This story was first published in April 2023.
Some McDonald’s Kiwi franchisees own five or six outlets: happy times for Happy Meals for this crew.
They’re often husband-and-wife teams who didn’t start out wealthy but had a big serving of chutzpah.
Much of the store profits aren’t going into the Chicago giant’s pockets either. Instead, they are enriching Kiwi business owners who bought franchises, supporting communities via sport and charity.
“In New Zealand, 90 per cent of McDonald’s restaurants are franchised by local businessmen and women who own and operate their restaurants as independent businesses,” the company says on its Kiwi website under “who we are”.
It’s a huge employer - it sought 2000 extra staff last September and many a Kiwi teenager started work there.
“The organisation employs over 11,000 people in restaurants nationwide and is one of New Zealand’s largest employers of youth. In 2018, McDonald’s spent more than $175 million with local suppliers, while New Zealand producers exported $323m of food to other McDonald’s markets around the world,” it says.
Take for example couples like Dunedin’s Stonelakes. They have five Otago and Southland outlets and are so established that they have their own website. Check out www.stonelakecorp.kiwi if you want to see the power of McDonald’s branding combined with a hard-driven southern husband-and-wife franchise owner couple.
It takes guts, time, and a fair wad of cash to buy into the world’s biggest restaurant chain if you’re a Kiwi. Many of the stores are owned by the American parent.
To get a prized franchise these days, you’ll need at least $1.7m, perhaps money to buy the property, undergo a full-time unpaid year-long training programme and agree to a stringent set of rules, the corporation indicates.
Yet around 50 highly driven individuals or couples have done precisely that and often it’s second-generation owners these days.
They are the wealthy, busy owners of a select number of stores in areas with high populations, often operating 24-hour-a-day businesses spending millions every year on food, packaging, wages, electricity, cleaning, repairs and maintenance.
Their struggles? Insiders say that just like the rest of us: the fast-changing economy, inflation, rising wage bills, import holdups and labour shortages.
These entrepreneurial 50 or so are Kiwis working to the knock-out formula of the world’s biggest food retailing empire: 39,000 outlets, 119 countries.
Venkat Raman, editor and general manager of Glendowie-based Indian Newslink, has watched so many from his community succeed over the decades with McDonald’s. Raman runs the successful annual Indian Business Awards where thousands, including Prime Ministers, attend cavernous venues like last year at The Trusts Arena where five-deep queues formed for selfies with then-PM Jacinda Ardern.
McDonald’s owners are regular winners of those awards but why do they buy franchises in the first place? How did they choose this brand?
“People of Indian origin generally do well in the hospitality sector, especially the restaurant business,” Raman explains.
He cites McDonald’s Auckland franchisee Sam Maharaj as one store owner helping others from his community.
And sometimes, having a fast-food Kiwi franchisee is a family affair.
“Sam’s brother Daven Maharaj owns a number of Subway franchise outlets, including a few prime ones in locations like Newmarket. This is a high-volume, cash business and with good employees, owners or franchisees can earn good dollars,” Raman says of the McDonald’s franchise model and global fast-food franchisees in NZ.
International chains like McDonald’s, Subway, KFC and Pizza Hut develop strong ties with franchisees therefore they often sell one person or a couple many outlets, he notes. It’s all about trust, relationships.
Although numerous Auckland McDonald’s are owned by those of Indian ethnicity, the owners don’t necessarily eat a substantial amount of that particular brand of food, Raman reveals.
“Indians prefer to dine at restaurants because they do not like junk or fast food. This is why almost all Indian restaurants do well and increasingly cater to non-Indian ethnic groups including Europeans,” he says.
The McDonald’s franchise offer in New Zealand holds out new opportunities. The chain has opened two new stores lately, both in Waikato: Taupiri (reviewers said it opened “at the top of its game” and Ruakura (”average” reviews so far, 3.5 out of 6) and will soon open at Birkenhead and Silverdale this year.
If you want to buy in, it’s mostly not the big smoke. Maccas doesn’t want too many big-city franchisees waltzing up its Greenlane HQ these days. Three years ago, Auckland’s Queen St outlet closed but shifted two doors up.
It’s more of a rural vibe lately, although new Henderson and New Plymouth Bell Block outlets opened in the last two years.
“There will be no foreseeable opportunities for the purchase of new or existing restaurants in the four main centres of Auckland, Wellington, Christchurch or Dunedin. New or existing restaurants will most likely only become available in the smaller provincial towns,” it says.
Seems we’ve nearing peak McDonald’s saturation in our main centres.
Now it’s a slower spread, into more fast-growing regions. Car is now the arches’ king. New restaurants have been springing up around motorways like the new Waikato Expressway in recent times: Mickey D’s new stores are being built for those on the go. Do they dine in or take away? Both.
“Restaurant numbers go up and down with opening and closings,” said NZ communications head Simon Kenny. “For example, we’ve closed a few foodcourts in the last year, while we’ve opened some new restaurants like Ruakura.”
If you want to be a Mickey D’s owner/operator, dig in for around two decades.
“The term of a standard franchise is generally 20 years, however, this may vary where sites are leased, and the length of the franchise term will be relative to the real estate tenure,” the NZ site says.
The standard franchise fee is $75,000 plus GST.
Restaurant prices vary depending on whether they’re new or existing.
Buyers considering franchises must be financially sound “with a minimum of $1,700,000 of unencumbered funds available at the time of application. Regular credit checks will be carried out and also a personal statement of financial position will be requested periodically. This must be signed off by your accountant or lawyer,” McDonald’s demands of Kiwis considering buying in.
Macca’s hardly hits the headlines in business news in this country. As they might say over in corporate HQ at Chicago, Illinois - “keep it on the down-low”.
Yet these franchisees’ crew members are frying spuds grown here, flipping our own beef in patties and all the chicken served to us comes from here as well.
Relatively-newly-appointed NZ/Pacific Islands managing director Kylie Freeland isn’t a high-profile name like Fletcher’s Ross Taylor or Fonterra’s Miles Hurrell. She only took over last June. Her LinkedIn profile says she has worked at McDonald’s here and in Australia for 27 years and seven months and she’s Australian.
She’s running a huge franchise business. Like their registered trademark logo says, we sure are “lovin it”: McDonald’s Restaurants (New Zealand) pulls around a million of us through its doors, drive-thru and McDelivery every week, it says.
Corporate annual accounts give us some glimpse into the business: the latest corporate McDonald Restaurants (NZ) revenue rose from $224m in 2020 to $251m in 2021 but that is only for the over-arching business - not the dozens of franchisees who operate under the strict rules and guidelines.
The US chain opened here in Porirua in 1976 and its popularity seems to be on the rise.
Today there are 170 outlets.
The business has a theoretical foot traffic customer count which would set others alight with envy: around 52m visits a year by hungry hordes.
Yet it is surprisingly coy when it comes to updating us about what it’s doing in this country. Not a single news release was posted on its Kiwi website last year, although information was sent directly to the media.
So how much money is the business making? Because it’s foreign-owned, it must file its full annual report with the Companies Office publically. The 2022 accounts won’t be out for a few weeks. So the latest are for the year to December 31, 2021 when McDonald’s Restaurants (New Zealand) declared a net profit of $73m, up from $55m in the 2020 year.
Just for perspective, McDonald’s Corp trades in the US at US$275/share and has a market cap of US$201b.
The company says in NZ it still wants new franchisees, albeit at a slower pace than some years ago: “We welcome contributions and an open exchange of ideas between the company and our franchisees. The Big Mac, Filet-O-Fish and Bacon & Egg McMuffin have all been developed from ideas generated by franchisees around the world. Indeed, the idea for the Kiwi burger came from one of our franchisees in the Hamilton region,” the company says.
Here are just a few of those 50 Kiwi franchisees and a little of their story. This isn’t a comprehensive list but gives an idea of how some achieved ownership and a stake in the world’s biggest fast-food empire.
McDonald’s Penrose, Royal Oak, Mt Wellington, Stoddard Rd, Lunn Ave, Sylvia Park
Maharaj Corporation is run by Sam and Angela Maharaj who have six of Auckland’s most successful, busiest outlets.
The corporation has won at the annual Indian Business Awards as well as 2011 franchise awards for McDonald’s and has its own website at mcraja.com and Facebook page Maharaj Corporation.
The couple are strong community supporters and name Friends of Fiji Health as one entity they back financially.
Maharaj Corporation was established in October 2003 and it’s one of the world’s top franchisees.
Ronald McDonald House NZ notes: “Maharaj Corporation has received the prestigious Golden Arch Award for the top 1 per cent performing franchisees globally as well as the Franchisee of the Year award. Sam supports a number of community groups and youth sports teams and is a former chairman of the McDonald’s franchisee group.” The awards were made in the last decade.
Sam Maharaj, an immigrant from Fiji, describes himself as a “crew member” and says there are numerous opportunities for the members of the Indian community to become high achievers.
Maharaj owns the rights to operate McDonald’s at Church St in Penrose, Stoddard Rd in Mt Roskill, the Royal Oak Shopping Centre, Lunn Ave in Mt Wellington, on the Mt Wellington Highway and at Sylvia Park Mall owned by Kiwi Property.
McDonald’s Rotorua on Fenton St, Fairy Springs, Te Ngae
Rob and Linley Parry own three franchises around the thermal tourist hotspot: in the centre of town on Fenton St, at Fairy Springs and Te Ngae.
Fenton St is famous for its waharoa (gateway) and other carvings. The Parrys worked with Te Puia to get QR codes to explain to customers what each carving means.
Late last year, the central Rotorua outlet suffered trouble when a person kicked in windows so Rob Parry told Newstalk ZB he had decided to employ full-time security guards.
“We had to do something, we can’t put our staff in harm’s way so we have now contracted professionals on site,” he said last September.
The premises on the corner of Fenton St and Amohau St had a $2.6m renovation two years ago.
The couple were reported as employing 270 staff across their sites but Rob Parry has said he could employ another 30.
He has called Rotorua the “best city in the world”.
He was born in Melbourne and came to Palmerston North when he was about 5, staying there for many years. He became a New Zealand citizen around 2016. Before New Zealand, he had lived in Boston in the US and Oxford in England, because his father was a scientist.
McDonald’s Westfield Albany food court, Albany, Constellation Dr, Wairau Rd, Akoranga Dr
Brent and Janie Wilson bought their first franchise in 2015 when McDonald’s Whakatāne became available and they jumped at it, they said in a Stuff McDonald’s advertorial on March 8 this year.
“Today they own five McDonald’s restaurants with a sixth under construction in Birkenhead, have four children between them, a gorgeous wee dog named Diesel and are proud grandparents to two grandchildren,” the article said.
They packed up from Hamilton and shifted to the Eastern Bay of Plenty to run that Whakatāne operation then moved north again.
“After a few years expanding the Whakatāne store they were then offered the chance to come to Auckland and take over a patch of stores on the North Shore. They haven’t looked back since,” the profile said.
Now, they have five restaurants, all in the fast-growing Shore and in busy parts like main thoroughfares, giving them a number of trump cards.
McDonald’s Whanganui on Victoria Ave and Liffiton St as well as Hāwera
Darren Rowland and wife Jay own McDonald’s on Whanganui’s Victoria Ave and Liffiton St as well as the Hāwera store.
He started part-time work at the New Plymouth McDonald’s aged 16 and met Jacinta at the Feilding McDonald’s in 1996.
He had an after-school job in McDonald’s and as a crew member he rotated through the restaurant’s 20 stations. His favourite was a key one: overseeing the production station.
The job was busy, the staff were his age and it was a fun environment.
He thought of becoming a doctor, the Herald reported in 2019, and did a year of study at Otago University. But during the holidays he worked as a manager in his brother Tony’s Masterton McDonald’s, and the lure of owning a restaurant trumped the doctor dream.
During 1995 he worked in Masterton, then in the Feilding McDonald’s in 1996, where Jacinta was one of the crew. She went to Massey University to get a business studies degree, while he managed Feilding and new Bulls McDonald’s for franchisees Joel and Janet Smith.
In 2007 they moved to Whanganui and bought the McDonald’s in the Trafalgar Square food court from Jim Pring, and the Victoria Ave McDonald’s from John Warder.
A new McDonald’s was planned for Hāwera and they got that franchise too. It opened in 2008.
In 2009 they got the franchise for a new McDonald’s in Liffiton St, handy to SH3 traffic and people from Gonville and Castlecliff. In 2012 they closed the McDonald’s at Trafalgar Square.
McDonald’s Dunedin at Andersons Bay, George St and Great King St, Invercargill’s Dee St and Elles Rd
The Stonelake Corp owned by Justin and Eterei Stonelake owns five outlets. They are:
1. Dunedin Central, on the main thoroughfare George St near the Octagon;
2. Dunedin North on Great King St heading out of town;
3. Dunedin South at Andersons Bay;
4. Invercargill’s Dee St;
5. Elles Rd, Invercargill.
Justin Stonelake decided after working part-time in a McDonald’s for his father that it was “totally me’”
He worked his way up from being a crew member to five years working at head office before being invited to become a franchisee in 2007, operating three restaurants in Northland with his wife Eterei.
They were approached in 2012 to head south.
The couple has a young family and were impressed with the south, particularly its friendly people, they say, adding that they have raised more than $1m for charity.
They did have six restaurants but sold the Gore outlet to another franchisee so are now down to five.
They employ more than 200 people and have won numerous awards.
How many people had paid deposits was not stated but pre-sales said to be 'strong'.