Mcdonalds the Firm I Chose Is Mcdonalds, Essay

McDonalds

The firm I chose is McDonalds, and I chose this company for a few different reasons. The first reason is that this is the top franchise operator in the world, and one might as well learn from what the best do. McDonalds basically invented the modern franchise, back in 1955, and over time have perfected the concept. The second reason is that there is a wealth of information available. Some of the firms on the list at Entrepreneur Magazine are privately-held, and that probably means there is very little information about them. Thus, McDonalds is a good company to use as a starting point for entrepreneurial and franchise studies. There is no reason to select a company that is not the best at what it does -- I have no intention of being second best at what I do.

In the quick service restaurant industry, it costs about $1 million to start a franchise. McDonalds has a franchise fee of $45,000 and the total startup cost for one restaurant is between $1.068 million and $1.892 million, depending on factors such as real estate costs (Entrepreneur.com, 2012).

With respect to economics there are a few interesting issues. The first is utility. We know that McDonalds has a high level of appeal to consumers, but it also competes as a low cost producer. Some products that cost more, therefore, must have higher utility. I want to know how McDonalds creates that. The second economics concept that I want to study with respect to McDonalds is the firm's ability to overcome the issue of opportunity cost. McDonald's competes in a highly competitive industry, and within that industry consumers have a lot of choices. Often, a person who wants food now must make a choice…