Many fast-food restaurant chains, such as McDonald’s, will occasionally discontinue restaurants in their system. What are some of the financial and non-financial considerations in deciding to eliminate a store?

What will be an ideal response?


Financial Considerations

1. Negative cash flows
2. Marginal Revenue below variable cost
3. Low Demand

Non-financial Considerations

1. Goverment ploicies and laws of the land
2. Trade barriers
3. Non availability of the staff
4. Language or cultural differences