"The Ray Kroc Story." This account from the McDonald's web site - McDonald's routinely enters into contracts for franchise agreements. They should expect to encounter agency problems and Resourceful Enterprising Maximizing People. The goals of a franchisee may not align with the policies of McDonald's, and franchisees may not want to comply with prescribed operating practices. A well-run organization anticipates these possibilities and undertakes strategies and initiatives to prevent agency problems from occurring, and they also anticipate the possibility of non-compliance.
Provide three significant examples of management controls McDonald's corporate management should consider when establishing management controls designed to promote goal congruence and increase the likelihood that a franchisee will comply with important operating standards developed at corporate and Hamburger University.
What provisions should McDonald's management include in their franchise contracts in anticipation of situations when franchisees, who after acquiring a franchise, repeatedly fail to follow and implement important operating standards developed at corporate and Hamburger University.