You want franchise with that? McDonald’s flags 100 new outlets

McDonalds wants to open 1000 new restaurants but you’ll need a spare $1m and track record of success if you want to get aboard.

A McFlurry of activity … McDonald’s Australia CEO Andrew Gregory. Picture: John Feder

Got $1m to spare, a track record of success, and a willingness to work in the trenches alongside your teenage employees?

If so, a coveted McDonald’s franchise might be up your alley. But it’s not as simple as buying your way in.

McDonald’s, which this year celebrates 50 years of operations in Australia, is looking to open about 100 new restaurants over the next three years and invest more than $600m in new and ­existing assets.

But the company’s approximately 245 existing franchisees – who on average own about three restaurants each – will generally have first dibs on new sites as they hit the market.

McDonald’s operates more than 1000 restaurants across Australia, with about 80 per cent owned by franchisees and the rest owned by the company.

McDonald’s Australia chief executive Andrew Gregory said the company, which has sold more than 1.9 billion cheeseburgers in Australia over the past five decades, prided itself on its ability to train up new franchisees, but stressed operators had to be ­stewards of the brand who were willing to work in the business.

Mr Gregory, who himself worked his way up from the shop floor to the top job over the past 25 years, said they were looking for someone special when looking to bring on new franchisees.

“Of the 25 to 40 restaurants that we build (each year), most of the new restaurants will be awarded, or the opportunity given to, existing franchisees,’’ Mr Gregory said. “That’s a really great recognition and reward. Having more restaurants over time is part of your successful career at Macca’s.’’

But bringing new franchisees on helped with diversity of thought, Mr Gregory said, and was also useful particularly in new geographic areas.

“We have a lot of confidence in our ability to teach people how to successfully run a McDonald’s restaurant,’ he said.

“So what we’re looking for is not necessarily someone with a food background or a restaurant background. What we’re looking for is someone who, in another part of their career or another part of their life, has demonstrated the ability to be successful, and to also demonstrate really strong character and the ability to have an impact in the community.

“I think one of the biggest character traits of a successful franchisee, given the number of people we employ, is the ability to engage, motivate and relate to ­hundreds of employees when they operate their restaurants.’’

It’s also not an opportunity to deploy capital, but rather to build a business.

“They need to be an owner-­operator of the business, not a passive investor,’’ Mr Gregory said. “That’s the starting and end point in the discussions with them as well.’’

Franchisees also need to be able to show they had about $1m in “unencumbered equity”.

The new sites coming online in the next few years would largely be in suburban and regional areas, with a “limited number” of new franchisees able to join the fold. New franchisees would be more likely to be regionally based.

McDonald’s will offer Big Macs for just 50c as part of its 50th birthday celebrations.

More broadly, Mr Gregory said McDonald’s had weathered the pandemic well, and its intention to invest more than $600m in coming years indicated its confidence in the future.

The company’s celebrations of 50 years operating in Australia kick off on Friday with a promotion offering a Big Mac for just 50c when ordered through the mymacca’s app.

“It’s a chance for us to say thank you to our customers for supporting us through all of this time and also thanks to our franchisees and employees,’’ Mr Gregory said.

“On Friday we’ve got the opportunity for customers to buy a Big Mac for 50c if they use the mymacca’s app.

“Then over the next couple of months we’ve got a whole range of different promotions celebrating our core menu, and also teaming up with some iconic brands in Australia to produce a whole bunch of different limited edition collectibles during this time.

“You’ll see them come out over the next 10 to 12 weeks.’’

Mr Gregory said McDonald’s in Australia had been an innovator within the global firm, with the first McCafe in the world opening in Melbourne in 1993.

“Australians really do prefer, or demand, espresso barista-made coffee, and McCafe for us was an opportunity to really listen to our customers and give them the product that they want.’’

McDonald’s had previously sold American-style brewed ­coffee in Australia, which sold reasonably well, but McCafe had now become the gold standard for Macca’s around the world, Mr Gregory said, with more than 900 outlets in Australia.

“It’s now the way that the McDonald’s business, across the 100 or so markets, sells coffee.’’

McDonald’s also pioneered the use of drive-through outlets in Australia, which were now widespread around the world.

“Another one, which happened in the late 1980s, was the ­introduction of breakfast at McDonald’s, which was something we stole from the US.

“At the time … the idea of Australians eating breakfast out of home wasn’t something that happened normally and it’s another example of McDonald’s in Australia having an important impact on the community.’’

Mr Gregory said McDonald’s had injected more than $9bn into the Australian agriculture sector over the past 50 years, with all its beef, chicken, potatoes, flour and vegetables locally sourced.

Originally published as You want franchise with that? McDonald’s flags 100 new outlets