Is it possible to innovate within the standardized parameters of a franchise? Arcos Dorados, the biggest McDonald's restaurant operator in Latin America and the world's biggest franchisee of the brand, offers plenty of examples of just this.
Among its innovations, it opened a kosher restaurant in Buenos Aires, installed dessert centers in most of its Latin American locations, adapted McCoffee to local tastes (using real crockery, rather than paper) and offered young people with Downs syndrome a chance to work in the restaurants. Now it's set on becoming a more eco-friendly company.
"The McDonald's system has three fundamental rules on which everything it does is built: offer good food, hire good people and be good neighbors," says Woods Staton, chairman and CEO of Arcos Dorados, from his office near Buenos Aires. Within these rules, you can innovate and still maintain the franchise parameters.
"We can serve kosher food or dulce de leche desserts here, arepas in Venezuela, chicken with hogao in Colombia, Mexican meals in Mexico. But we have to keep the main menu, the Big Mac, the Quarter-Pounder. So long as we are faithful to this, we can also have some local content," he says.
On the topic of being a good neighbor, he says, "If a neighborhood wants kosher food ... I can offer it without abandoning the essence of McDonald's." To this end, Arcos Dorados executives went to Israel, saw how the restaurants were operated there, spoke with a rabbi in Argentina, and soon afterward opened the doors of Latin America's first kosher McDonald's restaurant in the Abasto district of Buenos Aires. It was a complete success.
Something similar happened when the company incorporated young people with Downs syndrome into the powerful machinery that is Arcos Dorados' 90,000-strong regional workforce. At first there was reluctance, Staton admits, but the end result was positive for everyone--for the youths who now had a chance to work, and for their colleagues who had the chance to learn from them. And so this program that began in Argentina more than 20 years ago was repeated in Chile and Brazil. The next step will be to expand it into Mexico and Colombia.
With all these innovations that Staton has been introducing in the restaurants since he joined McDonald's in the 1980s--first as an employee and then as a partner--the business has flourished in Latin America, especially over the last two decades.
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