Why the biggest fast-food franchise, McDonald's, failed in Iceland.
McDonald's has been keeping bellies full since the 1950s, and the franchise's net worth is estimated to be at up to $163 billion in 2020, with over 38,000 restaurants around the world.
However, there are still a small handful of countries that don't have a McDonald's at all, the oddest one being Iceland which is a modern, "first world" country. McDonald's tried for over 15 years to get their franchise up and running in Iceland but, in 2009, the fast-food giant gave up in the European country and closed their doors with no intention of ever investing in Iceland again.
In 1993, McDonald's opened up its first fast-food restaurant in Iceland, which was soon after the country evolved into a free-market economy, embracing globalisation and shifting away from being solely a nationalist society. Former Priminister, David Oddsson, received the honour of devouring the first Icelandic McDonald's burger, that event symbolised Iceland entering a new and bright future.
Initially, soon after its launch, Iceland's McDonald's were a huge success. Thousands of people queued outside to get their fast food fix and experience the new global franchise but, after a few months, the hype was over and McDonald's was seen as just another regular fast food restaurant.
However, in 2008, Iceland suffered a devastating impact from the global economic collapse. This resulted in huge price increases for basic goods, with thousands of businesses declaring bankruptcy and major banks closing their doors as people lost their life-savings.
The price of imports also suffered, which made it incredibly difficult and costly for businesses, like McDonald's, to afford stock and maintain their profit margins without increasing their prices too high.
These factors were a huge influencing factor for the fast-food franchise to decide to permanently close their doors.
Take a look at the video below by YouTube channel, CNBC, on Why McDonald's Failed In Iceland.