Business secrets of McDonald -Global giant fast food company

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Would like to share, the business secrets of McDonald which is known as the Fast food global giant but actually thrive on their Real estate strategy .Let see the chronology of the success ladder. —A lot of people think those fries are darn go...
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Would like to share, the business secrets of McDonald which is known as the Fast food global giant but actually thrive on their Real estate strategy .Let see the chronology of the success ladder.

—A lot of people think those fries are darn good. But to understand what made McDonald's Corp. so successful, you have to look at more than the food orMac's Speedee System or even to Ray Kroc's dedication and business focus. Kroc himself attributed much of the company's success to a man named Harry Sonneborn .
—Sonneborn worked for McDonald's for a mere 10 years, but his real estate policies sealed the fate for the immensely successful company.

—Let's back up a few years to when Kroc and the McDonald brothers were still working together. For some time after his hire, Kroc was struggling to make the business profitable. He wasn't bringing in enough revenue from his franchised restaurants.
—Part of his trouble was in getting the funds to pay for the land and the building for the restaurant. In order to maintain control over operations, Kroc needed to franchise one store at a time, rather than a whole slew of stores over a particular geographic zone, which is what other food chains did . —Although other chains could attract big investors, the franchisees Kroc attracted didn't have the funds to pay for the land and the building.

—That all changed in 1956 when he hired Sonneborn, who convinced him that the real money was in real estate. Sonneborn's idea was to have the McDonald's company lease a plot of land and the building for each restaurant. —The company would then sublease to the franchisee who would run the restaurant. Sonneborn further developed the plan to eventually take out mortgages to own both the building and the land.

—A key element of McDonald's strategy since the beginning has been the policy of the company to own all property on which a McDonald's outlet was built, regardless of whether that location was franchised or company-owned. —Rental income varies from property to property, but it has been estimated that McDonald's generates more money from its rent than from its franchise fees. —McDonald's real estate holdings and rent generated from these holdings are an important component of the company's value and income. McDonald's is unique in the fast-food industry in that it owns much of its real estate. —In most cases, McDonald's restaurants are located on prime high-traffic real estate that is highly visible and easily accessible.

Summary : A fast food company actually thrived due to it's Real Estate business policy.




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