What is the organizational structure of McDonald's?

Answer

McDonald's is a publicly-traded corporation, but most of its retail branches are not owned or operated by the company itself. Instead, they are owned by independent business owners through franchise agreements.

There are over 35,000 McDonald's locations in over 100 countries around the world. Only 19 percent of these locations are owned and operated by the McDonald's corporation, and the rest are owned by franchisees. Over 57 percent of McDonald's locations are conventional franchisees, and close to 24 percent are licensed to foreign affiliates or have developmental licenses.

A franchise is an independently owned and operated business, and in exchange for a licensing fee and a start-up fee, the franchisee gets to use the franchiser's name and products. In order to be part of the Golden Arches team, franchisees have to stay consistent with McDonald's expectations, but they receive the financial benefits of working with one of the world's most recognized brands.

The McDonald's corporation refers to itself, its franchises and its suppliers as the "System," and the company claims to use the System to identify local preferences and to bring desired dining experiences to the customers in each community. This is no small task as McDonald's has nearly 70 million customers in different communities across the globe.

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