McDonald’s as the World’s Fastest Business


McDonald’s has become emblematic of globalization, sometimes referred to as the “McDonaldization” of society. The Economist newspaper uses the “Big Mac Index”: the comparison of a Big Mac’s cost in various world currencies can be used to informally judge these currencies’ purchasing power parity. Norway has the most expensive Big Mac in the world as of July 2011, while the country with the least expensive Big Mac is India[(albeit for a Maharaja Mac—the next cheapest Big Mac is Hong Kong). The McDonald’s Corporation’s business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, McDonald’s may also collect rent, which may also be calculated on the basis of sales. As a condition of many franchise agreements, which vary by contract, age, country, and location, the Corporation may own or lease the properties on which McDonald’s franchises are located. In most, if not all cases, the franchisee does not own the location of its restaurants.

The United Kingdom and Ireland business model is different than the U.S, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald’s trains its franchisees and others at Hamburger University in Oak Brook, Illinois.

In other countries, McDonald’s restaurants are operated by joint ventures of McDonald’s Corporation and other, local entities or governments. As a matter of policy, McDonald’s does not make direct sales of food or materials to franchisees, instead organizing the supply of food and materials to restaurants through approved third party logistics operators. Furthermore, McDonald’s has been using a corn-based bio plastic to produce containers for some of its products. Although industries who use this product claim a carbon savings of 30% to 80%, a Guardian study shows otherwise. The results show that this type of plastic does not break down in landfills as efficiently as other conventional plastics. The extra energy it takes to recycle these plastic results in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams, causing other recycled plastics to become unsalable.

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