Introduction
You may not know it, but McDonald’s is one of the largest real estate companies in the world. In fact, they’re so good at it that they own more than 35% of their stores and have plans to increase that number to 50%. So what exactly does this mean? Well, let’s take a look at their history first.
McDonald’s started out as a small burger joint in San Bernardino, CA by two brothers named Dick and Mac McDonald back in 1940.
Their first restaurant didn’t even have tables or chairs–customers would order at their cars through windows before going inside for their food! They eventually added some seating after realizing how popular their burgers were becoming; however, despite being wildly successful (with over 1 million customers per day), they couldn’t keep up with demand due to lack of space available within each location.
McDonald’s Real Estate Footprint.
McDonald’s real estate footprint is impressive. The company owns about 30 percent of its restaurants, which means it has a vested interest in making sure those locations are profitable and well-maintained. McDonald’s also leases about half its locations from third parties, many of which are high-traffic areas like airports and malls.
As part of their focus on sustainable buildings, McDonald’s has invested heavily in LEED certification for new restaurants–about 50 percent have received this designation so far–and they plan to continue investing in green technologies going forward (including solar panels).
McDonald’s Business Model
McDonald’s business model is based on franchising. This allows the company to focus on its core competencies and allows it to grow by selling off individual stores, rather than having to open new ones themselves.
McDonald’s has been able to use real estate as a way of increasing profitability by selling or leasing properties at higher prices than they paid for them. In addition, they have used their control over the land around their restaurants as leverage when negotiating leases with landlords who want access points for customers (e.g., drive-through windows).
McDonald’s Real Estate Strategy
McDonald’s real estate strategy is to focus on location and long-term leases. The company has been around since 1954, but it wasn’t until the 1980s that they started focusing on their real estate operations.
The company identified three main reasons why they needed a real estate strategy:
They wanted to build sustainable buildings that would last for decades (or even centuries).
They wanted to own the land underneath their restaurants so they could control the design of those buildings and improve their appearance over time as technology improved or changed consumer tastes shifted toward more modern designs.
McDonald’s wanted control over its own destiny by owning all of its locations instead of leasing them from landlords who could raise rents at any moment if business declined due to competition from other fast food chains or other factors beyond McDonalds’ control.
The Future of McDonald’s Real Estate
McDonald’s has been a leader in innovation, sustainability and technology. The company has used its real estate to support these initiatives by building new restaurants that are more energy efficient and environmentally friendly. In fact, the company has committed to using only renewable resources by 2020.
The future of McDonald’s real estate will continue to be shaped by these priorities as well as by its commitment to providing customers with great experiences at every touch point of their journey with us – from ordering on mobile devices or kiosks; through delivery; up until they’re enjoying their meal at home or work (or wherever else).
Conclusion
3 Things You Learned from This Case Study
- The Importance Of Real Estate In The Success Of A Business: McDonald’s success can be attributed in part to its real estate strategy. By owning a significant percentage of its locations, the company is able to control the design, upkeep, and profitability of those locations.
- The Benefits Of Franchising: McDonald’s business model is based on franchising, which allows the company to focus on its core competencies and expand without having to open new locations themselves. This has enabled them to scale quickly and efficiently.
- The Role Of Sustainability and Innovation In Business Strategy: McDonald’s has invested heavily in sustainable and energy-efficient buildings, renewable resources, and new technologies to enhance the customer experience. These initiatives are not only good for the environment, but they also help the company stay competitive and relevant in a rapidly changing market.