McDonald's franchise owner finds his work menu changes daily

Date AddedJuly 31, 2009 01:32:53 PM

Author

CategoryFast Food Franchises

By JEFF ECKHOFF

· jeckhoff@dmreg.com • July 16, 2009

James Baker is calm and reasonable, as one would expect a former accountant to be, as he sits in one of his own booths and tries to explain what a hamburger entrepreneur does.

First, there's the general number-crunching to make sure costs balance with revenue in the high-volume, low-margin fast-food business. Then, there's all the training and planning that needs to be done, including out-of-town trips to do things like evaluating the latest technology for making upscale coffee drinks.

"The beauty is that every day is different," said Baker, who splits his workweek among the four McDonald's restaurants he and his wife, Karen, own in Des Moines and Grimes. "It's not a set routine. Generally, the customer complaints that reach me have been bungled pretty good, and I have to unscramble the egg. ... It's definitely a full-time job."

It's one he does fairly well.

James and Karen Baker received a Ronald Award at a McDonald's convention in Las Vegas earlier this year. A corporate news release says the trophy goes to the top 1 percent of McDonald's owners nationwide who "show exceptional contributions and progression of the McDonald's brand."
Lifetime achievement

Baker likened it to a lifetime achievement award.

"I always felt like my job was to make sure the managers have the tools they need in place to do their jobs," he said. "It's amazing, if you don't pay attention, how people adapt to problems" and find work-arounds that are worse in the long term.

In addition to business demands at his restaurants - the Des Moines sites are in the Drake and Accent neighborhoods, as well as in Mercy Hospital - Baker also serves as vice president of a 12-owner, 57-store cooperative that makes local McDonald's advertising decisions.

He's been active in Ronald McDonald House Charities for more than 15 years and involved in Statehouse politics, to varying degrees, since legislators passed a controversial franchise law in the early 1990s. He also regularly coordinates smaller projects, such as scholarships for business-minded high school seniors.

Statehouse lobbying "was an education," Baker said. "When they say you don't want to watch how laws or sausages are made, they mean it."
Lengthy franchise process

Baker's 12-year career as a McDonald's accountant included jobs in San Francisco, Honolulu, Hawaii and Washington, D.C., before he purchased an Indiana franchise in 1986. Baker, a native Iowan, bought his Des Moines restaurants in 1991.

To obtain the restaurants, Baker had to pass a corporate interview process and spend two years working part time in restaurants to learn the business. McDonald's corporate Web site said new owners aren't even considered unless they have $300,000 in unborrowed cash to finance a new eatery.

"They are pretty particular when it comes to franchisees," said Art Bent, a Rhode Island franchise consultant. "It's a very high-class operation. ... They're interested in every one of their stores putting out a product that the public will hurry back to."

Baker estimated that the average McDonald's franchise, once established, posts about $2 million a year in revenues. From that, the owner must cover all labor and material costs, plus a 4 percent fee to the corporation, as well as corporate rent for the land and building.

Bent estimated that the average McDonald's nets "anywhere from $150,000 to $300,000, depending on how good they are at running it."

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