McDonald's goes to church - fast-food franchise within church complex - Brief Article

Black Enterprise, Sept, 2001 by Lloyd Gite

Houston house of worship reaps benefits of opening hamburger franchise

Parishioners at Brentwood Baptist Church in Houston are singing the Lord's praises right along with the world-famous McDonald's slogan, "We love to see you smile." The church is the first in the nation to have a McDonald's hamburger franchise on its grounds. The franchise is located inside the church's new $7 million Joe Ratliff Lifelong Learning Center, named after Brentwood's senior pastor. The 75,000-square-foot building houses a basketball court, an aerobics studio, a computer center, an arcade, a banquet hall, more than 60 classrooms, and the McDonald's, which has become a hit with the church's more than 10,000 active members.

Effie Worrell, a senior vice president and community development manager for Houston's Wells Fargo Bank, says the effort has the same impact on job creation as churches that create community development corporations (C.D.C.'s). "There is a big trend with pastors leading C.D.C.'s," says Worrell, who specializes in making loans to church C.D.C.'s. "The key for many communities is church-sponsored businesses. They are planting the seeds, and with the money they make, other projects are seeded."

The Rev. Joe Ratliff, Brentwood's 51-year-old-pastor, came up with the idea for the McDonald's at Brentwood. "I noticed that McDonald's was putting restaurants in gas stations, in schools, and in hospitals," he explains. "Why not have a franchise on the church grounds?"

Rafliff took his idea to Ernest Redmond, a deacon at the church and owner of four McDonald's restaurants in the Houston area. The two developed a business plan showing that the closest McDonald's was three to five miles from the church, and they outlined the traffic in the community as well as the traffic at the church. Every Sunday thousands of people flock to the church's three services, and during the week anywhere from 700 to 1,000 people are there each night for Bible study, Boy Scout meetings, choir rehearsals, and other church functions. There is also a high school and an elementary school two blocks from Brentwood.

The business plan was presented to McDonald's, and in May 1999, the church was given the go-ahead to build the franchise. The new restaurant and drive-through window was then allotted 3,000 square feet on the Learning Center's grounds. The Center was already under construction.

A limited partnership between Redmond and the church was created. Redmond eased the approval process by using his McDonald's franchise license, and has agreed to oversee the management of the business. The church spent $150,000 on equipment for the franchise, will pay any additional operational costs, and will receive 100% of the profits. Says Redmond of his contribution: "It's my church and I believe in what we're doing. It will mean jobs for the community and that is the blessing for me. It's a service I am glad to provide for the church."

Redmond's other McDonald's franchises had sales of $5 million last year. First-year sales for the church McDonald's are estimated to gross between $200,000 and $300,000. The franchise expects to employ 75 full-time and part-time senior and young adult workers from the church and the community.

Although no one at the church would go on record against the church-based McDonald's, critics have quietly expressed concern over increasing vehicle traffic in the church's relatively quiet middle-class neighborhood. Others say that by supporting a fast-food establishment, the church appears to not advocate healthy eating habits.

Ratliff focuses on the project's benefits. "Here is a way we can serve our communities with economic development. The church's mandate is to serve the people, and that's what we're doing. We are keeping wealth in our community and helping the dollars circulate in our community."

Worrell agrees. "How can you criticize economic development in underserved communities?" she asks. "That little business spark within the church can ignite into flames and give rise to other businesses in that area. That franchise is a catalyst."