Question
McDonalds and Buffalo Wild Wings: Comparing two restaurant chains. McDonalds Corporation franchises and operates more than 30,000 fast-service restaurants in 119 countries. Buffalo Wild Wings
McDonalds and Buffalo Wild Wings: Comparing two restaurant chains.
McDonalds Corporation franchises and operates more than 30,000 fast-service restaurants in 119 countries. Buffalo Wild Wings franchises and operates more than 500 restaurants in the United States. Buffalo Wild Wings features chicken wings and a full bar in its restaurants.
Financial information for each company follows. EBI denotes after-tax earnings before interest
Buffalo Wild Wings | |||||
2007 | 2008 | 2009 | 2010 | 2011 | |
Number of stores operating at year end | |||||
Company owned | 161 | 197 | 259 | 319 | 319 |
franchised | 332 | 326 | 420 | 473 | 498 |
Revenue in Millions | |||||
Company owned Stores | 379.7 | 488.7 | 555.2 | 717.4 | |
Franchise fees | 42.7 | 50.2 | 58.1 | 67.1 | |
Total | 422.4 | 538.9 | 613.3 | 784.5 |
McDonalds | |||||
2007 | 2008 | 2009 | 2010 | 2011 | |
Number of stores operating at year end | |||||
Company owned | 6,906 | 6502 | 6262 | 6399 | 6435 |
franchised | 25,465 | 25,465 | 26,216 | 26,338 | 27,075 |
Revenue in Millions | |||||
Company owned Stores | 16,560.9 | 15,458.5 | 16,233.3 | 18,292.8 | |
Franchise fees | 6,961.5 | 7,286.2 | 7,841.3 | 8,713.2 | |
Total | 23,522.4 | 22,744.7 | 24,074.6 | 27,006.0 |
Required:
Assume that for both companies sales at company-owned stores are the same (on a per store basis) as sales for the same company's franchised stores. Estimate each company 's franchise fee rate, which is stated as a percentage of each franchisse's sales revenue.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started