Running Head: MCDONALD’S INDUSTRY ANALYSIS 1
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Company Timeline
Early History
The McDonald’s saga began in the year 1940 when Dick and Mac McDonald opened a
barbecue restaurant typical of the era with a drive-in carhop service in San Bernardino,
California. Near the end of the decade, the team of brothers realized that most of their sales came
from hamburgers, so they simplify the menu, removed the carhop service, and ignited their fame
with the launch of the 15cent hamburger served hot-to-order.
By the early 1950’s the aesthetic was ready for a redesign. The classic golden arches, the
symbol of the current McDonald’s corporation, launched in 1953 with the first franchise
restaurant located in Phoenix, Arizona. After a few years, and another franchise in California,
Ray Kroc founded McDonald’s Systems, Inc. and expanded franchises throughout the United
States. In 1960 he renamed the company McDonald’s Corporation, and by 1961 he convinced
the McDonald brothers to sell him the business rights for $2.7 million (McDonald’s History,
n.d.).
The 1960’s bring an assortment of changes to the McDonald’s franchise, starting with the
introduction of indoor seating and the new Ronald McDonald mascot in 1963. This decade also
marks the expansion of the simplified menu, including current favorites such as the Big Mac,
Fillet-O-Fish, and the Hot Apple Pie. In 1965 the corporation goes public, and stocks soar.
Franchise expansion exploded with the 1000th restaurant opened in 1968, and by 1970
McDonald’s Corporation entered the international arena (Johnson, 2016). The trend continued
through the 1970’s and 1980’s with worldwide expansion, and another 1000+ restaurants seemed
to open every few years. Products such as the Chicken McNuggets, the Quarter Pounder, the Egg
McMuffin, and the Happy Meal are introduced with immediate success.
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Recent History
The 1990’s characterize a new beginning of controversy for the McDonald’s corporation
with lawsuits such as the infamous McDonald’s coffee case in 1992 and the McLibel case in
1997 (Johnson, 2016). One of the most famous (and most expensive) failed ad campaigns was
McDonald’s Arch Deluxe, both launched and discontinued in 1995. That same year, following
complaints of competition between franchises, McDonald’s Corporation begins conducting
market impact studies before granting further franchises (Johnson, 2016). This is the first
indication of market saturation since franchising began in 1953.
Fast Food Nation, a book critical of McDonald’s and fast food in general, was published
in 2000, marking a change in consumer health consciousness (Johnson, 2016). A few years later
the documentary “Supersize Me” debuted, followed by the immediate removal of supersize
options at McDonald’s restaurants. In 2002, McDonald’s Corporation posts its first quarterly loss
at $344 million, and responds by closing 175 underperforming stores (Johnson, 2016). As
McDonald’s Corporation struggles to maintain relevancy amongst health conscious consumers, it
begins to post product health information, promote items such as salads and fruit smoothies, and
include ethically sourced meat on the menu. They even introduced a slimmed-down version of
the Ronald McDonald mascot in 2005. By 2010, Subway surpassed McDonald’s as the largest
single-brand restaurant chain and largest restaurant operator globally (Johnson, 2016). Current
CEO Steve Easterbrook took the reigns in 2015 and immediately launched the all-day breakfast
menu campaign (McDonald’s History, n.d.).
Past Decade of Sales and Financial History
Total revenues for McDonald’s Corporation have increased steadily from almost $21,000
million in 2006 to over $28,000 million in 2013. In 2015 and 2016 there was a sharp decrease in
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total revenues, with 2016 numbers hovering just above 2010 levels at $24,622 million.
Unsurprisingly, McDonald’s sales also peaked in 2013 with a total of $89,126 million for both
franchise and corporate owned restaurants. This is substantially higher than the 2006 total of
$56,782 million. While sales are lower in 2016 (just over $85,000 million) it’s important to note
that most of that change is in sales generated from company-owned restaurants. In fact, sales
from franchised restaurants have even seen a slight uptick in the last year. This data is inline with
the company’s stance that it plans to “refranchise about 4,000 restaurants in the three-year period
ending 2017, with a long-term goal to become approximately 95% franchised” (, pp. 16).
It was difficult to track individual units sold, so instead I will highlight the number of
franchise and corporate restaurants, which paints a unique picture in terms of McDonald’s global
