McDonald's

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McDonald's Corporation
Type	Public (NYSE: MCD)
Founded	May 15, 1940 in San Bernardino, California
Founder	Dick and Mac McDonald
Headquarters	Oak Brook, Illinois, USA
Key people	Ray Kroc, corporate founder Jim Skinner, CEO Ralph Alvarez, president and COO Ronald McDonald, corporate spokesman
Industry	Restaurants
Products	Fast food, including hamburgers (and its signature Big Mac and Quarter Pounder sandwiches), Chicken McNuggets, french fries, milkshakes, salads, baked individual-sized pies, sundaes, children's meal ensembles, and breakfast items (including its signature Egg McMuffin sandwich)
Revenue	$20.460 Billion USD (2005)
Net income	$2.602 Billion USD (2005)
Employees	447,000 (2005)[1]
Slogan	i'm lovin' it
Website	www.mcdonalds.com

McDonald's Corporation (NYSE: MCD) is the world's largest chain of fast-food restaurants, primarily selling hamburgers, chicken, french fries, milkshakes and soft drinks. More recently, it also offers salads, fruit and carrot sticks.

The business began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in San Bernardino, California. Their introduction of the "Speedee Service System" in 1948 established the principles of the modern fast-food restaurant. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955, the ninth McDonald's restaurant overall. Kroc later purchased the McDonald brothers' equity in the company and led its worldwide expansion.

With the successful expansion of McDonald's into many international markets, the company became a symbol of globalization and the spread of the American way of life. Its prominence also made it a frequent subject of public debates about obesity, corporate ethics and consumer responsibility.

Contents 1 Corporate overview 1.1 Types of restaurants 1.2 Children's areas 1.3 Redesign 1.4 Business model 2 McCafé 3 Global impact 4 Criticism 4.1 Legal challenge over trans fats 4.2 Arguments in defense of McDonald's 5 Legal cases 6 McDonald's advertising campaigns and slogans 7 Parodies in popular media 8 Gallery 9 References 10 See also 10.1 Competitors 10.2 Criticism 10.3 Miscellaneous

Corporate overview

McDonald's restaurants are found in 120 countries and territories around the world and serve nearly 54 million customers each day. The company also operates other restaurant brands, such as Piles Café and Boston Market, and has a minority stake in Pret a Manger. The company owned a majority stake in Chipotle Mexican Grill until completing its divestment in October 2006. Until December 2003, it also owned Donatos Pizza. It also has a subsidiary, Redbox, which started in 2003 as 18-foot (5.5 m) wide automated convenience stores, but as of 2005, has focused on DVD rental machines.

Types of restaurants

Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. Drive-Thru, Auto-Mac, Pay and Drive, or McDrive as it is known in many countries, often has separate stations for placing, paying for, and picking up orders, though the latter two steps are frequently combined; it was first introduced in Arizona in 1975, following the lead of other fast-food chains. In some countries "McDrive" locations near highways offer no counter service or seating. In contrast, locations in high-density city neighborhoods often omit drive-through service. There are also a few locations, located mostly in downtown districts, that offer Walk-Thru service in place of Drive-Thru.

Specially themed restaurants also exist, such as the "Solid Gold McDonald's," a 1950s rock-and-roll themed restaurant. In Victoria, British Columbia, there is also a McDonald's with a 24 carat gold chandaleir and similar light fixtures.

Children's areas

Some McDonald's in suburban areas and certain cities feature large indoor or outdoor playgrounds, called "McDonald's PlayPlace" (if indoors) or "Playland" (outdoors). The first PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987 in the USA, with many more being constructed soon after. Some PlayPlace playgrounds have been renovated into "R Gym" areas.

"R Gyms" are in-restaurant play area that features interactive game zones designed for children aged 4 to 12. Equipped with stationary bicycles attached to video games, dance pads, basketball hoops, monkey bars, an obstacle course, and other games which emphasize physical activity. [2]

The "R Gym" features the Toddler Zone, an active play environment with age appropriate games that develop physical coordination and social skills; the Active Zone, designed for children aged four-to-eight that promotes physical fitness through fun play; the Sports Zone which features a series of sport oriented activities to promote aerobic exercise for children aged 9-to-12; the Parent Zone which features seating and provides a monitoring area for their children; and the Dining Area which allows families to eat.

Redesign

In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of their restaurants, the first major redesign since the 1970s. [3] [4]

The new design will include the traditional McDonald's yellow and red colors, but the red will be muted to terra cotta, the yellow will turn golden for a more "sunny" look, and olive and sage green will be added. To warm up their look, the restaurants will have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls.

The exterior will have golden awnings and a "swish brow" instead of the traditional double-slanted mansard roof.

The new restaurants will feature areas:

• The "linger" zone will offer armchairs, sofas, and Wi-Fi connections, a concept introduced by Starbucks.

• The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; Plasma TVs will offer them news and weather reports.

• The "flexible" zone will be targeted toward families and will have booths featuring fabric cushions with colorful patterns and flexible seating.

Different music will be targeted to each zone.

Business model

The McDonald's Corporation's business model is slightly different from that of most other fast-food chains. In addition to ordinary franchise fees, supplies, and percentage of sales, McDonald's also collects rent, partially linked to sales. As a condition of the franchise agreement, the Corporation owns the properties on which most McDonald's franchises are located. The UK business model is different, in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company. McDonald's trains its franchisees and others at Hamburger University in Oak Brook, Illinois.

According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. (According to a news piece on Fox News this figure is one in ten). The book also states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The meatfoods McDonald's uses vary with the culture of the host country.

McCafé

McCafé is a café style accompaniment to McDonald's restaurants.

Due to popularity of Starbucks and coffeeshops in general, McDonald's introduced McCafes to capitalize on this latest trend. McCafé is a concept of McDonald's Australia in 1993. Today most McDonald's in Australia have McCafés located within the existing McDonald's restaurant. In Tasmania there are McCafés in every store.

As of the end of 2003 there were over 600 McCafés worldwide.

McCafe is also becoming increasingly present in southeastern Michigan restaurants, according to an internal source. The company looks to have all restaurants McCafe capable by the end of the 2007 fiscal year. The first McCafés will open in March.

According to a March 2006 article in Consumer Reports, McDonald's beat out Starbucks, Burger King, and Dunkin' Donuts in a coffee taste test. This was surprising news to some, as McDonald's has been historically known for burgers, fries, and shakes, not coffee.^[2]

Global impact

McDonald's has become emblematic of globalization, sometimes referred as the "McDonaldization" of society. The Economist magazine uses the "Big Mac index": the comparison of a Big Mac's cost in various world currencies can be used to informally judge these currencies' purchasing power parity. Because McDonald's is closely identified with United States culture and lifestyle, its international business expansion has been termed part of Americanization and American cultural imperialism. McDonald's remains a target of anti-globalization protesters worldwide.

Thomas Friedman observed that no country with a McDonald's had gone to war with another. His "Golden Arches Theory" has since been intact however faces challenges. First when the U.S. invaded Panama (which has had McDonald's restaurants since the late-1970s) in 1989, and later when NATO bombed Serbia in 1999 (however Friedman argues that the Kosovo Crisis was a Civil War - which does not count in the theory).

Some observers have suggested that the company should be given credit for increasing the standard of service in markets it enters. A group of anthropologists in a study entitled Golden Arches East (Stanford University Press, 1998, edited by James L. Watson) looked at the impact McDonald's had on East Asia, and Hong Kong in particular. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to demand the same of other restaurants and institutions. In East Asia in particular, McDonald's have become a symbol for the desire to embrace Western cultural norms. McDonald's have recently taken to partnering up with Sinopec, China's second largest oil company, in the People's Republic of China, as it begins to take advantage of China's growing use of personal vehicles by opening numerous drive-thru restaurants. ^[3]

In addition to its effect on business standards, McDonald's has also been instrumental in changing local customs. By popularizing the idea of a quick restaurant meal, Watson's study suggests, McDonald's led to the easing or elimination of various taboos, such as eating while walking in Japan. McDonald's also flattens the social strata during dining — there is no problem of losing face for certain customers (who might be embarrassed when someone else ordered a more expensive item in a restaurant); the food at McDonald's is all similarly priced.

Criticism

Because McDonald's multi-national, multi-billion dollar business and standardized products and procedures have come to symbolize globalization and the American way of life, the company has often found itself a target of activism and a focal point of public debate. In particular, it has generated much discussion about corporate ethics, consumer responsibility, obesity, the environment, intellectual property, animal rights, the death of many due to heart problems, to offense of both the Islamic religion and the Jewish religion, and the destruction of modern society.

Since the mid-1990s, a backlash against globalization has been well-documented in the media, on the internet and in books like Naomi Klein's No Logo. McDonald's restaurants have been the targets of protests, peaceful and otherwise, by environmental, anti-globalization and animal rights activists. The company's litigious approach to protecting its business interests has not helped its image in the minds of its opponents.

This conflict, and the company's approach to resolving it, was epitomized in the early 1990s by what came to be known as the McLibel case. Two British activists, David Morris and Helen Steel, distributed leaflets entitled What's wrong with McDonald's? on the streets of London. McDonald's wrote to Steel and Morris demanding they desist and apologise, and, when they refused, sued them for libel.

The trial, lasting more than two years, was described as 'the worst PR disaster in history' for the firm. The company's advertising techniques and business practices were scrutinized in the High Court of Justice in London and reported extensively in the press, who saw the case as a David and Goliath battle (under UK law, legal aid could not be granted for a defamation suit, so Steel and Morris did most of their own legal casework while McDonald's was represented by an extensive legal team).

In June 1997, the judge ruled in favor of McDonald's, awarding the company £60,000 damages, which was later was reduced to £40,000 by the Court of Appeal. The amount was low because the judge ruled that some of the claims made by Morris and Steel had been proved, including that McDonald's exploited children in its advertising, was anti-trade union and indirectly exploited and caused suffering to animals. Steel and Morris announced they had no intention of ever paying, and the company later confirmed it would not be pursuing the money.

Steel and Morris later successfully challenged UK libel law in the European Court, arguing that it was an infringement of the right to free speech. The Government was forced to re-write the legislation as a result. In 2005, a film by Ken Loach was made about the court case.

In 2001, Eric Schlosser's book Fast Food Nation included criticism of McDonald's' business practices. Among the critiques are allegations that McDonald's (along with other companies within the fast-food industry) uses its political influence to increase their own profits at the expense of people's health and the social conditions of its workers. The book also brings into question McDonald's advertisement techniques where it targets children. While the book does mention other fast-food chains, it focuses primarily on McDonald's.

In June 2004, the UK's Private Eye reported that McDonald's was handing out meal vouchers, balloons, and toys to children in paediatric wards. This was especially controversial as the report was made within weeks of a British Government report stating that the present generation may be the first to die before their parents due to spiraling obesity in the British population.

In 2002, vegetarian groups, largely Hindu, successfully sued and won against McDonald's for misrepresenting their French fries as vegetarian.^[4] Even after the discontinuation of frying the French fries in beef tallow in 1990, the French fries still had beef extract added to them. The French fries sold in the U.S. still contain beef and animal flavoring. McDonald's biscuits also contain beef flavoring along with animal flavoring.

Also in 2004, Morgan Spurlock's documentary film Super Size Me produced negative publicity for McDonald's, with allegations that McDonald's food was contributing heavily to the epidemic of obesity in American society, and failing to provide nutritional information about its food for its customers. For 30 days Spurlock ate nothing but McDonald's (supersizing whenever asked). He ate everything on the menu at least once and continued to eat after he was full. At the same time he consciously attempted to get little or no exercise. By the end of the month he reported mood swings and sexual dysfunction and had gained 24.5 pounds (11.11 kg). Others have disputed Spurlock's claims. (see below)

After the film was shown at the Sundance Film Festival, but before its cinematic release, McDonald's stated it was phasing out its Supersize meal option and would begin offering several healthier menu items, though no link to the film was cited in this decision. However, while the healthier menu items have appeared, the Supersize meal option still remains available at some locations. The company also began a practice of putting nutritional information for all menu items in light grey small print on the reverse of their tray liners. It is currently phasing in nutritional labeling in clear black print on the actual packaging of its food items.

Anthony Bourdain on his show, No Reservations, has criticised McDonald's among other fast-food restaurants for its culinary blandness.

Legal challenge over trans fats

In September 2002, McDonald’s announced it was voluntarily reducing the trans fat content of its cooking oil by February 2003. The oil was not changed. In the ensuing lawsuits, plaintiffs claimed that McDonald’s failed to inform the public that the oil was not changed. Since that time, it has been discovered that the trans fat content of some of their products are higher than they claimed (one McDonald's large fries contains 8 grams of trans fat).

Settlement of the lawsuit brought by BanTransFats.com and one private party requires McDonald’s to inform the public that the oil was not changed. McDonald’s will also donate $7 million to the American Heart Association for public education about the risks of consuming trans fat. [5]

McDonald’s is also required to spend up to $1.5 million on publishing notices to ensure that the public knows the status of its trans fat initiative. If the cost of publishing the notices is less than $1.5 million, the difference will be donated to the American Heart Association. The California Superior Court for Marin County has entered an order preliminarily approving the settlement.

In September 2006 McDonald's and all its products were classified healthy by the SAESUF foundation of health obesity. This was criticised heavily by American health nutritionists and argued that their data lacked validity.

Arguments in defense of McDonald's

In response to the backlash against McDonald's, the firm has sought to include some healthy choices in its menu and has introduced a new slogan to its recruitment posters: "Not bad for a McJob". (The word McJob, first attested in the mid-1980s^[5] and later popularized by Canadian novelist Douglas Coupland in his book Generation X, has become a buzz word for low paid, unskilled work with few prospects or benefits and little security). McDonald's disputes the idea that its restaurant jobs have no prospects, noting that its CEO, Jim Skinner, started working at the company as a regular restaurant employee, and that 20 of its top 50 managers began work as regular crew members. ^[6]

In other cases, the firm has shown itself ready to adjust its business practices. When environmentally damaging packaging and waste produced by the company's restaurants became a public concern, McDonald's started a joint project with Friends of the Earth to eliminate the use of polystyrene containers, only in the United States, and to reduce the amount of waste produced.

Throughout the McLibel trial, senior representatives of the firm said they were merely trying to protect its image from undue and unfounded attack. With regard to its numerous and often controversial copyright and trademark actions, McDonald's lawyers say they are simply protecting the company's intellectual property. This argument loses some credibility in light of the Viz Top Tips case, in which McDonald's copied text from the UK adult comic's popular feature almost verbatim (see the McDonald's advertising campaigns and slogans section). The case was settled out of court after McDonald's donated an undisclosed sum to the charity Comic Relief.

Following the release of the film Super Size Me, some people reported they had experienced no weight gain and suffered no ill effect by eating only at McDonald's for a month, but choosing menu items more judiciously and exercising frequently [6]. Merab Morgan, a North Carolina woman, was even able to lose weight [7]. She claimed that the transparency of nutritional information made it easy to control her daily caloric intake.

Legal cases

Main article: McDonald's legal cases

McDonald's has been involved in a number of lawsuits and other legal cases, most of which involved trademark disputes. The company has threatened many food businesses with legal action unless they drop the Mc or Mac from their trading name. In one noteworthy case, McDonald's sued a Scottish café owner called McDonald, even though the business in question dated back over a century (Sheriff Court (Glasgow and Strathkelvin), 21 November 1952)

It has also filed numerous defamation suits. The McLibel case is probably the best known of these.

McDonald's has had to defend itself in several cases involving workers' rights. In 2001 the company was fined £12,400 by British magistrates for illegally employing and over-working child labor in one of its London restaurants. This is thought to be one of the largest fines imposed on a company for breaking laws relating to child working conditions (R v [2002] EWCA Crim 1094).

Possibly the most infamous legal case involving McDonald's was the 1994 decision in The McDonald's Coffee Case.

McDonald's advertising campaigns and slogans

Main article: McDonald's TV campaigns and slogans

McDonald's has for decades maintained an extensive advertising campaign. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage, sponsors sporting events from ranging from Little League to the Olympic Games, and makes coolers of orange drink with their logo available for local events of all kinds. Nonetheless, television has always played a central role in the company's advertising strategy.

To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions. At times, it has run into trouble with its campaigns.

In 1996, the British adult comic magazine Viz accused McDonald's of plagiarizing the name and format of its longstanding Top Tips feature, in which readers offer sarcastic tips. McDonald's had created an advertising campaign of the same name, which suggested the Top Tips (and then the alternative — save money by going to McDonald's). Some of the similarities were almost word-for-word:

"Save a fortune on laundry bills. Give your dirty shirts to Oxfam. They will wash and iron them, and then you can buy them back for 50p." — Viz Top Tip, published May 1989.

"Save a fortune on laundry bills. Give your dirty shirts to a second-hand shop. They will wash and iron them, and then you can buy them back for 50p." — McDonald's advert, 1996.

The case was settled out of court for an undisclosed sum, which was donated to the charity Comic Relief. However, many Viz readers believed that the comic had given permission for their use, leading to Top Tips submissions such as: "Geordie magazine editors. Continue paying your mortgage and buying expensive train sets ... by simply licensing the Top Tips concept to a multinational burger corporation."

In 2003, a ruling by the UK Advertising Standards Authority determined that the corporation had acted in breach of the codes of practice in describing how its French fries were prepared[8]. A McDonald's print ad stated that "after selecting certain potatoes" "we peel them, slice them, fry them and that's it." It showed a picture of a potato in a McDonald's fries box. In fact the product was sliced, pre-fried, sometimes had dextrose added, was then frozen, shipped, and re-fried and then had salt added.

Parodies in popular media

• The 1973 Woody Allen comedy film Sleeper shows a McDonald's supposedly 100 years in the future, with the once-iconic "Over (N) Billion Served" sign displaying "Over 795 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 000 Served" (a total of 51 zeros, just over half the zeros of a googol). In reality, once the volume of sold burgers reached the multi-billion level, the stores' signs were changed to the generic "Billions and Billions Served".

• In the live-action Flintstones movie, there is a restaurant called "RocDonald's".

• In episode 54 of the anime series Sonic X, Chris Thorndyke works in a restaurant called "Wacdonalds" with an upside down Golden Arches logo as a "W". This also appears in the anime series Inuyasha, the restaurant where Kagome eats, and in several episodes of the anime series SuperGALS.

• Burger World, where the title characters of the cartoon Beavis and Butt-head work, receives similar treatment.

• In the 1988 film Coming to America, Akeem Joffer (Eddie Murphy) finds a job at the local "McDowell's" restaurant.

• The comic strip Funky Winkerbean occasionally includes references to a "McArnold's".

• Dave Chapelle uses a sketch in The Chappelle Show to show how a fictional McDonald's ("WacArnolds" on the show) breaks families apart, shortens people's lives, and pays the bare minimum.

Gallery

Moab, Utah, USA	Singapore.	Amsterdam, Netherlands	Retro-style McDonald's in Bloomington, Minnesota
Bolton, England	Dortmund, Germany	Kristiansand, Norway	Osaka, Japan
Seoul, South Korea	McDonald's in Tampa, Florida, with the old N-Billions Served sign	St. Petersburg, Russia	Santa Fe, New Mexico, USA
Sedona, Arizona, USA	Delhi, India.	Tianjin, P.R.C.	Bolzano, Italy
Goodna, Queensland, Australia

References

1. ^ Hoover Fact Sheet
2. ^ Consumer Reports
3. ^ McDonald's deal with oil company marries China's new love of fast food, cars
4. ^ Letter from McDonald's headquarters claiming fries are vegetarian
5. ^ "Merriam-Webster: 'McJob' is here to stay". The Associated Press. November 11, 2003.
6. ^ [1]

See also

• History of McDonald's
• List of McDonald's-related articles

Competitors

• Burger King
• Wendy's

Criticism

• Fast Food Nation, book by Eric Schlosser
• Maxime, McDuff & McDo, documentary film about the unionizing of a McDonald's in Montreal, Canada.
• McDonaldization, term used by sociologist George Ritzer to describe the process by which a society takes on the characteristics of a fast-food restaurant.
• McLibel case, a long-running UK libel case brought by McDonald's against two activists
• Super Size Me, film by Morgan Spurlock.

Miscellaneous

• Don Gorske, a McDonald's enthusiast, has consumed over 20,000 Big Mac hamburgers. He appeared on Super Size Me, is listed in the Guiness Book of World Records, and has a movie called MacDaddy.