We learned in class this past Tuesday–from a practicing McDonald’s franchisee–how franchising can represent a special type of entrepreneurial venture. More on franchising from an entrepreneurial perspective can be found at the following link.
http://www.entrepreneur.com/encyclopedia/franchising
Today’s blog entry is written by Midwest Entrepreneurs student Johnathon Donald. In it, Johnathon captures very well the key points of franchising existing as an entrepreneurial option.
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Last Tuesday, we had Mike Luna, a successful McDonalds franchisee, speak to our class. Mr. Luna got his start in the business at a young age working at the McDonalds in Galesburg, IL. After working there for five years he went off to school, but eventually made his way back to McDonalds working as a supervisor. He was given the opportunity to buy into a franchise in Kewanee, IL and this is where his journey as a franchisee begins.
Before I go deeper into his story I would like to talk about the uniqueness of Mr. Luna’s business.
All of the other speakers we have had thus far have been entrepreneurs who have started their own business from scratch. Mr. Luna is different from others because he is a franchisee of a much larger corporation. This means that he has specific rules and regulations he has to follow as set by the McDonalds Corporation, and he has to work closely with them to make sure his location is up to standards.
With this though he has a lot of advertising that the corporation itself does, and he doesn’t have to put his own money into. He is also able to set his own prices as to stay competitive on the local level. Perhaps most importantly, although McDonalds controls from whom Luna buys meat and other raw materials, McDonalds gives him volume-purchasing power that means he is getting the highest possible quality materials at the best possible price; better than he could get on his own if he were running his own business. This savings and quality is then passed on to the McDonalds consumer.
In this endeavor, Mr. Luna was given the option to receive more stock in the franchise, which he gladly accepted. When the Kewanee location was bought out, he had enough money to start his own franchise right here in Monmouth in 1990. Through his dedication to customer service and willingness to do whatever work he must to make sure his franchise is operated correctly, he has been able to run a highly successful McDonalds. He has also been able to open another McDonalds in Aledo, IL.
Part of Mr. Luna’s success comes from the effort his employees put in to their jobs, and this can be attributed to Mr. Luna’s own work ethic. He stated that he was the type of person who would rather be out in the front of the store helping customers and making sure his building is in excellent shape than be a person working behind the scenes. Mr. Luna made the point that if you want your employees to work hard and do their best, you need to be willing to set the example that you wish for them to follow. He also strives to make his location a place where people want to come to work, and will continue to work. These aspects have enabled his franchised restaurants to be some of the most successful around.
Mr. Luna is a man who was willing to take the risk to bring a new type of business to a small community. The work that he put in to this business, and still continues to put in, has made his business successful for the last 24 years. His story is proof that by working hard and by believing in the decisions you make, you can run a successful business.
Johnathon Donald
