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McDonald’s NZ Franchise Overview Thank you..

...for your interest in McDonald’s® and the consistently rise to the occasion each time franchising opportunities we offer. and deliver an exceptional customer experience. The successful future of our business lies in our people – our employees and our As we must deliver this leadership, we Franchisees. McDonald’s has always been need our Franchisees to do the same in the a franchising operation and has relied on restaurants and their communities. Having its Franchisees to play a major role in our dynamic individuals who are able to create success. We have exceptional Franchisees high performance environments within their who work the front line everyday and having organisation is crucial. They must also be that personal entrepreneurship in direct great Brand Ambassadors and run contact with our customers and outstanding restaurants to deliver on our communities is a big competitive brand promise. Our Franchisees are also advantage of McDonald’s. We believe that the Mr and Mrs McDonald’s in real New “ To be successful, we need common sense, dedication to principles and a a Franchisee can deliver better Zealand. McDonald’s has always wanted operations and results than the company uncomplicated people who share our love of hard work. The harder you work and the more pride of accomplishment can by operating the restaurant. simple beliefs and are willing to get their Approximately 80% of our restaurant hands dirty to ensure our restaurants businesses in New Zealand are owned and provide customers with a quality you feel, the luckier you get. Luck is a dividend of sweat ” operated by Franchisees. experience, every day. In New Zealand, McDonald’s has more A key factor in both our growth and the than 160 restaurants together employing growth of our Franchisees is the care we over 10,000 people. It’s all due to Quality, take in recruiting, screening, training, Service, Cleanliness and Value and the developing and retaining qualified -Ray Kroc McDonald’s System of Franchising which, Franchisees – together with our unique we believe, operates better than any other. relationship with them.

Founder of McDonald’s What makes our System unique is our In this brochure we have included some business model of the three legged stool. insights from Franchisees. Each one has This concept of a partnership between worked within the framework to build their the three legs of the stool – Franchisees, business and generate success in their suppliers and our employees - is one that local community. Their stories are truly ensures our strength. inspirational and make us proud to be a part of the system. As the Franchisor it is our role to provide clear and positive leadership with vision, This brochure is designed to provide you competence and integrity. This leadership with some information and insights into will ultimately protect the strategic vision of what it is like to be a Franchisee, what we the brand. We will always put the “system are looking for and our selection process first” in our entire decision making process.

Listening and responding to our customers wants and needs through constant innovation have been key drivers to our success. This success places pressure on all parties who have a responsibility to Mark Hawthorne, Managing Director Clearing up the misconceptions -what’s involved? ark Talk to any successful McDonald’s Whilst most McDonald’s restaurants are business interests. Our restaurants Rush Franchisee and it is clear there is a lot for successful, the start of any new business is generally operate 24 hours, 7 days a week. M you to gain by joining our system. a risk and success is not guaranteed. The This means that you will be required to work success of any McDonald’s restaurant will a number of different day parts and days a Here’s a preview of some of what is depend on many factors, not the least of week to ensure the highest standards are involved. Have you got what it takes? which will be the Franchisee’s commitment met across all of your trading hours. and ability in key areas. • You are able to make a significant Our restaurants are a busy place and financial investment. One of the key reasons behind our success require an extremely hands on approach. • You are able to commit to our Registered is that we maintain the highest standards of Managing a restaurant does include an Applicant Training Programme for a operational excellence while still creating extensive list of administration duties, Mark started with McDonald’s as a crew Why did you want to become a Franchi- it. Debi does a lot to ensure she’s involved minimum of 6-12 months, depending on individual opportunities. It is essential that however, most importantly keeping your person in 1987,and worked at Head Office see? in fundraising activities, which is great. We your capability. This programme is unpaid. our Franchisees agree to the philosophy of customers happy are those tasks that for a number of years, including working on pioneered quarterly meals in the Auckland •You are looking to make a 20 year working within the framework of the happen day to day in the restaurant. Some the APMEA team for McDonald’s. Mark and I love the McDonald’s business. I had seen House and take McDonald’s in, and the commitment. McDonald’s system. examples of what is required include his wife Debi own seven restaurants across how successful the franchisees I worked kids and families just love it. It’s good to • You are open to the challenge of cooking, serving customers, cleaning, central Auckland. McDonald’s is very for had been in the business and I knew I show our staff and our people that we do relocating to anywhere within New Zealand. You will receive extensive training and talking to customers, accepting deliveries, much in the Rush family blood, with Mark’s could do a really good job if I owned one give back, and to show that we really care • You aspire to become an integral part of ongoing support, not to mention the power coaching and training staff. Your ability to older brother Brent and his wife LaVerne myself. Having your own skin in the game about our local environment and your community as an employer, service of one of the world’s best known brands lead by example will help ensure your team also owning two McDonald’s restaurants, and having control and being able to plan community. We try to be innovative in how provider, and local business leader. pulling customers in. But in the end, is well trained and most effective. There is north of Auckland. ahead and take a more long term view on we can get involved in the charity more • You are energetic and take a hands-on success is up to you. That’s why we’re the opportunity in the application process things was really enticing. than anything else. approach. looking for a certain type of business to experience three days in a restaurant to • You have had a successful business or partner: one prepared to follow a proven help you understand the scope of what is I think having been a crew person is an Best thing about being a Franchisee? career, demonstrated significant team system – the product of 55 years of food involved. asset – you know what everyone goes leadership and know how to attract and service experience. If you’re not good at through. I know what worked for me and The best thing is that you’re still able to be develop talented people. taking advice, then don’t become a Only individuals can apply to become what didn’t and I’m always aware of pitfalls I an entrepeneur and run your own business • McDonald’s will be your only business, McDonald’s Franchisee. We don’t expect a Franchisee. However, the majority of experienced and how I can avoid them with in your own way, but at the end of the day and you’re prepared to put in hard work you to reinvent the wheel, just to make it McDonald’s Franchisees have opted to our people now. you have the backing of the world’s biggest and long hours to make it a success. turn faster. incorporate a company to act as the brand. • You will commit yourself full time to the Franchisee. If you are offered a franchise Community business rather than being an absentee You must personally devote your full time you should obtain specialist advice on the What you put into it is what you get out of it investor. and best efforts to the day to day most appropriate vehicle in which to We are heavily involved in Ronald too. The harder you work and the smarter operation of the business. You must also purchase and operate the franchise. McDonald House Charities - we love that you work, the better the rewards are. It’s a divest yourself of all other competing charity and we are really passionate about good, motivating system to be part of. icholas The learning curve Garner N The franchise documentation we sign That is why our Registered Applicant are four formal classroom sessions which together allows you to operate a specific Training Programme goes for 6-12 months are spread throughout the Registered McDonald’s restaurant for a period of full-time and is unpaid. Applicant Training programme. The first up to 20 years according to McDonald’s three are held in our Auckland training standards. McDonald’s purchases or leases What does the programme cover? The lot. centre. The fourth, Restaurant Leadership the land, develops and constructs the Practices, is a five day course which is held restaurant at its own discretion and You’ll learn about all our systems and we’ll at the Charlie Bell School of Management in McDonald’s retains ownership of the train you to do every role in a McDonald’s Sydney. Your complete training programme building. As a Franchisee you equip the restaurant. And we mean every role. If the will include seminars, conferences and one restaurant at your expense with kitchen idea of cleaning turns you off, you might on one sessions with corporate staff. Nicholas Garner completed a Marketing What skills have you brought to I think I’ve grown not just as a person, but equipment, lighting, signage, seating, want to stop reading now. At the end of the Degree and worked in Corporate Marketing McDonald’s, given your previous as a business person too. landscaping, airconditioning and décor. Registered Applicant Training Programme After the satisfactory completion of your for a number of multi national corporations, experience? At McDonald’s you’re involved in every While none of this equipment is purchased you will have all of the skills you need to training and if McDonald’s in its sole and before becoming a McDonald’s Franchisee facet of the business, whether it’s from McDonald’s, it must meet McDonald’s take over a restaurant and start to apply absolute discretion continues to regard you in 1997 and now owns three restaurants in I like to think I can bring in a different administration, HR, accounts, finance or specifications. To maintain quality and your own talents to making it a success. as a suitable person in all respects to be the Auckland area and two in the Waikato perspective and some big picture thinking front line sales. Before McDonald’s I had uniformity, Franchisees must use granted a McDonald’s franchise, you may area with his wife Lynn. and experience from where I started out in never really had that front line involvement McDonald’s: The training period is unpaid and full be offered a McDonald’s franchise. There my career, outside the Golden Arches. with customers - they were just a time. This is one of the reasons we require may be a time delay between completion of Traditionally we can tend to do certain faceless crowd. With McDonald’s you very • Formulas and specifications for menu potential Franchisees to have accumulated training and the offer of a franchise things in certain ways, and it’s nice to bring quickly learn what its actually like at “ The items; some capital. You will need some financial depending on availability of a suitable some different ideas to the table. Coalface”. The end user interaction has • Methods of operation, inventory control, reserves to call on during the time you are restaurant, and you will not have a choice taught me a lot about people. bookkeeping, accounting and marketing; training. of location. I think it’s also been of benefit • Trademarks; understanding how the corporate side How does McDonald’s develop people? • Concepts for restaurant design, signage McDonald’s devotes significant time and works, as well as learning about life at the and equipment layout; and resources to its highly regarded training frontline in my Restaurants. MRL McDonald’s creates such amazing • Information systems. and evaluation programme. This (McDonald’s Restaurants NZ Ltd) works opportunities – one day you can be comprehensive programme is designed Why McDonald’s? really hard for the benefit of the brand and sweeping the floors and then in a few years As a Franchisee, you will operate the to train you in all aspects of operating a the franchisees. time you can be running the company – franchise according to McDonald’s Quality, McDonald’s restaurant and to assist McDonald’s is the most iconic brand in the take Mark Hawthorne as an example, or Service, Cleanliness and Value standards. McDonald’s in evaluating your potential as world arguably. It’s successful, it’s How have you personally grown through the number of our Franchisees who started To become a successful Franchisee, you a Franchisee. recognised and its number one - who your time at McDonald’s? work part time as a crew person. This type need to take on board everything we’ve wouldn’t want to be a part of that? of opportunity is fantastic. learned in over 55 years of successfully Most of your training will take place in a running restaurants. McDonald’s restaurant. In addition, there urray MTraill Playing an active role in your community

Even after successful completion of the At McDonald’s we believe we have a the heart of McDonald’s commitment to Registered Applicant Training Programme, responsibility to add value to the giving back is Ronald McDonald House there is no certainty that you will become a communities in which we operate and we Charities (RMHC). RMHC is one of New Franchisee. are proud to play an active role in Zealand’s major children’s charities and communities all over New Zealand. One of helps thousands of seriously ill children and Of course, the support we offer doesn’t the ways we do this is by supporting their families across New Zealand every end with the training. You learn throughout community groups and year. McDonald’s is absolutely your time as a Franchisee. A consultant charities that are important to our committed to the ongoing growth of RMHC is always on hand to give you advice and customers or that make a difference to the and provides significant financial support support. If they can’t help, there lives of New Zealanders. every year. More importantly however, it is are the expert teams at Head Office. We For our Franchisees and Restaurant the sustained interest and involvement of Murray Traill refers to himself as a Why McDonald’s? That might sound corny, but it’s absolutely also run regular communication sessions Managers selling burgers is only part of McDonald’s company staff and Franchisees ‘second generation’ Franchisee. His true.McDonald’s is the sort of business you and meetings to keep you up to date with their job as they are all committed to giving that makes the relationship a success. parents, Alan and Neti, own three McDonald’s is such a dynamic and can really believe in – it’s capable of current trends, focuses, effects of back to their local communities. The restaurants in Christchurch and Murray complete business. You learn one step at a unbelievable things. To own a McDonald’s legislation and future plans. flexibility of the McDonald’s system means Beyond RMHC our current focus on owns four. Murray has early memories of time as a Franchisee and then, before you restaurant is hard work but the rewards You will even get your say in McDonald’s that each Franchisee can contribute locally encouraging active lifestyles means that helping out in his parents’ McDonald’s know it, you can be successfully running a and opportunities you get from it are simply plans through your representative on the in a way that is most relevant and we have an added interest in supporting restaurants from when he was around multi million dollar, international business. incredible. Kiwi Leadership Team. Management is appropriate for themselves and their programmes that encourage physical eleven years old. It’s also great that when you need it, that accessible and they really do listen to community. Giving back to the community activity. In addition to the thousands of helping hand is always there. Most rewarding people moment? Franchisees. So in a small way, you’ll be is a fundamental part of our business contributions made by McDonald’s able to influence the development of one of philosophy dating back to McDonald’s restaurants to their local community, the What advice do you have for people There are so many small things, like the world’s great brands. founder, Ray Kroc and is carried on today company and Franchisees join together to wanting to own a McDonald’s Franchise? bumping into an ex employee who might by the company and our Franchisees. At support other national sponsorships. have left McDonald’s as a stroppy teen five McDonald’s is a hungry business and it to ten years earlier, and them really makes you want to strive to be the acknowledging that their time at best. So if you are prepared to invest not McDonald’s had such a significant and just money but time and heart into the positive effect on their career and business, then your dreams really can life - that’s a real buzz. come true. Money matters inesh – financial investment & rewards DMani The following indicative costs and estimates Term of Franchise 20 Years (except where restricted by the term of a head lease) are subject to change without notice. Actual costs will only be determined when a A monthly service / royalty fee based on a percentage of the restaurant’s specific restaurant is offered to a gross sales (currently 5%) Registered Applicant. Size of the restaurant A monthly rental being a fixed base rent and a percentage of the facility, location and style of décor and restaurant’s gross sales landscaping will affect costs. Outgoing fees A monthly advertising contribution of not less than 4% of gross sales Equity requirements All outgoings including rates and utilities. Dinesh Mani started his McDonald’s career Why McDonald’s? The good thing with our team is that we only The current minimum equity requirement for as a crew person at McDonald’s in New set direction - our team is responsible for a new restaurant is 40% of the total Lynn as an 18 year old, while studying at I was always inspired by Ray Stonelake the strategy and how that direction is equipment/décor package (i.e. 60% Franchise fee paid to McDonald’s on or prior to the commencement of the franchise (if restaurant is University. After working his way up through (former McDonald’s Franchisee) - he taught implemented in our restaurants. maximum borrowings). This minimum equity McDonald’s, including spending time me to look beyond the job and look at the purchased from another franchisee then no NZ $75,000 percentage can be reduced to 30% if you Franchise fee is payable for the current term of the working at McDonald’s New Zealand’s restaurant not just as his, but as my Best thing about being a McDonald’s are able to demonstrate that the extra 10% restaurant) Head Office, Dinesh is now the proud business too. I cared about the success of Franchisee? equity is held outside the business and owner of McDonald’s New Lynn and four the restaurant, so that helped me learn and Security deposit for the performance of the would be available to inject into the NZ $25,000 other McDonald’s restaurants. grow over time. The best thing about McDonald’s is that it’s restaurant if required. (A signed Initial costs franchise a secure business, the foundation is solid. (new restaurant) acknowledgement that these funds will be Application fee (non-refundable) NZ $1,600 Greatest achievements? Although there are systems, if you follow injected if necessary, will be required). the systems properly you can’t go wrong. Approximate cost of living expenses whilst NZ $150,000 - Receiving a Waitakere Business Award was It’s a proven system and it works - it’s up to The current minimum equity requirement for training, staff training, salaries, purchase of $200,000 one of the proudest moments for us, as Franchisees to take it to the next level and an existing restaurant is 33% of McDonald’s trading stock, and other normal start up expenses (indicative costs) well as getting 2009 Operator of the Year make it their own, and most importantly assessment of fair value (i.e. 67% maximum and winning a Mac Black Award was a big to enjoy it along the way. I don’t think any borrowings). This minimum equity Approximate cost of kitchen equipment, signage, NZ $1.5 Million thing for us too. But the reason we do well other franchised operation is as strong and seating, décor, air conditioning and landscaping percentage can be reduced to 25% if you (indicative costs) is because of our staff - they deliver for us as well developed as McDonald’s. are able to demonstrate that the extra 8% (paid to suppliers) and we are really proud of them. equity is held outside the business and would be available to inject into the restaurant if required. (A signed acknowledgement that these funds will be injected if necessary, will be required). The select few

You may be the right person if you have a Checkpoint: This is an opportunity for both To find out if you qualify to enter Stage 1, go proven track record and can demonstrate McDonald’s and you as the applicant to assess to the Franchising section of our website: your ability in the following areas: your application so far and decide whether or not www.mcdonalds.co.nz/about us/Franchi- to proceed to the next stage. sees where you will find our contact details. • Recruiting and developing talented Stage 3 Once you have submitted your completed teams. A On the job evaluation. We ask you to spend application form you will then be notified • Creating and implementing business three days in one of our restaurants (usually on whether you qualify to enter Stage 1. plans with short and long term objectives. the busiest days of the week: Friday, Saturday, • Delivering financial results in a Sunday) learning about life in a restaurant. You During the course of our selection process commercial environment. will be making burgers, serving customers, and the Registered Applicant Training doing everything that a McDonald’s team member • Managing teams in a high pressure, Programme, McDonald’s has the right would. Your performance on the job will be dynamic workplace. assessed by the host Franchisee and you will be to terminate your participation in its sole rent • Working in a high-volume, high turnover asked to prepare a presentation on your discretion and without being required to customer environment. experiences for the Panel Interview at the end of provide you with any reasons. Rush • Working in a highly standardized your On the Job Experience (OJE). This three B operational/production oriented days also includes an interview with Of course, you are also able to terminate environment. representatives from our finance department. your participation at any time. • Managing a capital intensive business. B Meeting with existing Franchisees. You • Having personal accountability for the probably have lots of questions about what it’s If you participate in the above selection success of a business with little support. really like to be a Franchisee, so this is your process you will incur costs for: opportunity to make contact with some of them • An application fee payable before Our selection process has 5 stages: and get the low down. commencement of Stage 1 • Travel to our Auckland office, perhaps Stage 1 Checkpoint: This is an opportunity for both more than once. Brent Rush has been involved in brand defining – it’s one of, if not the, most rewarding those who make the effort to A We ask that you complete our application McDonald’s and you as the applicant to assess • Travel to the regional evaluation McDonald’s since 1981, having worked his recognised and powerful brands. excel. It’s about having pride in yourself your application so far and decide whether or not form, and post it to us with a cheque for $1600 to restaurant and perhaps accommodation for way up from crew person to Franchisee. Ray Kroc, our McDonald’s founder, defined and your business and being able to walk activate the recruitment process. to proceed to the next stage. four nights. Brent and his wife LaVerne own two our brand correctly from the word go, and in that restaurant and feel good about our B Phone interview. This is an opportunity for us Stage 4 • Travel to Auckland for the Senior McDonald’s restaurants – in that’s really filtered through. McDonald’s is people and our business. to find out some more information about you, that Interview with McDonald’s Senior Management Management Team interview. Whangaparaoa and Orewa. The extended all about the people, and how the people supports your application, and it’s also an Team. We invite you to McDonald’s headquarters Rush family is very much involved in the make the system better off. Without the We feel passionate about what we do and opportunity for you to ask any questions you have in Greenlane, Auckland for a 1.5 hour interview There is also the cost of your time as you McDonald’s business. Brent and LaVerne’s people, we wouldn’t survive. we expect the same from our staff. about the application process. with our Senior Management Team. will need to bear in mind that McDonald’s four children work across their two You can’t be in this job for money, you have will not pay you for the time you spend restaurants and Brent’s brother Mark and How do you create high performance in to love what you do. It’s the McDonald’s Checkpoint: This is an opportunity for both Checkpoint: This is an opportunity for both participating in the selection and training his wife Debi also own seven your restaurants? brand and the McDonald’s way. McDonald’s and you as the applicant to assess McDonald’s and you as the applicant to assess your application so far and decide whether or not your application so far and decide whether or not process. restaurants in central Auckland. to proceed to the next stage. to proceed to the next stage. I think creating a high performing What is the best thing about being a If after reading this document you feel that environment is very much reflective of how Franchisee? Stage 2 Stage 5 you have what it takes and are interested in serious you look at your job and what you A Personality and Ability Testing. You will need Registered Applicant Training Programme. applying then go to: feel you need to do to have your business McDonald’s gives us the ability to employ The programme is when we train you to be a to complete a personality questionnaire and some mcdonalds.co.nz/about us/franchisees perform. That’s the difference between so many people and learn about them. We ability tests. These tests give us more information Franchisee. It is full time and takes place over whether you’re going to accept mediocrity have the ability to change people’s lives, about your suitability to become a Franchisee. a 6-12 month period in one of our restaurants, You will receive a report summarising the results. where you will learn in depth all of the systems or whether you strive for high performance. and I think we have done that on a number and processes involved in running a McDonald’s of occasions. We love to see our crew B We will invite you to McDonald’s headquarters restaurant. What makes McDonald’s different? At McDonald’s, we don’t accept really grow as people - it’s so rewarding to in Greenlane, Auckland, for a 2.5 hour face to mediocrity. We put incentives and see that. face interview. During this interview we will ask McDonald’s has so much more to offer than programmes in place to reward our high more competency based questions and give you any other brand. The Golden Arches are performers – it’s about recognising and feedback on your personality and ability tests. am SMaharaj Gold has always been a great investment.

Sam Maharaj started at McDonald’s when McDonald’s encourages you to be what your community thinks - I think that’s he was in high school, working part time proactive and think about what you can be really powerful. And to be able to go back while he was at University and working his doing to make the business better, rather to the restaurants and relate that back to way up through McDonald’s, including than always taking direction and having to your people, that’s the best part about it. being the Director of Operations for be told what to do. I think those McDonald’s New Zealand, before learnings are taken through life, regardless Community relationships? becoming a Franchisee. Sam now owns of when you leave the system, and they’re four McDonald’s restaurants across so important. The value of supporting community groups Auckland. and events is huge - just how thankful What makes you proud to be a people are and how grateful they are that McDonald’s Franchisee? you have supported them. It’s really rewarding to hear stories about how you Lots of things, but the big thing is when I’m have contributed to an individual. Recently out in public and I’m talking to someone, I spoke to a woman who said her son would when you introduce yourself, and for the have pulled out of the sport he had played next 15 minutes they’re talking about how had it not been for the extra coaching good McDonald’s is. When you’re at that support he received thanks to our Development opportunities? stage, with someone else talking about sponsorship of coaches and now his true how great the business is, it makes you potential has come out and he is playing McDonald’s helps you develop as an extremely proud. out of his skin. It’s really rewarding to hear individual, and provided you get engaged stories like that. The majority of our in the business, and really give it I get so much satisfaction from growing a customers are from our local communities everything, it teaches you how to be a solid, successful business but it is so and you can’t forget that. well rounded individual. important to have that balance in knowing