proposal revise

Date: December 18th, 2017

Subject: MacDonald’s Franchising Opportunity in New York

The United States is the land of opportunity especially in the fast food industry and janitorial services. After a thorough analysis of the prospects of staring a successful Franchise in the U.S, I have the come to conclude that starting a Franchise with McDonalds will assure you of business success. The fast foods industry has a high competition but the market base is big, and you will need to exploit the untapped potential by providing better, quality and fast services. You will expect competition from such parallel franchise companies as Blimpie, Subway, Jollibee Foods, and Starbucks among others.

Recommended Requirements for a Successful Business Franchise

i. Ensure that all legal business requirements are met to ensure that the business is a success

ii. Conduct a market survey for the best business location for the Franchise

iii. Conduct a financial survey that will project a budget estimate that will help you start the franchise

iv. Analyze the best Franchise company to buy franchise membership

Conclusion

Based on the vast requirements needed to set up the business, I have conducted a market survey, financial requirements, and legal obligations that will enable you to set up the Franchise. By following the conducted survey results, I believe you will be able to decide on the best course to take and the most viable Franchise to buy, as well as starting a business that will make the profit.

Table of contents

Introduction Page 4

Goals/Objectives Page 4-5

The Pros of Franchising Page 5

The Cons of Franchising Page 5

Action Plans Page 6-7

Conclusion Page 7

The Westhampton area page 7

Starting McDonald’s franchise page 8

Reference Page 9

Introduction

Franchising has become the new business trend in the United States primarily for businesspeople who want to expand their operations. It is much cheaper to join a franchise than to start a new business from scratch. For join a franchise, you only need to pay the franchise fee; you do not need to do anything after it. They will have their workers come to your city and to remodel the store you want to use as their chain corporation. McDonald's is a fast-food chain corporation in the United States and one of the largest in the World. The company has created a fantastic brand that many Americans have come to associate with time.

McDonalds Corporation has been a dominant force in the U.S market for decades, and its franchise expanding to over 100 countries around the world. McDonald's Menu is friendly, and the company has a vast customer base because customers get value for their money. McDonald’s operates as a food chain, providing high-quality prices and market protection for people in the business. It also offers modern diversified foods, such as Chicken Nuggets, French fries, Chicken Maharaja, and Iced tea among other does of diversified fast menus that cater to all customer needs. The brand that McDonald's has created many years has helped many franchisees buyers thrive in a short period.

McDonald's estimated brand value is worth $97.7 billion forming a 10.8% market share as at 2016. Between 2014 and 2016, McDonald recorded a job growth +14.9% for chefs and head cooks, +5.2% for bartenders (Fuller, 2017). However, it has filed a 10.8% growth in overall global expansion for the franchise food chains. McDonald's offers relatively low prices regarding buying franchises and massive market support regarding research and expansion details to ensure that the clients get the best business set up to meet a high demand for the products. Moreover, McDonald's operations open, and that is why McDonald's has managed to dominate a fair section of the food-sector market (Lombardo, 2015). A recent survey has shown that although the high competition from rival franchise lines, McDonald's is still making massive profits through the brand and provider of quality and customer friendly prices.

Goals/Objectives

The business starting process will focus on the following goals and objectives; First of all, it will look into accomplishing the aspect of purchasing McDonald's brand and franchise in its operations. Based on the market survey conducted, New York will form the best business location for the business because of the friendly business taxation laws and large market base for fast foods. The use McDonald's brand will help the company cover a huge market base. The second objective is to join the franchise with least costs and maximum benefits in the operation of its franchise lines.

The third objective will be to cover a significant market base that is unexploited in New York and ensure the stability of the business. Fourthly, a thorough analysis of the financial and legal requirements for the company when purchasing McDonald Franchise will be made to ensure that the company complies with all requirements (Rodrigues, Nikhil & Jacob, 2016). Understanding of legal requirements for franchise operation is critical because it will help the industry avoid legal suits that one can avoid. The final objective is to make a thorough analysis of MacDonald's to ensure that it is the best company to form a franchise business relations as well as understanding the pros and cons of the franchise business (Webber, 2013).

Pros of Franchising

Some of the advantages that Franchising will acquire your business include a considerable market research benefits. The company does market research for its Franchise partners, and in this case, the best location for setting up the Franchise in New York will be at the expense of the company. Secondly, the initial capital of a franchise is small compared to setting up a new fast-food company. Thirdly, the brand created by the company over the last seven decades, and it will help the business in expanding quickly and customers associating with it well. Moreover, you will be able to enjoy the technology provided by the franchising company for free since you are one of their members.

In this franchise, you will be able to get better marketing tips, training, and market research benefits that will help you understand the way to run franchise and the secrets that the franchising company retain its customers and acquire more from the global. The other benefit is that McDonald's will allow the business to receive lower inventory prices compared to other retailers who do not franchise with the company due to the higher bargaining power that the franchise groups acquire (Webber, 2013). Joining the Franchise will also lead to advertisement revenue which will enable more customers to associate with the business and lead to having more profits.

Cons of Franchising

The start-up costs for franchising can be high since buying the brand name will require high financial capability. The other disadvantage is that you will need to pay royalty payments on an annual basis to the Franchise Company to cover the cost of advertising and operational research had done by the franchising company (Beere, R. (2017). There will be little, or no flexibility in the type of products sold because McDonald's will expect you to sell their fast foods and other products that they established and branded. Over-rely on the franchise to provide market may lead to business collapse (Webber, 2013).

Action Plans

The first step will be to meet and fulfill all the legal conditions that set up a Franchise or any other business in New York requires. In this case, Westhampton offers a stable business environment and location of the MacDonald’s Franchise, which it will be a great plan (Lombardo, 2015). The State provides generous tax benefits for the starting of a business to reduce the burden on businesses. The population in the city is enormous, and most people live and work in the center of the town forming a perfect market platform to sell McDonald's food. (Fuller, 2017). The implementation of the business plan will be smooth since most people can relate to the Franchiser.

According to the Franchising laws, disclosure document in New York, the Franchisor must provide details about critical employees, management experience, bankruptcy and litigation history, other investments and purchases before fourteen days are over. There exists a contract signed between the franchisor and the franchise about the terms of sales in operation (Rodrigues, Nikhil & Jacob, 2016). Other legal factors include New York's business requirements that products sold must meet health standards, and the business must be legitimate. In this case, MacDonalds will be responsible for the New York government's legal requirements and the setting up of the franchise.

On the other hand, a comprehensive business budget for purchasing the franchise, setting up the stock, annual royalties and estimated profits will determine the viability of buying the franchise based on the expected benefits. The other plan is to determine the current market share that McDonald's is enjoying, and the ability to increase the annual sales for the business franchise since it uses projected financial analysis from McDonald's.

Fig. 1.1 Comparison of McDonald’s Market share (Pomranz, 2017).

McDonald’s primary competitors include Subway, Starbucks Coffee, Burger King, Wendy’s, Taco Bell and Dunkin’s Donuts among others which may not be listed above. McDonald's leads competitors regarding market share marking a 94.32B market cap. The competitiveness is because McDonald has the lowest price-to-earnings ratio leading to more customer base preferring it is quality and affordable products (Webber, 2013). The critical brand name has also contributed positively to McDonald's success.

Conclusion

Considering that the pros of starting a franchise surpass the disadvantages, joining McDonald's franchise will be a viable business plan. It will reduce the risk of starting a personal business and meeting a large number of legal requirements. McDonald's is a famous company with renowned brands of fast foods which will make the starting of the business at New York much more successful. New York has a vast market range, and there is much potential for a company with McDonald’s brand to thrive. The store will be able to enjoy free low advertisement costs, using the franchisor’s trademark, and free market research since it only needs to purchase the franchise.

Exploring Westhampton area

Setting up a business requires has to have a broad knowledge of the area in which we are carrying out our operations. Though franchising calls for accepting more so when we are getting embodied in MacDonald’s Franchise, understanding the environment of our service is a crucial idea to ensure that we elect the right enterprise. In this case, we are researching influential factors around Westhampton which influence location a restaurant franchise within the region.

Francis Gabreski airport is the influential primary factor herein. Placing a restaurant franchise around this area can be beneficial because the people moving towards different points can find comfort in the business. The restaurant facility can also offer accommodation facilities to the travelers.

The demographic features of this area show that this area is highly populated. The demography will be significant influences on people are our target market. Research has it that as per 2010 census Westhampton had 623 housing units per average density (Bacamazo et al., 2011). With the area having a high population, this means that the degree of output will be high and the business will be in a position to make high profits during the trade period.

The Dwarf Pine Plain Preserve is another influential factor in the Westhampton region. Most people tour this preserve. The plain creates a ready and always available market for food resources provided by the Franchise. Considering this factor, the Franchise will still have a dream of ready customers as people will keep moving in and out daily.

This area has excellent transport system. The sunrise highway stands a position to compare the city with other parts of the NYC thus making this area essential for business franchising. We have the bay which creates room for recreational activities to take place within this region and therefore the business franchise can add to the initial factor recreation like beaches typical in the area to attract more people.

Westhampton, even if she does not have all the required entities for a business franchise, she possesses a lump sum amount of such factors we will need to settle a business franchise. These range from the recreational beaches within the region, the well-established road and air transport system to the Dwarf Pine plain which brings people closer.

Starting MacDonald

Starting a MacDonald is a step which is not too simple but requires much determination. To start a MacDonald franchise requires one to have at least $500,000 which is about 2.5% as down payment. Having a value higher than this is beneficial as the operators encourage multi-restaurant. The amount of cash retained for down payment should not be informed of liabilities but should be in the form of assets which include cash and other assets except personal residence assets. Below are additional requirements.

Business experience, before entering to MacDonald’s franchise, one needs to have experience in business operation. This kind of business operation requires attention, and thus previous experience in the business operation is necessary.

One needs to be ready to proliferate with MacDonald’s franchise. With this, a given fee for training is a requirement as one enters into practice on the operation of the franchise. Thus readiness for exercise is an excellent requirement.

You also need to have a ready business plan and in the same case be an excellent financial manager. Operating a MacDonald’s franchise requires someone with a workable business plan. Like any other form of business operation in the market, financial management is essential here, and one needs to manage funds well. Trading with MacDonald’s requires one to pay 4% of monthly sales to MacDonald’s and also pay rent to them as they act as the landlords to the business structure.

References