About five years ago, McDonald’s suffered from disappointing sales growth, deteriorating margins and they were losing market share. It got so bad that analysts were predicting that 2014 will be the first year of negative global same-store sales since 2002. That’s when Operation Turnaround was implemented in 2015.
McDonalds focused on refranchising to increase the company’s percentage of franchised restaurants. The refranchising efforts would cut general and administrative cost by $300 and lower capital expenditures because franchised locations would require less investments. However, the halo effect was refranchising would allow local franchisees to determine specific customer needs and food preferences.
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