Franchising – Research activity

McDonalds’
The process:
Firstly, the potential franchisee must partake in multiple interviews with McDonalds, before moving on with the training process itself. The training process usually takes around 9 months to fully complete, including visiting and working in several restaurants as well as class based tuition. The training must be supported by the franchisee throughout the process, as well as contributing a refundable £5000 training deposit.

Figure 1 – A flow chart to show the
Selection process

The financial aspects:
The restaurant cost ranges from £125,000 to £325,000. The potential franchisee will need to provide at least 25% of the value as unencumbered funds, the remaining 75% can be funded through a bank loan with favourable funding terms.
There's also a training deposit of £5,000 which is refunded when the franchisee complete your training, along with a one-off franchise fee of £30,000. There are also ongoing fees. Including rent, a service fee and contribution to the national marketing spend.
The returns of choosing McDonalds as a franchise include cashflow ranging from £95000 to £200,000 each year, however this value isn’t guaranteed; and may be more or less.
Why McDonalds?
McDonalds prize themselves in having a first class training programme available to the franchisees, providing them with ongoing support and advice to help to progress them and the business throughout the twenty year term. McDonalds is also a member of the British Franchise Association, the voluntary self-regulating governing body for franchising.
Papa Johns’