Carleton University, School of Architecture-
Value Creation-- McDonalds in France
Sometimes, value can be created through sound design, where perhaps you might least expect it, such as the example of McDonalds in France. By spending 20% more on upfront capital costs, McDonalds France was able to produce architecture that was more in keeping with the milieu of a French town.
By sprucing up interiors too, they were able to keep patrons longer (blasphemy in US stores) and they found, presto magic, that the consumer spent more.
The typical French consumer is now spending $9 USD per visit as compared to just $4 in the USA, according to a Business Week Article (January 13, 2003).
Obviously, to a very bottom line organization like this, the architect must be able to justify spending more on design and construction by pointing to tangible increases in value; in this case, sales at renovated stores are 20% higher.
The three questions that architects always get are:
1. May I see your design?
2. How much does it cost?
3. When can it be ready?
And the next statement that seems to always ensue is:
"It costs too much. You will have to cut the budget."
What we are trying to do in this course, is change the paradigm. We are trying to give architects the tools they need to speak a developer's language. Let's start justifying better design on the basis of higher value created through better design. That means being able to show that the benefits created through better design are greater than its costs and the rate of return on a project (or Internal Rate of Return) is going up not down.
This can be just as true with a public sector project even if benefits are measured in something other than dollars. For a museum project, they could be measured in, say, attendance. For a hospital project, it might be measured in, say, a decrease in hospital wait times or other measures of value that could be affected by superior design attributes.
If this can work for McD's, it can work for anything in architecture and urban design too.