Fast Food NationChapter 4“Success”

Fast Food Nation Chapter 4 focuses on Franchising

Franchising allowed people to enter the fast food business with lower risk and higher payout

In 1998 an IFA survey claimed that 92% of all franchisees were still in business, But in reality only 56% had stayed in business for 5 years and anyone who had failed weren't put into the survey.

A main conflict with franchising was encroachment

Encroachment is when more than one of the same restaurants are in the same area

Ray Kroc vs.. The McDonalds Brothers Franchise:

In 1961 the McDonald Brothers retained ultimate authority within the company

Ray Kroc claims that the McDonald Brothers treated workers like slaves and reaped the rewards

Resenting the McDonald brothers Ray Kroc borrowed 2.7 million dollars to buy them out

Franchises were first created by General Motors in the late 1800s from a lack of money to pay workers

The first fast food chains to attempt franchising were Dunkin' Donuts and Kentucky Fried Chicken, But McDonalds mastered it

They only charged a $950 franchising fee and subsequently expanded McDonalds territory

Even to this day McDonalds is the cheapest major franchiser in the fast food business

Subway relies on "Development Agencies to open it's franchises“

Its franchisees gain half of the franchise fee paid by new recruits, one third of the annual royalties, plus one third of the transfer fee whenever a restaurant is resold

If they don't reach their quota they have to pay out of their own pockets

Subway all started when Frederic Deluca borrowed $1,000 from a family friend to open a sandwich shop

It's now the second largest fast food franchise

Main Theme of Chapter 4

The overall theme of “Success” was how an individual could effect a franchise and how a franchise could effect an individual and society