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Dayan V. Mcdonald’s Corp. (P. 9)

1500 words - 6 pages

Dayan v. McDonald’s Corp. (p. 9)

The client: McDonald’s Corp

Background of the case:
McDonald's gave Dayan an exclusive franchise to operate McDonald’s restaurants in Paris, France. McDonald’s required Dayan adhere to all quality, service, and cleanliness standards set by McDonald’s, Dayan agreed. The parties made an agreement which stated the reason for Dayan must maintaining QSC standards was that a “departure of restaurants anywhere in the world from these standards impedes the successful operation of restaurants throughout the world, and injures the value of [McDonald’s] patents, trademarks, trade name, and property.” Dayan promised he would not in violation of the standards ...view middle of the document...

If McDonald’s makes mistakes on choose franchisees, like give the exclusive franchise to the dealers without operation experience and ability in foodservice industries and/or poor credit situation, then the choice may lead to negative effects like McDonald’s worries about “departure of restaurants anywhere in the world from these standards impedes the successful operation of restaurants throughout the world, and injures the value of [McDonald’s] patents, trademarks, trade name, and property.” (p. 9). Making background check, especially whether the dealer has good reputation in foodservice industry or other industries, the condition of he/she implementation of the contract with other companies, or whether the dealer involved in litigation before giving the franchise to the deals can effectively avoid this problem.

② Investigating the background is helpful for McDonald’s to have a comprehensive understanding with dealers before signing contract with them, and then McDonald’s gets dominant position in business negotiation, sings contract which has more advantages to McDonald’s, and regulates detailed provisions of McDonald’s rights and obligations, especially in what circumstances, it can terminate the franchise.

(2) disadvantages
① The background of franchisees only represents the past, do not represents the future. The people who have the good record in the past do not mean they will behave will in future. So the people who executive good in other contract or abide by other standard still have certain possibility violation the standards set by McDonald’s in their contracts;

② If McDonald’s totally rules out the franchisees who without industry experience, it may miss the franchisees with development potential, this kind of situation has negative effect for McDonald’s business expansion.

2 set McDonald’s flagship store, organize new franchisees study and experience in the store before they open their new business
(1) advantages
① Through field observation and experience the running mode, operation standards and operation situation of the flagship store, new franchisees can state strong intuitive feelings; it has more direct effect than just study information from manual book or pamphlet provided by McDonald’s.

② The flagship store is the model store through strict screening by McDonald’s headquarter, the store’s operation process, standards and operation condition have been proven, adjusted and improved in practice, and the practice proved the flagship store is better than other dealership in theses aspects, so learning practical experience from such kind of store gives learning role model to new franchisees, and makes new franchisees conscientiously conforming to the standards set by the McDonald’s.

(2) disadvantages
① The cultivation of the flagship store need to pass a certain accumulation, it spend a long time, so it is difficult to find a suitable flagship store for new franchisees to visit and learning in the new...

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