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McDonald's Type Public (NYSE: MCD) Founded May 15, 1940 in San Bernardino, California;

McDonald's Corporation, 1955 in Des Plaines, Illinois Founder(s) Dick and Mac McDonald McDonald's restaurant concept;

Ray Kroc, McDonald's Corporation founder. Headquarters Oak Brook, Illinois, USA Number of locations 31,000+ worldwide[1] Area served Worldwide Key people James A. Skinner

(Chairman) & (CEO) Industry Restaurants Products Fast Food

(hamburgers • chicken • french fries • soft drinks • coffee • milkshakes • salads • desserts • breakfast) Revenue ▲ US$ 22.79 billion (2007)[2] Operating income ▼ US$ 3.879 billion (2007)[2] Net income ▼ US$ 2.359 billion (2007)[2] Total assets ▲ US$ 29.391 billion (2007) Total equity ▼ US$ 15.279 billion (2007) Employees 400,000 (2008)[2] WebsiteMcDonalds.com

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McDonald's Corporation (NYSE: MCD) is the world's largest chain of fast food restaurants, serving nearly 47 million customers daily.[3] McDonald's primarily sells hamburgers, cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, and desserts. More recently, it has begun to offer salads, wraps and fruit. Many McDonald's restaurants have included a playground for children and advertising geared toward children, and some have been redesigned in a more 'natural' style, with a particular emphasis on comfort: introducing lounge areas and fireplaces, and eliminating hard plastic chairs and tables.

In addition to its signature restaurant chain, McDonald's Corporation held a minority interest in Pret A Manger (a UK-based sandwich retailer) until 2008, and owned the Chipotle Mexican Grill until 2006 and the restaurant chain Boston Market until 2007.[4] The company has also expanded the McDonald's menu in recent decades to include alternative meal options, such as salads and snack wraps, in order to capitalize on growing consumer interest in health and wellness.

Each McDonald's restaurant is operated by a franchisee, an affiliate, or the corporation itself. The corporations' revenues come from the rent, royalties and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's revenues grew 27% over the three years ending in 2007 to $22.8 billion, and 9% growth in operating income to $3.9 billion.[5]

Contents

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1 History
2 Corporate overview
- 2.1 Facts and figures
- 2.2 Types of restaurants
- 2.3 Playgrounds
- 2.4 Redesign
- 2.5 Business model
3 Controversies
4 Arguments in defense of McDonald's
5 Environmental record
6 Legal cases
7 Products
8 Advertising
- 8.1 Children's advertising
9 Gallery
10 Global operations
- 10.1 Global locations
11 See also
12 References
13 External links
- 13.1 Multimedia

History

"Speedee"

Main article: History of McDonald's

The business began in 1940, with a restaurant opened by brothers Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant. The original mascot of McDonald's was a man with a chef's hat on top of a hamburger shaped head whose name was "Speedee." Speedee was eventually replaced with Ronald McDonald in 1963.

The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955[6] , the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion and the company became listed on the public stock markets in 1965[7]. Kroc was also noted for aggressive business practices, compelling the McDonald's brothers to leave the fast food industry. The McDonald's brothers and Kroc feuded over control of the business, as documented in both Kroc's autobiography and in the McDonald brothers' autobiography. The site of the McDonald brothers' original restaurant is now a monument.[8]

With the expansion of McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility.

Corporate overviewFacts and figures

McDonald's restaurants are found in 119 countries[9] and territories around the world and serve nearly 47 million customers each day. McDonald's operates over 31,000 restaurants worldwide, employing more than 1.5 million people[9]. The company also operates other restaurant brands, such as Piles Café, and has a minority stake in Pret a Manger. The company owned a majority stake in Chipotle Mexican Grill until completing its divestment in October 2006. Until December 2003, it also owned Donatos Pizza. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.[10]

Types of restaurants

Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of other fast-food chains. In some countries "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighborhoods often omit drive-through service. There are also a few locations, located mostly in downtown districts, that offer Walk-Thru service in place of Drive-Thru.

Specially themed restaurants also exist, such as the "Solid Gold McDonald's," a 1950s rock-and-roll themed restaurant. In Victoria, British Columbia, there is also a McDonald's with a 24 carat (100%) gold chandelier and similar light fixtures.

To accommodate the current trend for high quality coffee and the popularity of coffee shops in general, McDonald's introduced McCafé. The McCafé concept is a café-style accompaniment to McDonald's restaurants in the style of Starbucks. McCafé is a concept of McDonald's Australia, starting with Melbourne in 1993. Today, most McDonald's in Australia have McCafés located within the existing McDonald's restaurant. In Tasmania there are McCafés in every store, with the rest of the states quickly following suit. After upgrading to the new McCafe look and feel, some Australian stores have noticed up to a 60% increase in sales. As of the end of 2003 there were over 600 McCafés worldwide.

Some locations are connected to gas stations/convenience stores,[11] while others called McDonald's Express have limited seating and/or menu or may be located in a shopping mall. Other McDonald's are located in Wal-Mart stores. McStop is a location targeted at truckers and travelers which may have services found at truck stops.[12]

Playgrounds

Some McDonald's in suburban areas and certain cities feature large indoor or outdoor playgrounds, called "McDonald's PlayPlace" (if indoors) or "Playland" (outdoors)[citation needed]. The first PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987 in the USA, with many more being constructed soon after. Some PlayPlace playgrounds have been renovated into "R Gym" areas.

"R Gyms" are in-restaurant play area that features interactive game zones designed for children aged 4 to 11. They are equipped with stationary bicycles attached to video games, dance pads, basketball hoops, monkey bars, an obstacle course, and other games which emphasize physical activity.[13]

The "R Gym" features the Toddler Zone, an active play environment with age appropriate games that develop physical coordination and social skills; the Active Zone, designed for children aged four-to-eight that promotes physical fitness through fun play; the Sports Zone which features a series of sport oriented activities to promote aerobic exercise for children aged 9-to-11; the Parent Zone which features seating and provides a monitoring area for their children; and the Dining Area which allows families to eat.

Redesign

In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their restaurants, the first major redesign since the 1970s.[14][15]

The new design will include the traditional McDonald's yellow and red colors, but the red will be muted to terra cotta, the yellow will turn golden for a more "sunny" look, and olive and sage green will be added. To warm up their look, the restaurants will have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls.

The exterior will have golden awnings and a "swish brow" instead of the traditional double-slanted mansard roof.

The new restaurants will feature areas:

The "linger" zone will offer armchairs, sofas, and Wi-Fi connections.
The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will offer them news and weather reports.
The "flexible" zone will be targeted toward families and will have booths featuring fabric cushions with colorful patterns and flexible seating.
Different music targeted to each zone.

Business model

McDonald's Corporation earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of McDonald's restaurants are owned and operated by McDonald's Corporation directly. The remainder are operated by others through a variety of franchise agreements and joint ventures. 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 UK business model is different, 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.

According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. (According to a news piece on Fox News this figure is one in ten). The book also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies with the culture of the host country.

Controversies

As a prominent example of the rapid globalization of American fast food industry, McDonald's is often the target of criticism for its menu, its expansion, and its business practices.

The McLibel Trial, also known as McDonald's Restaurants v Morris & Steel, is an example of this criticism. In 1990, activists from a small group known as London Greenpeace (no connection to the international pressure group Greenpeace) distributed leaflets entitled What's wrong with McDonald's?, criticizing its environmental, health, and labor record. The corporation wrote to the group demanding they desist and apologize, and, when two of the activists refused to back down, sued them for libel in one of the longest cases in British civil law. A documentary film of the McLibel Trial has been shown in several countries.

In 1999, French anti-globalisation activist José Bové vandalized a half-built McDonald's to protest against the introduction of fast food in the region.[16]

In 2001, Eric Schlosser's book Fast Food Nation included criticism of the business practices of McDonald's. Among the critiques were allegations that McDonald's (along with other companies within the fast food industry) uses its political influence to increase its profits at the expense of people's health and the social conditions of its workers. The book also brought into question McDonald's advertisement techniques in which it targets children. While the book did mention other fast-food chains, it focused primarily on McDonald's.

In 2002, vegetarian groups, largely Hindu, successfully sued McDonald's for misrepresenting their French fries as vegetarian.[17]

Morgan Spurlock's 2004 documentary film Super Size Mesaid that McDonald's food was contributing to the epidemic of obesity in society, and that the company was failing to provide nutritional information about its food for its customers. Six weeks after the film premiered, McDonald's announced that it was eliminating the super size option, and was creating the adult happy meal.

Anthony Bourdain on his show, No Reservations, has criticized McDonald's among other fast-food restaurants for its culinary blandness.

The soya that is fed to McDonald's chickens is supplied by agricultural giant Cargill and comes directly from Brazil. Greenpeace alleges that not only is soya destroying the Amazon rain forest in Brazil, but soya farmers are guilty of further crimes including slavery and the invasion of indigenous peoples' lands. The allegation is that McDonald's, as a client of Cargill's, is complicit in these activities.[18]

Arguments in defense of McDonald's

In response to public pressure, McDonald's has sought to include more healthy choices in its menu and has introduced a new slogan to its recruitment posters: "Not bad for a McJob".[19] (The word McJob, first attested in the mid-1980s[20] and later popularized by Canadian novelist Douglas Coupland in his book Generation X, has become a buzz word for low-paid, unskilled work with few prospects or benefits and little security.) McDonald's disputes the idea that its restaurant jobs have no prospects, noting that its CEO, Jim Skinner, started working at the company as a regular restaurant employee, and that 20 of its top 50 managers began work as regular crew members.[21] In 2007, the company launched an advertising campaign with the slogan "Would you like a career with that?" on Irish television, outlining that their jobs have many prospects.

In a bid to tap into growing consumer interest in the provenance of food, the fast-food chain recently switched its supplier of both coffee beans and milk. UK chief executive Steve Easterbrook said: "British consumers are increasingly interested in the quality, sourcing and ethics of the food and drink they buy". McDonald's coffee is now brewed from beans taken from stocks that have been certified by the Rainforest Alliance, a conservation group. Similarly, milk supplies used for its hot drinks and milkshakes have been switched to organic sources which could account for 5% of the UK's organic milk output.[22]

McDonald's announced on May 22, 2008 that, in the U.S. and Canada, it will be introducing cooking oil for its french fries that contains no trans fats. The company will use canola-based oil with corn and soy oils by year's end for its baked items, pies and cookies.[23][24]

Environmental record

Discarded fast food packaging contributes to the urban litter problem in cities worldwide

In April 2008, McDonald's announced that 11 of its Sheffield restaurants have been using a biomass trial that had cut its waste and carbon footprint by half in the area. In this trial, waste from the restaurants were collected by Veolia Environmental Services and used to produce energy at a power plant. McDonald's plans to expand this project, although the lack of biomass power plants in the U.S. will prevent this plan from becoming a national standard anytime soon.[25] In addition, in Europe, McDonald's has been recycling vegetable grease by converting it to fuel for their diesel trucks.[26]

Furthermore, McDonald's has been using a corn-based bioplastic to produce containers for some of their 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 this plastic results in a higher output of greenhouse gases. Also, the plastics can contaminate waste streams, causing other recycled plastics to become unsaleable.[27]

The U.S. Environmental Protection Agency has recognized McDonald's continuous effort to reduce solid waste by designing more efficient packaging and by promoting the use of recycled-content materials.[28] McDonald's reports that they are committed towards environmental leadership by effectively managing electric energy, by conserving natural resources through recycling and reusing materials, and by addressing water management issues within the restaurant.[29]

In an effort to reduce energy usage by 25% in its restaurants, McDonald's opened a prototype restaurant in Chicago in 2009 with the intention of using the model in its other restaurants throughout the world. Building on past efforts, specifically a restaurant it opened in Sweden in 2000 that was the first to intentionally incorporate green ideas, McDonald's designed the Chicago site to save energy by incorporating old and new ideas such as managing storm water, using skylights for more natural lighting and installing some partitions and tabletops made from recycled goods. [30]

When McDonald's received criticism for its environmental policies in the 1970s, it began to make substantial progress towards source reductions efforts.[31] For instance, an "average meal" in the 1970s-a Big Mac, fries, and a drink-required 46 grams of packaging; today, it requires only 25 grams, allowing a 46 percent reduction.[32] In addition, McDonald's eliminated the need for intermediate containers for cola by having a delivery system that pumps syrup directly from the delivery truck into storage containers, saving two million pounds of packaging annually.[33] Overall, weight reductions in packaging and products, as well as the increased usage of bulk packaging ultimately decreased packaging by 24 million pounds annually.[34]

Legal cases

Main article: McDonald's legal cases

McDonald's has been involved in a number of lawsuits and other legal cases, most of which involved trademark disputes. The company has threatened many food businesses with legal action unless they drop the Mc or Mac from their trading name. In one noteworthy case, McDonald's sued a Scottish café owner called McDonald, even though the business in question dated back over a century (Sheriff Court Glasgow and Strathkelvin, November 21, 1952).

It has also filed numerous defamation suits. For example, in the McLibel case, McDonald's sued two activists for distributing pamphlets attacking its environmental, labor and health records. After the longest trial in UK legal history, McDonald's won a technical victory for showing that some allegations were untrue. But it was a massive public relations disaster, since the judge also found that more than half of what was on the pamphlet was truthful, or were simply the opinions of the activists and therefore non-prosecutable.

McDonald's has defended itself in several cases involving workers' rights. In 2001 the company was fined £12,400 by British magistrates for illegally employing and over-working child labor in one of its London restaurants. This is thought to be one of the largest fines imposed on a company for breaking laws relating to child working conditions (R v [2002] EWCA Crim 1094). In April 2007 in Perth, Western Australia, McDonald's pleaded guilty to five charges relating to the employment of children under 15 in one of its outlets and was fined AU$8,000.[35]

Possibly the most infamous legal case involving McDonald's was the 1994 decision in The McDonald's Coffee Case.

In a McDonald's American Idol figurine promotion, the figurine that represents "New Wave Nigel" wears something that closely resembles Devo's Energy Dome, which was featured on the band's album cover, Freedom of Choice. In addition to the figurine's image, it also plays a tune that appears to be an altered version of Devo's song "Doctor Detroit." Devo copyrighted and trademarked the Energy Dome and is taking legal action against McDonald's. [36]

Products

A McDonald's Big Mac combo meal served with French fries and Coca-Cola.

Main article: McDonald's products

See also: McDonald's products (international)

McDonald's predominantly sells hamburgers, various types of chicken sandwiches and products, French fries, soft drinks, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. Portugal is the only country with McDonald's restaurants serving soup. This local deviation from the standard menu is a characteristic for which the chain is particularly known, and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia).

Advertising

Main article: McDonald's advertising

McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy.

To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.

Children's advertising

Main articles: Ronald McDonald and McDonaldland

Gallery

McDonalds stores worldwide

the Rock N Roll McDonald's in Chicago, Illinois where the company celebrated its 50th anniversary

A McDonald's store front in Times Square.

The interior of a McCafé concept located in Dublin, Ireland.

The site of the first McDonald's to be franchised by Ray Kroc is now a museum in Des Plaines, Illinois. The building is a replica of the original, which was the ninth McDonald's restaurant.

McDonald's in Riga, Latvia.

McDonald's in Bratislava, Slovakia.

A McDonald's in Meknes, Morocco.

A McDonald's delivery vehicle in Seoul, South Korea.

A McDonald's in Shenango Township, Pennsylvania just outside of New Castle was rebuilt in 2007 with the new "Forever Young" look.

A refurbished stand-alone McDonalds in Portsmouth, England. Unlike international McDonald's, British McDonald's are simply being refurbished rather than rebuilt.

Not-so-traditional storefront of the McDonald's in Times Square.

McDonalds in Corfu, Greece

A McDonald's restaurant with a Playplace in Moncton, Canada

McDonalds over Interstate 44 in Vinita, OK

McDonalds in Seminole Florida on Park Blvd

McDonalds in Angeles City, Philippines

Global operations

Countries with McDonald's stores

McDonald's has become emblematic of globalization, sometimes referred as the "McDonaldization" of society. The Economistmagazine 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. Scandinavian countries lead the Big Mac Index with four of the five most expensive Big Mac's. Norway has the most expensive Big Mac in the world as of July 2008, whilst the cheapest country is Malaysia.

The brand is known informally as "Mickey D's" (in the US and Canada), "Macky D's" (in the UK and Ireland), "Mäkkäri" (in Finland), "McDo" (in France, Quebec, the Philippines and the Kansai region of Japan), "Maccer's" (in Ireland), "Macarrannis" (in Mexico), "Maccas" (in New Zealand and Australia), "McD's" (in New Zealand), "Donken" (in Sweden), "de Mac" (in the Netherlands), Mäkkes (in Germany), "Mac" (in Brazil), "Makku" (in most of Japan; "Makudo" in the Kansai region); "Mek" (in Serbia), "Mekáč" (in the Czech republic), "Mak-Dak" (in the Russia), Mac (in Portugal) and "MacDon's' (in Canada).

McDonald's has also acquired derogatory nicknames, such as "McVomit's" in parts of the USA and "McDoof" ("McStupid") in Germany.

Thomas Friedman once said that no country with a McDonald's had gone to war with another.[37] However, the "Golden Arches Theory of Conflict Prevention" is not strictly true. Careful historians point to the 1989 United States invasion of Panama, NATO's bombing of Serbia in 1999, the 2006 Lebanon War, and the 2008 South Ossetia War as exceptions.

Some observers have suggested that the company should be given credit for increasing the standard of service in markets that it enters. A group of anthropologists in a study entitled Golden Arches East (Stanford University Press, 1998, edited by James L. Watson) looked at the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to demand the same of other restaurants and institutions. In East Asia in particular, McDonald's have become a symbol for the desire to embrace Western cultural norms. McDonald's have recently taken to partnering up with Sinopec, China's second largest oil company, in the People's Republic of China, as it begins to take advantage of China's growing use of personal vehicles by opening numerous drive-thru restaurants.[38] The only countries in Europe not to have McDonald's stores are Albania, Armenia, Bosnia and Herzegovina and the Vatican City.

Global locations

Argentina
American Samoa
Australia
Austria
Azerbaijan
Bahamas
Bahrain
Bangladesh
Belarus
Belgium
Botswana
Brazil
Bulgaria
Canada
Chile
People's Republic of China
Colombia
Costa Rica
Croatia
Cuba (Guantanamo Bay Naval Base)
Cayman Islands
Cyprus
Czech Republic
Denmark
Dominica
Dominican Republic

Ecuador
Egypt
El Salvador
Estonia
Fiji
Finland
France
Georgia
Guam
Germany
Greece
Gibraltar
Guatemala
Guyana
Honduras
Hong Kong
Hungary
Iceland
Italy
India
Indonesia
Ireland
Israel
Japan
Jordan
Kuwait
Latvia
Lebanon
Lithuania
Luxembourg

Macau
Macedonia
Malaysia
Malta
Mauritius
Mexico
Moldova
Morocco
Netherlands
- Aruba
New Zealand
Nicaragua
Norway
Oman
Pakistan
Panama
Peru
Paraguay
Philippines
Poland
Portugal
Puerto Rico
Qatar
Romania
Russia
Samoa
Saint Lucia
Saudi Arabia

Serbia
Singapore
Slovakia
Slovenia
South Africa
South Korea
Spain
Sri Lanka
Sweden
Switzerland
Syria
Taiwan
Thailand
Turkey
Ukraine
United Arab Emirates
United Kingdom
United States
Uruguay
United States Virgin Islands
Venezuela
Yemen
Zimbabwe

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