EXCLUSIVE: McDonald's Discuss the Future of Franchising
McDonald's has just marked the 30th year since it opened its first franchised store in the UK. A lot has changed in that time, and to coincide with the anniversary research has been released looking at where the pool of future franchisees may come from.
We sat down with Jason Clark, VP of Franchising to discuss the findings and what the future of franchising looks like for McDonald's.
QSR: Tell us more about this research and why you commissioned it?
We’ve been franchising in the UK for 30 years over which time we’ve been very successful. When looking at research for our business plan over the coming years we wanted to know where interest for franchising could come from.
QSR: What did the research show?
In general, the research has shown that senior decision makers are increasingly frustrated with corporate life due to factors such as frustration with company decisions, unfulfilled personal ambitions, and lack of time with friends and family. High achievers with established careers are now showing evidence of career restlessness that is often associated with the young. We see people from a variety of different backgrounds interested in becoming a franchisee, from the police force to farmers and people in senior corporate roles. While we expect this to continue, we do think that more senior managers will be attracted to becoming a franchisee as they contemplate a second career, and that McDonald’s is a great option for them.
QSR: How many franchisees do you have and how many do you recruit on an annual basis?
We have 158 franchisees across the UK. On average each franchisee has 5 restaurants in their portfolio, but within this there is a wide range. Obviously we want our franchisees to become multi-site operators though.
We don’t have an annual target for franchisee recruitment but as a guide we recruited 9 franchisees in 2015, and are approaching double figures in 2016. This is from thousands of enquiries and hundreds of applications.
QSR: Tell us a bit about your franchisee process?
As you’d expect, our process is very rigorous. On average it takes 1 – 1.5 years from initial interest to a franchisee buying their first restaurant. This includes a 9 month unpaid internship so franchisees are fully immersed in and understand all aspects of the business and our restaurants before they take on their own.
QSR: We live in uncertain times. What concerns do potential franchisees express when talking to you?
I’d say the main concern would be around UK growth prospects and our ability as a brand to continue to grow. Potential franchisees also want to know about the systems we’ve put in place to support them and are keen to meet our management team and existing franchisees to get confidence in the market place.
Many of our applicants are also looking for a second career with a better work life balance. The great thing about McDonald’s is that we can enable this with many locations across the UK and the possibility of our franchisees working much closer to home.
QSR: With all the competition in the UK QSR market how do you remain an attractive option for potential franchisees?
I think there are a number of things that set us apart. The first of these is the power and success of the McDonald’s brand. We’ve had 41 consecutive quarters of positive growth in the UK. This success means that we are able to attract a lot of interest.
Second is our support programme. Our training platform is award winning. Our franchisees don’t just get an annual check-up- we are with them whenever they need us.
And finally, our agreements set us apart. We offer 20 year franchise deals. This gives our franchisees certainty of tenure.
QSR: What about the physical appearance of your restaurants? What changes have you made to ensure they feel modern and inviting?
We have invested a huge amount in our restaurants over the last couple of years to make them current and equip them for the future. For instance, we’re rolling out digital self-ordering kiosks, we have embarked on a major front of house re-design including incorporating different restaurant zones such as digital play areas, phone charging and soft furnishings. We’ve also changed our kitchen design so that we are able to produce our customers food to order and offer different foods such as our signature range of burgers.
