Question

The advantage to a company such as chipotle of fully owning its stores, rather than franchising, is that it ensures a faster speed and spread of international growth.

a) true
b) false

Answer 1

The claim that owning stores outright ensures faster international growth for a company like Chipotle is false; franchising typically allows for faster expansion, but company ownership can offer more control over quality and brand consistency.

Step-by-step explanation:

The statement that full ownership of stores like Chipotle ensures a faster speed and spread of international growth compared to franchising is false. The franchising model, used by companies such as McDonald's, typically allows for rapid expansion and international growth because individual franchisees invest in the infrastructure and operations necessary to start up new locations. This model can streamline the process of entering new markets, as seen with the worldwide availability of McDonald's restaurants, a prominent example of globalization. In contrast, a company-owned expansion model requires the company to bear all the costs and risks associated with opening new stores, usually resulting in slower growth. However, this approach may ensure more consistent quality and adherence to company values, which for Chipotle means selling high-quality foods from responsibly sourced providers, a point of differentiation from franchised fast-food chains like McDonald's.