Mcdonald Franchise At Latrobe University - Case Study Example

MacDonald Franchise xxxxxxxxxxxxxxxxxxxxxxxxxxx Name xxxxxxxxxxxxxxxxxxxxxxxxxxxx Course xxxxxxxxxxxxxxxxxxxxxxxxxxx Lecturer xxxxxxxxxxxxxxxxxxxxxxxxxxxx Date MCDONALD FRANCHISE AT LATROBE UNIVERSITY 1.0 Introduction MacDonald has one of the most prominent franchise operations among multi-national corporations today. Since its conception in 1955, the company has actively and continually searched for franchisees to operate and own fast foods restaurants. In 2008, the company was rated number two for America Top Global Franchises and number one franchise to own in the USA. A major question posed by other companies, envying MacDonald, is what makes its franchises so successful. Among other factors, MacDonald has realized the importance of training during the initiation of a franchise. A crucial consideration for prospective business owner eyeing franchised businesses is the level of support they will receive from their parent company (Hoy and Stanworth 2003). MacDonald is renowned for training of its franchise owners/operators. The company ensures a comprehensive support and training program for these owners during the first year and then an ongoing support throughout the ownership through field operations, telephone support, cooperative purchasing and newsletters. MacDonald endeavors to apply a training program for its new franchise in Latrobe University. 1.1 Objectives of the project The main reason for providing training to franchisees is to ensure that the franchise is operated in an identical manner as the prevailing systems created by the franchisor. Initial training is particularly fundamental as it determines the momentum of the new business operation. Mazero and Trigg (2011) note that launching a franchise is a huge business undertaking and therefore, training support from the franchisor can ease the transition of the business and propel the company to success. Basically, training programs enables the franchisee to become aware of the ‘how to’ of the franchisor. The objectives of the training project to be conducted on the new MacDonald’s franchise in Latrobe University are summarized below: To improve and sustain efficiency and quality in the new business operation To ensure that the new workforce is conversant with methods of preparing food on menus To equip management with skills of rostering staffs effectively To provides management with knowledge concerning ways of running the restaurant efficiently and ways of measuring performance To train accounting staff on proper ways of maintaining financial records To train management on ways of keeping junior employees motivated and engaged To prepare the staff for tough times 2.0 Project requirements and outline 2.1 Requirements Before commencement of the training program, it is fundamental for the franchisee to be aware of basic details such as whether training materials are provided during the training, content of the initial training programs and the nature of ongoing training programs including refresher courses. Time allocated for training as well as the location should also be known before the training begins. Essentially, the exercise should be conducted at the franchise which is the Latrobe University or at the company’s headquarter. The training will take a span of three to four weeks and will be conducted some time before the franchisee begins operations (Clifton 2008). Besides that, the franchisee needs to study the Franchise Disclosure Document (FDD) to determine whether it has provided for complete training program. Holding face-to-face discussions with the franchisors will also provide important information regarding the training. The franchisor should also expected critical questions from the franchisee regarding the training program which should be taken positively to ensure an effective training. According to Clifton (2008) a good training program should include all the details the franchisee needs to know about the products and services as established by the franchisor. For instance, it should give details on how supplies and equipments are obtained. Training should also tackle details about properties owned by the franchisor for example real estate, leases and buildings. Information regarding management of human resources such as hiring should be well articulated during the training program. 2.2 Outline 2.2.1 Step 1: The operations manual This is the most important part of the training program as it provides the platform upon which the trainer or the franchisor will base the training program. In other words, it is the training textbook and its most vital function is to provide quality control mechanisms. Typically, an operations manual is prepared as though the franchisee has absolutely no prior skills or experience in the industry. This is because the document is ideally an extension of the franchise agreement thus must incorporate all standards as required by the law. It should address the most basic step involved during the development of a new business including steps of obtaining a federal tax identification number, opening a bank account, appropriate business location and other good business practices. Legal discussions should also be well articulated in the operations manual providing in-depth discussion about legal issues such as rights of workers with disabilities, workplace sexual harassment, labour and wage laws (Mendelsohn 2004). Additionally, the operations manual should include instructions on the operations of business as conducted by the franchisor such as expected standard of performance and reporting requirements. Due to the complex nature of operation manuals, franchisors are advised to hire professionals to develop the document. MacDonald, being a huge brand name, will require thorough experts in the field to avoid detrimental effects of inadequate brand protection. An operation manual that is simply scrimped could land the franchisor in a courtroom and therefore it should be taken as a serious issue. Once the operations manual is complete, the training program should then be developed to impart its contents to the franchisee. There is always a notion that due to the detailed nature of the operations manual, the training program can presuppose a certain level of ability or knowledge. However, this is a deception as a training program should be an exact reflection of the operations manual. Thus, a clear understanding of the franchisee with regard to its industry-specific knowledge should be determined in order to develop a good training program. This will provide insight on whether the franchisee will be treated as a totally new learner or a veteran. Even so, the training program must ensure that it has disbursed all the skills that the franchisee will use to adequately represent the standard of quality associated with MacDonald. 2.2.2. Step 2: Headquarter training One of the fundamental elements involved in almost all franchises are training programs conducted at the franchisors headquarters. Before commencement of the franchise, it should be the franchisors mandate to develop a formal training agenda for its pre-opening training course at headquarters. Although the operations manual is the primary reference point, training agendas at the headquarters should go beyond the scope of the manual. In essence, the training begins with introduction of staffs, a tour of corporate headquarters and that of the prototype operations. At the initial stages of the training program, the franchisor should focus subjects that address company details and profile such as corporate philosophy and history, mission and vision, pre-opening procedures, reporting requirements, vendor relationships, insurance requirements and daily operations. This segment of training is essentially conducted within the franchise prototype and involves hand-on training. One way to make the training lively and successful is to use a mixture of training formats. Hand-on work, discussions, lecturer, presentations and videos create an inviting training environment. Moreover, research has indicated that the franchisee retain significant information if the franchisor uses a variety of training methodologies including tactile learning, auditory and visual methodologies. It is also recommendable for the franchisor to involve most of its management staffs in the training program so as to build franchise relationships across the organization. 2.2.3 Step 3: Onsite training The nest step in the project will involve several days to weeks of training to assist the franchisees staff acclimatize to the new business operations. Similar to the headquarter training; onsite training should also be guided by a detailed training agenda. Onsite training differs markedly from one franchisee to another depending on the level of sophistication and prior experience. Flexibility in terms of content and approach should be of paramount importance during the onsite session so as to accommodate the franchisee’s weaknesses (Spinelli et al 2004). Taking into consideration that the training is taking place in the franchisee’s location, training should focus on assisting the staffs on ways of simplifying the day-to-day operations of business. The first few days of onsite training should be used to identify and prioritize the needs of the franchisee. Based on this information the trainer should tailor the program to meet the needs of the franchisee. It should be noted that the franchisee can forget everything that was learnt during the training which is usually the case during franchises with big name; of which MacDonald is enlisted. To avoid such incidences, the franchisor should probably involve an opening team. This team will literally assist the franchise to get its feet during the first few weeks of operation. The opening team helps the franchisee indulge slowly into the new operations so that they do not feel they are jumping into the deep end alone. Before completion of the onsite training, the franchisor should conduct a written evaluation of the training program. The evaluation should take note of the franchisee’s strong points and areas that require further improvements. Thereafter, the franchisor should give a feedback including objectives that the franchisee ought to focus on the coming months. 2.2.4 Step 4: Ongoing training While most franchisors are quick to undertake initial training, many fail to conduct ongoing and refresher training for the franchisee. As a result, most of the franchisee managers and other members of staff become uninformed about new procedures and policies regarding new systems (Altinay and Brookes 2012). To minimize the erosion of system standards over time, MacDonald will provide regular training sessions for the staffs in Latrobe University franchise. This will include periodic refresher course for all levels of employee as well training for new products and services that might be introduced in the course of time. Besides that, for any “certified position”, the program should clearly describe how newly recruited individuals are trained. This will also ensure that all individuals in the company are adequately trained. 3.0 Envisaged team members 3.1 Project leader/supervisor The project will be spear headed by team manager who major roles can be generalized into: initiation, planning, designing, execution, monitoring, controlling and closure of the project. Due to the large scope of his responsibilities, the project manager is expected to delegate some of the duties to team members. He should have a combination of skills including conflict resolution, ability to ask penetrating questions, detecting unstated assumptions and general management skills. 3.2 Technology gurus MacDonald uses technology extensively in a wide range of its operations. For instance, the cash registers at MacDonald are touch screen which means that one only touches the screen to input orders. Besides that, they have images of food and their names and require the cashier to touch the specific item so as to make the order. However, due to the sensitive nature of the system one would require to be careful in making the specific order to avoid financial mistakes. 3.3 Restaurant trainers They will part of the initial training as well as ongoing training programs. Their responsibility will be to familiarize new hires with the operations of the restaurant. They shall include food experts and trainers at the Hamburger University; the college where MacDonald trains its staff. They shall also include accounting trainers to train accountants and cashiers are the franchise on the accounting standards used by the company. 4.0 Stakeholder analysis 4.1 Competitors MacDonald’s competitors are basically other players in the fast food industry. Wendy’s with over 9000 stores in about 33 countries is MacDonald’s number one rival. The company has demonstrated remarkable growth over the past years. Franchise operations of the company however, has been quite inconsistent with notable decline over the past few years due to the companies reduction in the number of new franchises. Another important competitor is Jack in the pot. The company has managed to sustain growth by remaining focused on its strategies including focusing on preferences, needs and demands of adult consumers only which is quite contrary to MacDonald. 4.2 Customers Being a fast foods restaurant, MacDonald targets families, teens, children and basically people who have little time to make food in their houses. One of the core principles of the company is to place customer satisfaction and experience at the core of all its operations. The company, therefore, ensures that all its employees are well trained concerning matters of customer handling during training programs. 4.3 Employees MacDonald together with all its franchises employs over 1.6 million people around the world. About 400,000 are permanent company employees working in company-operated restaurants while the rests are employed on contract basis. MacDonald is devoted to providing its workers with a respectful and enabling environment where they are able to maximize their potential. BY employing thorough and exhaustive selective and onbording procedures, MacDonald has ensured that it is the number one job for all its employees. 4.4 Suppliers MacDonald has a strong linkage with its suppliers and believes in sharing value with them. As such, suppliers are expected to be customer centric, ensure quality and sustainable performance, have long-term strategic views and meet the company’s stringent standards. The supplier chain is basically divided into indirect suppliers which include farms, ranches, primary processing plants and production plants and direct suppliers which are the final processing facilities and distribution centers. 5.0 Communication matrix The project manager will be responsible for the formulation of the training program communication matrix. Its main purpose will be to make sure that all company stakeholders as well as project team members have the relevant information required to do their respective jobs. The communication matrix below will be used during the training program. Name/nature of communication From To Content provided by Type (Man/mktg/Info) Frequency Delivery media Comments Urgent issues Program manager/director Program sponsor Project manager and external stakeholders As needed E-mail Manager will collect the issue and ass the entry in the Issues Log. Issues updates/ resolutions Program sponsor Program manager Program manager As needed Verbal updates, memos or e-mails Updated in the Issue and associates Log Special presentation/ meeting Program manager Executive team Program manager Information As needed Meeting New Program Issues/actions Project manager, team members and stakeholders Project manager Project manager, team members and stakeholders Weekly or as needed E-mail, Lotus notes and meeting minutes Project status report Project manager Project manager Project manager and team members Weekly (by Wednesday 12:00PM) E-mail The reports will be used as the platform for discussion during weekly meetings Change requests Project managers Project manager Project manager Mandatory As needed E-mail The requests will be submitted to the project manager and discussed during weekly meetings 6.0 Work breakdown structure The first step in making developing the Work breakdown structure will be to define the phases which will be initiation, planning, execution, control and closure. The second step will be to add the deliverable expected from each phase identified in step one. The third step is to identify activities that will be carried out to produce the deliverables. 7. 0 Methods of mechanism Gap analysis is useful for showing how (whether) strategies will enable McDonald franchise to meet targets for key objectives (or at least those that can be easily quantified). McDonald franchise will need to consider the impact of the decision on all parts of its business. Strategic analysis tools can be used to help the firm identify any problems which may arise. These include; 1) External analysis to identify opportunities/threats and CSFs required for target markets 2) Internal analysis to identify strengths/weaknesses, core competences and sources of competitive advantage 3) Stakeholder analysis to identify key objectives and to assess power/interest of different groups 4) Gap analysis to identify the difference between desired and expected performance 5) McDonald franchise can gain competitive advantage by examining primary and support activities and looking for cost and/or quality advantages over competitors The accounting department of McDonald provides cost analysis information to higher levels of management for decisions (for example closure franchises that are unprofitable, expansion to other countries, and pricing of foods and other services) within a realistic framework. This includes cost reduction and cost control exercises (perhaps case studies of the way companies have tried to reduce costs to remain competitive) while considering the possible adverse consequences of such cost reduction exercises. 8.0 Risk analysis McDonald is assessed by making comparison with competitors, industry leaders, etc. Options include; strategic, historical, industry/sector, best-in-class international. McDonald demonstrates a detailed understanding of risk management issues and planning. The types of risk and uncertainty that face McDonald include business, financial, physical, economic, political and product life cycle. In order to properly manage and control the impact of risk, McDonald follows a sequential risk management process as follows: References Altinay, L, and Brookes, M 2012, Factors influencing relationship development in franchise partnerships, Journal of Services Marketing, Vol. 26 Iss: 4, pp.278 - 292 Clifton, D 2008, Franchising on a shoestring: making franchising work for you without breaking the bank. London: A and C Black. Hoy, F, and Stanworth, J 2003, Franchising: An international perspective. London: Routledge. Mazero, J, and Trigg, L 2011, Non-traditional generation: Franchise systems coming of age with New franchise in new venues, Franchise law journal, Vol. 30(4). Mendelsohn, M 2004, The guide to franchising, London: Thomson. Siebert, M 2005, Training your franchisees. Retrieved on 8th October from http://www.entrepreneur.com/article/77928. Spinelli, S, Rosenberg, R, and Birley, S 2004, Franchising: Pathway to wealth creation. London: FT Prentice Hall. Read More