Sole traders and franchise businesses

In this section of criteria 1 I will be describing McDonalds main activities, their aims and objectives and what type of ownership McDonalds is. I will also explain what factors influence where McDonalds restaurants are located Main activities of McDonalds: McDonalds is one of the world's most popular fast food chains. More than 26,500 McDonalds restaurants in have been opened in119 countries worldwide and every day McDonalds serves 39 million customers on average. McDonalds carries out many activities but the one most would say they are world famous for is selling fast food.

To carry out this task the first thing they need to do is purchase supplies from nearby suppliers, they can then begin preparing food we all love to indulge in. A meal in McDonalds would consist of a burger, fries and a drink and if you were to purchase a "happy meal" you would also get a kids toy free with your meal. McDonalds need to advertise; Advertisements are put on T.V, radio, billboards, newspapers, booklets, and magazines. They also have their own website,, which advertises new products. They also use clever ideas to advertise, such as getting famous faces such as Justin Timberlake to endorse their products.

Another one of McDonalds main activities is employing staff, they employ millions of people to work in McDonalds restaurants and prepare and serve food to customers. McDonalds restaurants are sold to individuals, selling them are another one of there important activities. McDonalds aims and objectives: Aim (goal or target) Objective (more specific) Working together for the success of the company.

Commitment to franchising, maintaining a good relationship with the franchisees, and also making franchising decisions based on what's best for the customers. To make a profit To maximize sales by serving more than 2.5 million customers every day. To be environmentally friendly. support the communities in which it operates. Taking responsibility to enhance and protect the McDonalds brand. Dedication in providing customers with good quality service and value to keep them satisfied and happy. What type of ownership is McDonalds?

McDonalds is in both the secondary and tertiary sectors this is due to the fact that cook the food on the premises and they also provide a service and sell their products. McDonalds is split into two sections: a PLC and franchise- over 70% of McDonalds restaurants are run by independent franchisees. McDonalds is the world's largest and most successful franchising chain; over 70% of McDonalds restaurants are run by Advantages of being a McDonalds franchise:  McDonalds is already well known worldwide so people are familiar with them and therefore trust the brand. This means customers are more likely to buy food from you if they've tried a similar franchise before.

National advertising is paid for by the franchisor. It is easier to loan money from banks to buy a franchise. Appropriate equipment is provided for the franchiser so that they are able to carry out there job well. Disadvantages of being a McDonalds franchise: To become a McDonalds franchisee you must be alone- no partnerships or groups. – You have to make a personal commitment the business day in day out for the minimum of 20 years. – The individual looking to become a McDonalds franchisee must not have any other business interests. – You must follow what is instructed by the franchisor, it is not as flexible as a sole trader where many things can be changed in regards to your liking.

Advantages of being a PLC (public limited company): – Shares can be sold to general public. – Large amount of profit can be made through the sale of shares. – They are able to produce goods at lower cost. – Goods can be borrowed at a cheaper price. Disadvantages of being a PLC: – Costly and complicated to set up as a PLC – Certain information must be made available for public. – There is a possibility of someone buying enough shares to take over McDonalds completely. – Impossible to control other shares. Factors influencing location of a McDonalds restaurant: There are many factors, which influence the decision on where to locate a McDonalds restaurant:

1) Cost of premises The cost of land varies from place to place; the cost of the premises will affect McDonalds income. For example land in London is extremely high, this is due to the fact that land in London is very much in demand. This means that if McDonalds were to locate a restaurant in London they would need to spend a large amount of money to buy land this will lead to decreased profit. On the other hand if they were looking to locate a McDonalds restaurant in Birmingham, they could purchase the same amount of land but it would cost much less this is because demand for land in Birmingham is not so high. However more McDonalds restaurants tend to be situated in London as it is a busy area and therefore more people are likely to visit the restaurants.

2) Where the customers are. In order to be successful you need to be situated in a busy place, so that more people can see that you are there, therefore you will get more customers. This is why McDonalds are located in shopping centers such as Hounslow. If a McDonalds restaurant is situated someplace where there are a lot of potential customers, they will be attracting a larger crowd, meaning, they will be making more sales, resulting in a larger profit. On the other hand somewhere quiet, it will mean that it doesn't appeal to as many customers as it could be appealing to, this will result in fewer customers and a smaller income.

3) Labour. Wherever you go, you will find that you will get a higher wage in some places. This means you have to pay your workers more. The average wage varies from place to place. If you were to go to India and work in a McDonalds restaurant, you would be paid a significant amount less than if you were working in a McDonalds restaurant in London, although you would be expected to do the same type of work for the same amount of time. This is another factor that is taken into consideration when looking for an area to situate a McDonalds restaurant, because it will affect the overall income. If you have to pay your workers more, you may make little profit.

McDonalds also needs to take into account whether or not there are people available to work in their restaurants. For example, in Southall unemployment is fairly high and therefore there will be people who are jobless and willing to work at a McDonalds restaurant- this may be something that influenced McDonalds to situate a restaurant in Southall.

4) Accessibility When looking at where to locate a McDonalds restaurant, it is essential to make sure that there are suppliers nearby and there is easy access to motorways. McDonalds do not want to spend too much on transporting goods therefore if there is easy access to the restaurant then they can be transported at a cheaper cost this will result in an increased profit. Also if your food suppliers are close, the food will be fresh, whereas if they are far away the food will not be as fresh as possible and this is good for both McDonalds and there customers.