McDonald's+New+Store+Break-Even+Quantity+Assessment

You have identified a prospective opportunity to help a friend purchase a McDonald's franchise restaurant in a growing town that currently has a population of 50,000 affluent people. The only other restaurant in this town is a mom-and-pop coffee shop that they have run for years and has been slowing down because mom and pop are getting old. Because this town is within a 30-minute commuting distance from a much larger town (Fort Worth, Texas), you believe that this town could grow to a population of 200,000 over the next ten years. The town, however, is 10 miles away from the nearest Interstate highway. The initial costs to your friend to open the store are $1,000,000 for the franchise rights to the entire town and about $100,000 in equipment.

Note: According to McDonald's most recent annual report, they had 33,000 stores worldwide and roughly $22 billion in total operating expenses. media type="custom" key="10851080"

This file contains an example of calculating the break-even point for transactions based on this information and an assumed revenue-per-transaction number. It also contains examples of answers submitted that did not use the formula correctly 9with fixes) and a "Beanie Baby" example.