McDonalds in Kazakhstan Essay Example | Topics and Well Written Essays - 1250 words

McDonalds in Kazakhstan - Essay ExampleMcDonalds generates revenues through company operated restaurants and righte restaurants. Of a rack up of over 31,000 restaurants, over 8000 are operated by the company and over 18,000 are operated by libertyes. The remaining restaurants are operated by affiliates. The companys revenue comprises sales from company operated restaurants and fees as well as rent from franchisees and affiliates.Under the franchise arrangement, the franchisees invest in the equipment, signage, seating and dcor, while the company owns or leases the land and building. Franchisees pay the company help fees and rent for premises. Service fees are set as a percentage of sales, while rent and other terms of occupancy are stipulated in the franchise agreement, which is drawn for a period of 20 years. The company and its franchisees as well as affiliates purchase food, packaging, equipment and other goods from approved suppliers. The company maintains quality standards t hrough trust labs around the world. A quality assurance board, including the companys technical, safety and supply chain specialists, provides guidance on all aspects of food quality and safety.The McDonalds business model is about different from that of most other fast food chains. In addition to ordinary franchise fees, supplies and percentage of sales, McDonalds also collects rent. As a condition of the franchise agreement, McDonalds owns most properties. Since rent is a fee that is not linked to sales, this practice allows McDonalds more control over its franchisees (Rumbelow, 1 February 2001).As the worlds largest fast food company, McDonalds was the rate of criticism on many grounds over the review period. It has been accused of the exploitation of entry-level workers and ecological damage caused by agricultural production and industrial impact of its products with high levels of packaging waste. Critics claim it sells unhealthy or non-nutritious food with exploitative adv ertising targeted at children and contributes to the suffering and exploitation of livestock. McDonalds has also been criticised for its litigious and heavy-handed begin to preserving its image and copyrights. Consequently, McDonalds recorded its first ever global loss in the last quarter of 2002 and in Europe sales plunged 3.8% in January 2003. To combat this, McDonalds underwent a fundamental revolution in its approach to menus, marketing and consumers in 2003. In the UK, McDonalds is improving its standards and continued to work with government and health officials to investigate improvements (Euromonitor, 29 November 2005).On the other hand, Kazakhstan is a relatively new nation as it gained independence from Soviet Union in 1991. McDonalds has is one of the countries it has to conquer. Kazakstans 1,052,100 square miles (2,724,900 square kilometres) make it by far the largest state in Central Asia and the ninth largest in the world. Between its most distant points Kazakstan mea sures about 1,820 miles (2,930 kilometres) east to west and 960 miles north to south. While Kazakstan was not considered by authorities in the former Soviet