 2016
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KevF is a McDonalds Franchisee I think, PH East Anglia runs often meet at his place near Norwich Airport.


Frimley111R

15,537 posts

233 months

Friday 5th February 2016
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My friend manages the operations of a franchisee with 3-4 McDonalds. The latest one they built cost £6m. License to print money obviously but I'd imagine they are over run by people wanting to do this.

JamieBeeston

9,294 posts

264 months

Friday 5th February 2016
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Also when I looked in to this, you had to have no other business interests elsewhere full stop, so you'd need to divest everything else, and you have to work in store and do every job before you qualify (ie fry cook, cleaner, server etc)

Capital isnt so bad, you need 25% cash iirc with the rest being on finance..

LDN

8,905 posts

202 months

Friday 5th February 2016
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Subway is a lot cheaper to get going as is Dominoes. Dominoes benefits from a brilliant phone APP and ordering system that I suppose all franchisees are plugged into.

BoRED S2upid

19,643 posts

239 months

Friday 5th February 2016
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anonymous said:
[redacted]
I heard £200k but that was 10 years ago or that may have been the cash required. Licence to print money though when did you ever see one go bust?

Jasandjules

69,825 posts

228 months

Friday 5th February 2016
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Wow and around 30% of your sales to them ?

BigBen

11,610 posts

229 months

Friday 5th February 2016
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BoRED S2upid said:
anonymous said:
[redacted]
I heard £200k but that was 10 years ago or that may have been the cash required. Licence to print money though when did you ever see one go bust?
There was one on the Madingley Road into Cambridge that is not there now and it was fairly new. But that is the only one I can think of.

Pints

18,444 posts

193 months

Friday 5th February 2016
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What about a Subway instead?

Yacht Broker

3,158 posts

266 months

Friday 5th February 2016
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i have some clients who are present and past franchise holders... it's quite illuminating!

it is scarily a bit like a religious cult... you become part of the 'family' and live and breathe mcd's... apparently the annual global conferences can be quite o.t.t. but i guess that's the american way. lots appears to be done on trust and a handshake.

if you decide to 'cash out', apparently they will normally buy your franchise back from you but from the moment you say you want out, you will be dead to them and you will probably hear very little (if anything) until the money drops in your account. your staff in-store will probably know more about what is going on that you will.

having said all of that, my clients had very little bad to say about the whole thing and it can indeed be a licence to print money IF you can get yourself a good territory (which is harder than you might think as many large areas are 'taken' by some of the larger franchise holders).

mcd's have done really well through their 24hr opening, breakfasts and good quality coffee (you will not believe how much investment they have put into their coffee to try and pull the rug from beneath starbucks, costa & co). if you can have a restaurant that is open 24/7 there is no closing down or opening up inefficiencies to contend with.

one of my clients has now jumped into dominoes in a big way and that seems to go going really well for him.

Nickyboy

6,700 posts

233 months

Friday 5th February 2016
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Burger King want minimum £1m start up with guarantee of opening 2 or 3 units within 5 years or something along those lines.

POORCARDEALER

8,523 posts

240 months

Friday 5th February 2016
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mcDonalds in Dewsbury westyorkshire shut down after 20 years + trading...the franchise holder owns others too

anonymous-user

53 months

Friday 5th February 2016
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Frimley111R said:
My friend manages the operations of a franchisee with 3-4 McDonalds. The latest one they built cost £6m. License to print money obviously but I'd imagine they are over run by people wanting to do this.
No, it didn't cost £6m, from the ground up it wouldn't cost 1/6th of that unless it was the size of a football pitch.