Arcos Dorados Holdings — BrandWiki

Arcos Dorados Holdings

Overview

Arcos Dorados Holdings Inc.

type	Public
traded as	nyse: ARCO
foundation	August 3, 2007
location city	Montevideo
location country	Uruguay
num locations	4.522 restaurants (2021)
area served	Latin America and the Caribbean
key people	Marcelo Rabach (CEO) Woods Staton (Executive Chairman)
industry	Food

Arcos Dorados Holdings (English: Golden Arches Holdings) is the master franchise of the fast food restaurant chain McDonald's in 20 countries and territories across Latin America and the Caribbean. As of October 2024, it operates nearly 2,400 restaurants, making it the largest independent McDonald's franchisee in the world and the largest quick-service restaurant (QSR) chain in Latin America and the Caribbean,[1] serving over 4.3 million customers daily.[2][3]

The company generates revenue through sales from company-operated restaurants and rental income from franchised restaurants. The rental income is structured as either a flat fee or a percentage of sales, depending on which is higher. As of June 30, 2024, Arcos Dorados employs more than 100,000 individuals across its operations.[3]

In terms of market presence, Arcos Dorados represented approximately 6.7% of McDonald's franchised restaurants globally as of its last reporting period. A new 20-year master franchise agreement with McDonald's is set to take effect on January 1, 2025.

Operations

With nearly $3.8 billion in sales in 2012, Arcos Dorados represents 5.6 percent of McDonald's global sales.[8] In Latin America and the Caribbean, it is the largest fast-food chain and is more than three times the size of its closest competitor.[11] Compared to the US, Latin America has fewer McDonald's per person. There's one McDonald's for every 22,200 citizens in the United States. In Mexico, Costa Rica, and Panama there's one restaurant for every 254,000 citizens; in Brazil, there's one for every 310,700 citizens; and in the rest of South America, there's one for every 317,400 citizens.[12]

Company-operated and franchised restaurants

Arcos Dorados operates its McDonald's-branded restaurants under two structures: company-operated restaurants and franchised restaurants. Arcos Dorados owns, manages and operates approximately 75 percent of its restaurants.[13] Restaurants operated and managed by franchisees account roughly for the remaining 25% of affiliated locations. They receive technical and operational support from Arcos Dorados, including training programs, operations manuals, access to its supply and distribution network, and marketing assistance.[8]

McCafé locations and Dessert Centers

Launched in 1999, the McCafé concept is meant to attract new customers, particularly during breakfast and after lunch,[14] in separate areas within restaurants where customers can buy lattes, cappuccinos, mochas, hot and iced premium coffees and hot chocolate. As of 2021, there were 298 McCafé locations in Latin America.[13][6] "Dessert Centers", operate separately from existing restaurants,[14] offering traditional McDonald's desserts like the McFlurry and soft-serve ice cream. As of 2021, there were 3,265 Dessert Centers in Latin America.[6] The first Dessert Center opened in Costa Rica in 1986.

Reimaging

Arcos Dorados has been updating its McDonald's restaurants throughout the region. Between 2010 and 2012, more than 260 restaurants were fully renovated with larger gathering areas, warmer colors, contemporary furniture, artwork, large windows and often have outdoor space with tables and umbrellas for outdoor dining.[8][15]

Employees

Arcos Dorados Holdings is one of the largest employers in Latin America, employing over 100,000 individuals across its operations. This workforce is predominantly composed of young people, with approximately 90% of employees being under the age of 24, reflecting the company's commitment to providing first job opportunities in the region.[23] The company has established a comprehensive training program that emphasizes personal and professional development. McDonald's University plays a pivotal role in this initiative, offering training to restaurant managers, mid-managers, and owners/operators on best practices in restaurant and people management, sales, marketing, and accounting. In addition to these managerial programs, there are various training curriculums available for employees seeking advancement within the company. Since its inception, more than 52,000 individuals from across Latin America have participated in McDonald's University courses and educational activities.[24][25]

In April 2012, Arcos Dorados became one of the first companies to join the New Employment Opportunities (NEO) Program, developed by the Inter-American Development Bank and the International Youth Foundation. This program aims to enhance youth employability in the region, particularly among poor and low-income young people. Corporate participation in this initiative involves an initial investment of $37 million in cash and in-kind resources to support job entry and training for disadvantaged youth.[26] Arcos Dorados has also launched additional educational initiatives such as MCampus Comunidade, which provides free access to educational resources for all members of society. This platform has attracted over 40,000 registrants, offering courses on various topics including personal finance, digital marketing, and emotional intelligence.[27] Overall, Arcos Dorados continues to play a crucial role in fostering employment opportunities and professional development for young people in Latin America while maintaining its status as a leading employer in the region.[28][29]

Sustainable food sourcing

Globally, McDonald's has worked with animal welfare expert Temple Grandin since the mid-1990s to help ensure animals in the supply chain are properly cared for.[32] McDonald's is currently in discussion with its pork suppliers to explore ways to phase out gestation stalls for pigs and is working with producers and suppliers to develop traceability systems to prove that the meat it buys is not from farms that use gestation stalls.[33] McDonald's became a member of the Global Roundtable for Sustainable Beef (GRSB) in 2012. The group is working to advance the sustainable production of beef through the commitment of stakeholders in the beef value chain.[34]

Supply chain

All of Arcos Dorado's food and paper suppliers comply with McDonald's Supplier Workplace Accountability policy, which stipulates that workers are compensated and treated fairly, work in safe conditions and produce high-quality foods and packaging.[35] Arcos Dorados also surveys and audits its suppliers in Latin America and the Caribbean to ensure their operations meet McDonald's quality, health and safety standards. based on globally recognized, established industry standards including the International Organization for Standardization (ISO), the British Retail Consortium (BRC), and the Hazard Analysis Critical Control Plan (HACCP).

Reducing consumption

McDonald's restaurants use a significant amount of energy, specifically in cold storage to protect food safety. During the past several years, Arcos Dorados implemented a restaurant maintenance strategy to reduce water consumption, energy utilization where possible, and waste reduction at its restaurants. As one example, the company developed a collection and storage system for the water generated through condensation from the air conditioning equipment. They used the collected water to clean external areas and to water plants, reducing daily water consumption at one restaurant in Brazil from 8,000 liters to 6,800 liters.[36]