McDonald's Corporation

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McDonald's Corporation (NYSE: MCD (http://www.nyse.com/about/listed/lcddata.html?ticker=MCD)) is the world's largest chain of fast-food restaurants [1] (http://biz.yahoo.com/p/eatingmktd.html). Although McDonald's did not invent the hamburger or fast food, its name has become nearly synonymous with both.

McDonald's brand is in 121 countries around the world. Thirty-thousand local locations serve 47 million customers each day. More than 70% of McDonald's restaurants around the world are owned and operated by independent, local businessmen and women.

In addition, the company operates other restaurant brands, such as Aroma Café, Boston Market, Chipotle Mexican Grill, Donatos Pizza and Pret a Manger. Revenues for 2001 were US$14.87 billion, with net income at $1.64 billion.

In North America, most McDonald's offer both counter and drive-through service, with indoor and sometimes outdoor seating. Drive-through services are offered in the rest of the world, but they are not as common - with the majority of restaurants offering counter service only. Drive-throughs often have separate stations for placing, paying for, and picking up orders, though often the latter two steps are combined.

(In early 2005, it was announced that the company was experimenting with using a call center in Fargo, North Dakota to take the drive-through orders from more than a dozen stores in Oregon and Washington states. The minimum wage in North Dakota is significantly lower than that in Oregon or Washington.)

In some countries "McDrive" locations, near highways, offer no counter service or seating. Locations in high-density neighborhoods, as in many downtowns, often omit drive-through service.

Specially themed restaurants also exist, such as Rock-and-Roll McDonald's 50s themed restaurants. A select few McDonald's in many areas, such as suburban areas and certain cities feature large indoor or outdoor playgrounds, called McDonald's PlayPlace. These were primarily created in the 1970s and 1980s in the USA, but later internationally; much of Canada didn't have them until the mid-1990s. Older locations often retain the name Playland.

The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees, supplies and percentage of sales, McDonald's also collects rent, partially linked to sales. As a condition of the franchise agreement, McDonald's owns the property on which most McDonald's franchises are located. According to Harry J. Sonneborn, one of McDonald's founders:

"We are in the real estate business. The only reason we sell hamburgers is because they are the greatest producer of revenue from which our tenants can pay us rent."

McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.

According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the US has at some time been employed by McDonald's. The book also states that McDonald's is the largest private operator of playgrounds in the US, as well as the single largest purchaser of beef, pork, and potatoes.

As the world's largest restaurant chain, McDonald's is a target for criticism. Even though the majority interest in its foreign franchise locations are locally owned, the company is seen as a symbol of American domination of economic resources. Urban legends about the company and its food abound and it is often the target of unusual lawsuits.

Some franchises in the Middle East have been targets of arson and other acts of violence because the business represents, to the attackers, an invasion by American business and culture that they oppose based on a nationalist or Islamist ideology.

However, McDonalds has modified its products to cater for local tastes, not least in countries that have special dietary laws. In Muslim countries like Malaysia, bacon is not served in McDonalds burgers or in its breakfast menu, as pork is haram, or not permissible under Islamic dietary law. In Israel, the nature of kosher dietary laws, forbidding the mixture of meat and dairy products, means that cheeseburgers are not popular among Jewish customers; furthermore, all meat not prepared in a certain manner is considered unkosher by strict observers of the dietary laws. McDonalds has taken steps to cater to Jewish customers by opening a kosher McDonalds in Jerusalem and by offering a 'Passover Bun' for the eight-day period in which practicing Jews abstain from leavened bread. In India, the fact that Hinduism forbids the eating of beef has prompted McDonalds to look for alternatives, like lamb.

Soft drinks on offer also vary from country to country, with local brands available on tap alongside Coca Cola, Fanta, etc. For example, Irn Bru in Scotland and Guarana in Brazil are more popular in those countries than the leading international brands.

As the world's largest fast-food company, McDonald's has been the target of criticism for allegations of exploitation of entry-level workers, ecological damage caused by agricultural production and industrial processing of its products, selling unhealthy food, production of packaging waste, exploitative advertising (especially targeted at children), and contributing to suffering and exploitation of livestock. McDonald's historic tendency towards promoting high calorie foods such as French fries has earned it the nickname "the starchy arches".

In the high profile McLibel Trial, McDonald's took two anti-McDonald's campaigners, Helen Steel and Dave Morris, to court for a trial lasting two and a half years?the longest in English legal history and part of a 20-year battle?after the pair distributed leaflets critical of the company in London's streets. McDonald's won the case in the UK courts but it was later overturned by the European Court of Human Rights (on the grounds that the pair's right to a fair trial and freedom of expression had been violated). Despite the fact that many of the campaigners' criticisms of the company were found to be libelous by the UK courts, the suit created a great deal of bad publicity for the company especially as many of the leaflet's claims were upheld by the judge in his summary (http://www.mcspotlight.org/case/trial/verdict/verdict0_sum.html). For more information, see McLibel case.

McDonald's has also been criticised for its approach to preserving its image and copyrights - in one case suing a Scottish cafe owner called McDonald for infringement of the name McDonald's, even though the business in question was a family business dating back well over a century. In another case, McDonald's enjoined the creator of Ronald McDonald from performing as, or displaying the likeness of, the character in any form. McDonald's also replaced the performer who portrayed Ronald in the first three television ads (Willard Scott, a former Bozo) which featured Ronald McDonald. In South Africa, however, McDonald's had to battle against the country's trademark laws, which stated that a registered trademark had to be used within a certain period of time. This resulted in a local company announcing plans to launch its own fast food chain using the McDonald's name, although the South African High Court eventually ruled in McDonalds' favor.

In June 2004 the UK's Private Eye reported that McDonald's was handing out meal vouchers, balloons, and toys to children in pediatric wards. This was especially controversial as the report was made within weeks of a British Government report stating that the present generation may be the first to die before their parents due to spiraling obesity in the British population.

In 2004, Morgan Spurlock's documentary film Super Size Me produced negative publicity for McDonald's, with allegations that McDonald's food was contributing heavily to the epidemic of obesity (http://www.surgeongeneral.gov/news/testimony/obesity07162003.htm) in American society. Subsequent to the showing of the film at the Sundance Film Festival, but before its cinematic release, McDonald's phased out its Supersize meal option and began offering several healthier menu items though no link to the film was cited in this decision.