White Paper - Key Success Factors - Fast-Food Industry

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Key Success Factors – Fast-Food Industry
I.Introduction
As you may know, fast food is any food that can be prepared and served within a short amount of time. The history of fast food can be taken back to Ancient Rome – where bread and wine were sold in street-side stalls. The global fast food industry has had a tremendous growth over the last few decades. In 1970, we spent $6 billion on fast food – increasing to $110 billion by 2000. A.McDonald’s Corporation

The first company I chose to discuss is McDonald’s. Everyone knows what McDonald’s sells. They are in just about every town in the US. If they are not in your town, they’re in the town next to you or very close to you. The very first “McDonalds” opened in 1940, but it was not what the restaurant is today. The first restaurant opened in San Bernardino, California. It was a Bar-B-Q restaurant opened by Dick and Mac McDonald. Then in 1948, they shut down the restaurant for three months for alterations. When they reopened in December, they reduced their menu to only nine items: hamburger, cheeseburger, soft drinks, milk, coffee, potato chips and a slice of pie. The hamburger was only 15 cents. In 1949, French fries replaced the potato chips on their menu. Also, the triple thick milkshakes makes a debut. Then in 1954, the brothers get a visit from Ray Kroc, a mixer salesman determined to sell them more mixers. However, Ray had an epiphany and is determined that his future would be in hamburgers. On April 15, 1955, Ray opened his first McDonald’s in Des Plaines, Illinois. The building was red and white tile with the now famous Golden Arches. The first day sales were $366.12 and 10 years later there were over 700 restaurants throughout the US. (McDonalds.com, 2012)

In 2010, McDonalds reported that their yearly high and low of their stocks were $80.94 and $61.06, with a dividend of $2.26. The number of shareholders was estimated to be 1,348,000 as of January 31, 2011. (McDonald's Corporation, 2010) Their sales profit for the past 5 years went from 18.15% in September 2007, to 20.34% in September 2012. (YCharts, 2012) B.Taco Bell – Yum Brand

The second fast-food restaurant I will discuss is Taco Bell. It is funny how the store we know today came about. Glen Bell first started his business as a burger stand. He sold his sisters refrigerator to start “Bell’s Burgers.” He got this idea when he was sitting in the parking lot of a new “drive-in” restaurant – “McDonalds”. The McDonald brothers and Glen paved the way for burger joints around the country. However, in the 50’s Glen knew it was time for his next adventure – tacos. At this time, tacos were only sold in sit-down restaurants and not considered as fast-food. He knew to make tacos easy to eat so he had to create a “fast food crunchy taco shell and filled it with the perfect mix of Mexican ingredients for the American palate.” (Taco Bell Corp., 2012) His new taco was outselling his burgers, so he decided to make a “Mexican only” food stand. In 1954, he opened the doors to his first “Taco Tia” restaurant. His tacos cost only 19 cents, but he grossed $18,000 the first month!

He finally decided to combine everything he learned about fast food and restaurants to start a restaurant that served Mexican specialties. A friend suggested that he combine his passion and name to call the restaurant “Taco Bell”. He decided on a location in Downey, CA for his first Taco Bell location; which was a success.

Then in 1964, he opend the first of what would become the standard for all Taco Bell restaurants: “an inviting central stone fire-pit housed by adobe-like tan brick exterior walls, a red clay-like tile roof and a brown back drop, in front of a simple, Mission-style bell.” (Taco Bell Corp., 2012) He later achieved his goal of coast-to-coast expansion with the opening of a Taco Bell in Florida.

Mr. Bell passed away in 2010, but is legacy lives on. There are 5,600 restaurants, 350...
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