EXECUTIVE SUMMARY
The purpose of this report is determine which locations Genie Investment’s should plan to build for the International McDonald franchises. The two locations selected are Sydney, Australia and Birmingham, England. During this time Genie Investment’s has looked into two key points for considering the new locations: infrastructure, and overall economic conditions. Both locations are expected to become profitable within three to five years.
Initial investment of $640,000 for both locations, Genie Investments and its investors would expand current profits of approximately three million annually between both locations after initial investment reimbursement.
Employee cost of operations in both locations would be approximately $684,000 leaving 2.3 million in revenue annually.
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Startup costs for a new location, which includes construction and equipment expenses that are between $955,708 and $2.3 million. (Corporation, McDonald's Franchising Opportunties). Franchisees must pay 40% of the startup costs with cash or other non-borrowed resources, while the rest can be financed. In addition to these costs, McDonald's charges a $45,000 franchise fee and an ongoing monthly service fee equal to 4% of gross sales. Franchisees must also pay rent to the company, which is a percentage of monthly sales (Australia). To move forward with this project in Sydney a location would need to be acquired.
Australian employment costs run higher than the United States. The average crew member makes approximately:
· $614.40 per employee per 40-hour week. The average McDonalds requires ten to twelve crew members.
· $764.00 per shift manager per 40-hour week. A shift manager is needed one per shift.
· $825.60 per store manager per 40-hour week, McDonald’s store managers are not on salaried. (GlassDoor)
· 4% franchise fee required for all McDonald’s restaurants Birmingham,