Companies around the world are seeking to expand overseas, driven by many different reasons whether to lower labor costs, technological innovation or the almighty dollar. No matter what the reason, without the proper knowledge and financial funding the company will fail. There have been numerous companies that have experienced this first hand. If they would have noticed the warning signs they may have been able to salvage the company. Fast-food companies have been one of the fastest to globally expand. They also experience some of the hardest down falls. An often quoted example is the failure of Prague's first Pizza Hut which closed down because too many ingredients had to be imported in for the one existing restaurant. The added expense for importing ingredients made operating expenses too high. Fortunately, most fast-food chains are large enough to overcome closure to a couple stores. But what would happen if an entire country was rejecting the company. This is the problem that McDonald's is facing.McDonald's is one of most successful fast food chains with 29,000 stores in 119 countries and sales of 38.5 billion dollars. But now, with growth slowing worldwide, McDonald's will add just 1,400 new restaurants, the lowest numbers since 1994. International sales already represent 51% of the global sales. They arrived in Brazil in 1979; many of the franchisees had a strong business selling big macs. After many years of growth, from 175 restaurants in 1995 to 563 this year, Brazil is McDonald's eighth most important market worldwide(Smith 1). Their sales in Brazil went from 620 million Reais in 1995 to 1.3 billion last year. Until recently, the company was still planning to double its current number of restaurants here by 2003. Behind the lines of customers eager for a burger, the Brazilian franchisees are having a hard time financially. According to an estimate made by franchisees that are in judicial litigation against th...
