McDonald’s

Case Study

Learn how a McDonald’s franchise owner partnered with Citra to upgrade his facilities with high-quality LED lighting with miminal upfront costs.

1. Background

   Neel Chapatwala, a McDonald’s franchise owner of 20 family-run and operated restaurants, was looking to upgrade his facilities.
   19 of the restaurants did not have LED lighting when he purchased them, and the LED lighting already in place at the remaining five restaurants wasn’t sufficient for the ambience and energy savings the facilities needed.
   Chapatwala planned to upgrade the LED lighting in all of his restaurants – even the ones with lighting already in place.
   Due to the upcoming reinvestments by McDonald’s, wherein LED lighting upgrades were recommended by the McDonald’s corporate office, he elected to upgrade a few locations at a time.

2. The Citra Solution

   First, Citra’s site audit team conducted detailed assessments of the existing lighting and site details at Chapatwala’s facilities. The areas included were the parking lots, exterior signs, and kitchens.
   Next, Citra’s design team developed a 3-D model of one of the McDonald’s locations and tested area fixtures from several manufacturers to compare performance.
   Citra also took a myriad of other factors into consideration such as the manufacturer’s financial standing, ability to back their warranty, rated life of fixture, and component and build quality.

3. Project Financing

   After the fixture specifications were finalized, Citra calculated the economics of the project to identify cost-saving measures for Chapatwala and his franchise. This took far more into account than just the payback period, potential rebates, and the cost of the lighting itself.
   To do so, Citra detailed out the labor considerations prior to starting the final economics to capture all facets of the project.
   While conducting a thorough year-by-year cash flow analysis for Chapatwala, Citra discovered that the project economics qualified for Citra’s Lighting-As-A-Service (LaaS) Program.
   The LaaS Program is designed so that businesses can implement projects in their entirety at no or little upfront capital. Business owners benefit from the fact that this program creates a cash-flow positive scenario monthly and includes a service contract covering all products and labor.
   By electing to take advantage of Citra’s LaaS Program, Chapatwala was able to reap the benefits of the new lighting immediately and keep his money to invest in other areas of his business.

4. Project Economics

   The term of the LAAS Program will last 60 months.
   After 60 months, Chapatwala will have the opportunity to own the lighting with a $1.00 buyout.
   Also, Citra included a 60-month service contract as part of the LaaS Program agreement which will cover covered repairs and/or replacements of any failures during the fixed term.

   Monthly Energy & Maintenance Savings		$10,446.00
   Monthly Lighting-As-A-Service Fee		$8,816.00
   Monthly Net Positive Cash-Flow		$1,630.00
   Annual Net Positive Cash-Flow		$19,560.00
   Cumulative 60-Month Cash-Flow		$97,800.00
   Total Project Value		$452,000.00
   Total Upfront Capital Needed (First & Last Months’ Payment Plus $250.00 Application Fee)		$17,882.00
   Total 60-Month Net Cash-Flow to Customer		$79,918.00

   Because of Citra’s LaaS Program and detailed project financial analysis, Chapatwala didn’t have to spend a significant amount of capital to obtain the benefits of new, high-quality LED lighting.
   But he will not just save money; he will actually make money because he didn’t have to use his own financial resources to pay for the entire project upfront.

   When the project began, Chapatwala placed a deposit of $17,882.00 on a project worth $452,000.00. He is estimated to make almost $80K in 5 years based on his ultimate net savings from this project, and he will have the opportunity to purchase the lighting for his company for only $1.00.
   In essence, this customer will be able to upgrade his facilities without having to spend a significant capital on a project worth $452,000.00.

   “Citra was very professional and very knowledgeable compared to other vendors I spoke with. They really got into the details of the solutions they provided. I felt more comfortable with Citra because they assessed my restaurant quickly to find what would be the best fit and what would work best for who we are. I found Rajul to be the most knowledgeable about LED lighting of all the vendors I talked to – even people who’ve been in the industry for decades.” – Neel Chapatwala, McDonald’s Franchisee Owner