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Some people say that McDonald's Corp is not a restaurant, but a real estate company. They get other people to own and run the restaurants, but they buy and leas
by unreal37 8y ago
Some people say that McDonald's Corp is not a restaurant, but a real estate company. They get other people to own and run the restaurants, but they buy and lease the land to them at a profit.
So how is this different than WeWork's CEO owning the building and leasing it to WeWork?
He's essentially acting like Ray Kroc.
- telotortium 8y agoIn that case, McDonald's still owns the real estate, not Ray Kroc. Here the interests of the corporation and Ray Kroc (as shareholder of McDonald's) are aligned - McDonald's has no incentive to overpay for the real estate, because that would reduce its profits.
- CalChris 8y agoDid Ray Kroc personally buy real estate and then lease it to McDonalds to sublease it to franchisees? Was he on both sides of the transactions, leasor as owner of the property and leasee as CEO of the company signing the first lease?
- l33tbro 8y agoMcDonald's are basically profit engineers. There franchisee terms here is Aus: • 20 year minimum lock-in for franchisee. • A monthly service/royalty fee based on a percentage of the restaurant’s gross sales (currently 5%). • A monthly rental being a fixed base rent and a percentage of the restaurant’s gross sales • A monthly advertising contribution of not less than 4% of gross sales. • All Outgoings including rates and utilities. Also a metric butt-tonne of start-up costs.