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Fast Food Nation

Fast Food Nation. Chapter 4 “Success”. Fast Food Nation Chapter 4 focuses on Franchising Franchising allowed people to enter the fast food business with lower risk and higher payout

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Fast Food Nation

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  1. Fast Food Nation Chapter 4 “Success”

  2. Fast Food Nation Chapter 4 focuses on Franchising • Franchising allowed people to enter the fast food business with lower risk and higher payout • In 1998 an IFA survey claimed that 92% of all franchisees were still in business, But in reality only 56% had stayed in business for 5 years and anyone who had failed weren't put into the survey.

  3. A main conflict with franchising was encroachment • Encroachment is when more than one of the same restaurants are in the same area • Ray Kroc vs.. The McDonalds Brothers Franchise: • In 1961 the McDonald Brothers retained ultimate authority within the company

  4. Ray Kroc claims that the McDonald Brothers treated workers like slaves and reaped the rewards • Resenting the McDonald brothers Ray Kroc borrowed 2.7 million dollars to buy them out

  5. Franchises were first created by General Motors in the late 1800s from a lack of money to pay workers • The first fast food chains to attempt franchising were Dunkin' Donuts and Kentucky Fried Chicken, But McDonalds mastered it

  6. They only charged a $950 franchising fee and subsequently expanded McDonalds territory • Even to this day McDonalds is the cheapest major franchiser in the fast food business

  7. Subway relies on "Development Agencies to open it's franchises“ • Its franchisees gain half of the franchise fee paid by new recruits, one third of the annual royalties, plus one third of the transfer fee whenever a restaurant is resold • If they don't reach their quota they have to pay out of their own pockets

  8. Subway all started when Frederic Deluca borrowed $1,000 from a family friend to open a sandwich shop • It's now the second largest fast food franchise

  9. Main Theme of Chapter 4 • The overall theme of “Success” was how an individual could effect a franchise and how a franchise could effect an individual and society

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