GENTRY — With many residents anxious to sink their teeth into a McDonald’s hamburger prepared right here in Gentry, construction continues at a fast pace on the McDonald’s Restaurant scheduled to open in less than two months.

The new restaurant, located on the corner of Arkansas Highways 12 and 59 in Gentry, is owned by Bill and Walter Mathews of Mathews Management Company in Springdale.

Bill Mathews has 32 McDonald’s franchises in the region. He and his brother Walter opened their first restaurant at 520 S. Thompson St. in Springdale in 1983.

Mathews worked his way up from a McDonald’s crew person to management while attending college.

He said he saw a case study in graduate school that reported franchises had an 80 percent chance of success whereas independent businesses had an 80 percent chance of failure.

Those numbers made up his mind, and he has gone full force ahead.

“I love this business,” he said. “In 1995 we still only had four restaurants, and then we grew pretty rapidly after that, purchasing other restaurants.”

The Mathews brothers opened their most recent McDonald’s on June 22 in Huntsville. The next one should open in August or early September in Gentry.

The College Avenue McDonald’s in Fayetteville is going to be demolished and rebuilt. Mathews flipped his first burger there in 1973. The business will be closed for about three months.

One of the advantages of a McDonald’s franchise is the company’s strong brand and consistent profit.

Mathews said in the first quarter of 2003 Mc-Donald’s lost money for the first time because of restructuring.

“That’s when we instituted the dollar menu,” he said.

Other advantages of franchising are support and training from the franchisor, purchasing power, advertising and innovation.

“But I still flip burgers once in a while. You don’t want to forget your roots,” Mathews said.

Having enough capital to operate two to three years is also important, both for franchises and independent businesses, he said.

“Most failed businesses do so because they are undercapitalized. A lot of people don’t understandthat,” Mathews said.

McDonald’s had 32,478 restaurants in 117 countries at the end of 2009 and 26,216 were operated by franchisees, according to Becca Hary, McDonald’s manager of corporate media relations.

She said 81 percent, or 11,336 of the 14,000 U.S. McDonald’s, are franchises.

According to the Mc-Donald’s Web site, the initial fee to start a newrestaurant is $45,000. Then there are equipment and pre-opening costs which range from $1 million to $1.8 million. The new owner must pay 40 percent cash of the total costs of a new restaurant and may finance the rest. The franchise term is 20 years and ongoing fees include a monthly service fee of 4 percent of the restaurant’s monthly sales and rent.

To purchase an existing restaurant, the buyermust pay a minimum of 25 percent cash as a down payment with the balance to be paid within seven years. The other fees are the same as for new restaurants, the Web site states.

McDonald’s Franchise Disclosure Document shows average sales volume of traditional restaurants in the United States open for at least one year was $2.37 million in 2009. The disclosure statementis a legal document franchisors must furnish to franchisees and is regulated by the Federal Trade Commission.

The highest sales volume for a U.S. McDonald’s in 2009 was $9.3 million, and the lowest performing restaurant was $387,000, according to the document.

Christie Swanson contributed much of the content of this article.

News, Pages 3 on 07/14/2010