McDonaldâs and Buffalo Wild Wings: Comparing two restaurant chains.
McDonaldâs 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
McDonaldâs
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.
McDonaldâs and Buffalo Wild Wings: Comparing two restaurant chains.
McDonaldâs 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 | |
| McDonaldâs | |||||
| 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.
