When McDonald's Entered into an Agreement with a French Entrepreneur

question 82

Multiple Choice

When McDonald's entered into an agreement with a French entrepreneur who wanted to own and operate a McDonald's fast-food restaurant in Paris, McDonald's saw the new restaurant as an opportunity. Unfortunately, the restaurant in Paris was not maintained at the cleanliness standards prescribed by McDonald's (but acceptable to the cleanliness standards of the French) . McDonald's brought legal action to have the restaurant closed. This example illustrates ____.

• A)an opportunity for McDonald's to enter into more joint ventures
• B)a need for McDonald's to curtail its international franchising
• C)a cultural threat against McDonald's
• D)a weakness within the McDonald's franchising system
• E)a problem with franchising in different cultures

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Definitions:

Capital Budgeting

The process a business undergoes to evaluate potential major investments or expenses.

New Business Ventures

Initiatives or projects that involve starting a new business or expanding into new markets or products.

Equipment Replacement

The process of substituting old, worn-out, or obsolete equipment with newer, more efficient models or versions.

Discount Rate

A rate used to convert future cash flows into their present value, fundamental in the assessment of investment attractiveness.