Analysis of the Pizza Industry

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The Fast Food Restaurant Industry - Analysis of the Pizza Industry

THE RESTAURANT INDUSTRY AND HISTORY

Where and when did the fast food concept come into play? Consider the hamburger. While German immigrants brought the first "Hamburg Style Steak" to the United States in the early 19th century, the humble hamburger, "White Castle," became the basis for a new kind of restaurant in 1916 called "the fast food chain". J. Walter Anderson, who sold five-cent hamburgers with french-fries and colas, opened the oldest burger chain. Other restaurants followed and in 1948 brothers Richard and Maurice "Mac" McDonalds figured out a fresh approach that would produce fast food even faster. They eliminated waitresses and indoor tables from their hamburger stand, cut down on menus, streamlined food operations and lowered prices. Richard built the stand's giant golden arches, which emerged through the roof. In 1954 Ray Kroc, a milk shake machine salesman, paid the brothers a visit and was overwhelmed by the volume of business the McDonald's were serving up with bags of burgers and fries with factorylike efficiency. Kroc envisioned a string of establishments across the country. He made a deal with the McDonalds under which Kroc got the right to use their name and methods in franchising the concept. The brothers would get a bit more than a quarter of the 1.9% of the franchisees' gross to be collected by Kroc. The McDonald's concept spread like a brush fire and the rest is McHistory. Ray Kroc, who built the McDonald's Corporation, and his belief that there was equal beauty in the expanding restaurant business, definitely envisioned the future of the fast food industry most accurately.

INDUSTRY CHARACTERISTICS

The restauran...

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...ine-month period ending September 26, 1999, as compared to same period ending September 27, 1998, has been highlighted in Table 5 for Balance Sheet accounts and Chart 6 highlights Revenues, Selected Expenses and Net Income on the following page.

Expressed in Thousands of $$ - TABLE 5

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9 MONTHS 9 MONTHS % OF

ENDED ENDED INCREASE/

9/26/99 9/27/98 (DECREASE)

BALANCE SHEET

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Current Assets $ 79,474 $ 68,023 16.8%

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