Great Burger
Practice this intermediate merger & acquisition case interview question from McKinsey in the Consumer Goods sector. Includes detailed problem prompt, clarifying questions, structured framework, and expert recommendation. Part of ProHub's 835+ consulting case library.
ProHub Comment
This is a comprehensive M&A case requiring candidates to evaluate acquisition value through stand-alone assessment, synergy identification, and financial modeling. The case progresses logically from framework development through quantitative analysis, with emphasis on cannibalization effects and integration challenges in franchise models.
Estimated Time
27 minutes
Difficulty
Medium
Source
NYU
50
/ 100
Let’s assume our client is Great Burger (GB) a fast food chain that competes head–to–head with McDonald’s, Wendy’s, Burger King, KFC, etc. GB is the fourth largest fast food chain worldwide, measured by the number of stores in operation. As most of its competitors do, GB offers food and “combos” for the three largest meal occasions: breakfast, lunch and dinner. Even though GB owns some of its stores, it operates under the franchising business model with 85% of its stores owned by franchisees (individuals own & manage stores and pay a franchise fee to GB, but major business decisions e.g. menu, look of store, are controlled by GB). As part of its growth strategy GB has analyzed some potential acquisition targets including Heavenly Donuts (HD), a growing doughnut producer with both a US and international store presence. HD operates under the franchising business model too, though a little bit differently than GB. While GB franchises restaurants, HD franchises areas or regions in which the franchisee is required to open a certain number of stores. GB’s CEO has hired McKinsey to advise him on whether they should acquire HD or not.
Clarifying Information
N/A