Mcdonalds And The Fast Food Industry Essay - 838 Words

As the fast food sector becomes more competitive and the minimum wage employees fight for higher wages McDonalds needs to be as efficient as possible. Technology has come a long way and is beginning to be implemented in the fast food industry. Panera Bread has already begun using automated kiosks, online, and app ordering systems to reduce the food wait time. I think McDonalds should implement the same process to keep up with their competitors, reduce labor costs, and increase efficiency. To implement this technology into 1,800 Panera Bread locations it cost the franchise $40 million dollars. McDonalds has about 7.9 times as many locations in the United States compared to Panera Bread totaling about 14,157 McDonald locations. With this technology, McDonalds could conservatively expect a 3% increase in sales using a 10% dividend payout, and 36% tax rate. Also, McDonalds would not need to raise additional funds to implement this project as the additional funds needed in the pro forma m odel was projected as a negative 35.8 billion. To introduce this innovative technology in the United States McDonald locations it would cost approximately $331.8 million, which can be funded from a mixture of accounts payable and retained earnings. Over a course of 10 years, this improvement is expected to return accumulated cash flows with a net present value of $53.4 million. This was projected with a growth rate of 3%, discount rate of 8%, interest rate of 7%, and tax rate of 36%. ThisShow MoreRelatedMcdonalds And The Fast Food Industry1617 Words   |  7 PagesCompany Overview McDonalds has been the front-runner of the fast food industry ever since it was founded more than 50 years ago. This fast food mogul has provided millions of Americans and people around the globe with their services. 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