Why do chains such as McDonalds charge different amounts for their products, for different regions?

Question

I've noticed McDonalds is cheaper in the country here in Australia. I've also read that Starbucks charges different amounts for their drinks depending on region in the US. Why?

Answer 1

Its all in how the franchiser figures their food and labor costs. Its a formula they teach their school for managers/franchisers. Obviously that is going to vary from geographical area to another.

Prices can also differ from company owned stores to franchised stores. That is a simple matter of economy of scale.

Answer 2

I live in Central Florida and our McDonalds have different prices around the corner from each other. McDonalds are franchise operations, and each owner can use the pricing guidelines he/she wants (within McDonald's allowances, of course). The stores closer to the attractions are much more expensive than the ones farther away. Same thing happens with gas and other goods! Traveling by car on an Interstate? Always choose a gas station farther away from the ramp on/off the highway....it will almost always be cheaper!

Answer 3

I work in a small town and they have a McDonalds and not much more. Therefore, that McDonalds does not offer any sales, coupons or even advertise. They have the whole monopoly. Also each McDonalds have a different franchise owner, who helps decides some of these issues. Starbucks coffee? Expensive especially in large cities.

Answer 4

Franchises!!!
Cost of living versus labor markets and their overhead.
Foreign exchange value of the dollar. Oh and have you had the meat in Austraila? They charge more because New Zealand uses mystery meat. No really-american companies with operating sites in other countried typically charge a bit more-however you have to take into account-foreign labor, food, processing, hidden taxes, utility and operational expenses and costs.

Answer 5

Even though they are franchises, the head office only gives them a recommended price list. Each store owner/manager can set his own prices, and generally only use the list as guide. You will find the areas that have less competition (from Burger King, KFC etc) will have the highest prices.

Answer 6

Almost all retail stores do. It's called demographics. Areas where they think they can get more money for their products such as a wealthier area or an area with no competition, they will always charge more.

Answer 7

Many variables include (but not limited to) cost of labor, cost of utilities, (water and electricity), transportation costs for the products they sell, real estate costs, franchisees have the right to charge higher prices, state local and federal taxes, advertising costs, interest rates on business loans....I could go on and on, but you get the picture by now.

Answer 8

Its very simple really. A store front in chicago il costs more to rent than does one in biloxi ms. The rates of pay are higher as well.

Answer 9

because franchises are owned by individual owners, and if they can get someone to pay extra they will. gready gready. I know two mcdonalds that are less than 5 miles apart. they haved different prices. they are owned by different people. And also in otger countries it is a novelty. it is not on every corner

Answer 10

I heavily idea i grew to develop into into the purely one which talked about that huge difference. yet I believe you, McDonald's coke tastes better ideal. surely, i come throughout the time of optimal fountain soda tastes better ideal than it does in cans/bottles. established huge difference of fountain and person-friendly, i imagine?