Tuesday, 31 March 2009

McDonalds' franchise continues to thrive in troubled times

Figures from Bloomberg show that US fast food company McDonald’s Corp has experienced slowing sales growth in Latin America this year, which is set to continue as the recession curbs diners’ appetites for Big Macs and Happy Meals. Buenos Aires-based Arcos Dorados SA (the largest McDonald's franchisee in the world) owns and operates all McDonald’s 1,750 restaurants in 19 countries in Latin America, from Mexico to Argentina. Arcos' chief executive is optimistic that the franchise will still see 5% growth for 2009. Last year, sales in the region increased 26%, bringing in than $3.5 billion. Plans are still progressing towards the opening of around 150 new restaurants this year in Argentina, Brazil, Colombia and Venezuela.

Arcos reports that sales in Brazil and Mexico have been falling this year, but it is expected that the Mexican market will recover when that of the United States does.

All in all, franchises of internationally-established well known brands, together with their associated know-how, appear a good bet for maintaining business during a recession.   Where consumers have less spending power, they may be less willing to risk the uncertain rather than return to the security of that which is tried and tested.

No comments: