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Ray Kroc is analogous to Adam Neumann. They both expanded a marginally profitable (and hard to grow) business by expanding a few locations than leveraging the

Ray Kroc is analogous to Adam Neumann. They both expanded a marginally profitable (and hard to grow) business by expanding a few locations than leveraging the capital to buy real-estate, which allowed them to stop caring about the original and individual franchised business success. Using the massive income of being commercial property landlords, even if the franchises failed, they had revenue growth. Now that Kroc is gone, the reference to McDonald's as a corporation is convenient, since the history is understood and available. The movie "The Founder" might clear things up.

kgwgk 7y ago
Did Kroc leased his own real estate to the company he managed? I don’t think so, but I could be wrong.
- lkschubert8 7y ago
  From what I understand he purchased real estate and then leased it to the franchisees.
- reallydude 7y ago
  https://money.howstuffworks.com/mcdonalds2.htm https://money.howstuffworks.com/mcdonalds2.htm Just googling the history, so you can understand what happened, is a minimum when having a discussion about history. Whoever went so far as to wasting a point downmodding me, didn't even do that.
  - kgwgk 7y ago
    Please help me understand what happened. Who owned the real estate? Ray Kroc? According to https://www.moaf.org/publications-collections/financial-history-magazine/103/_res/id=Attachments/index=0/McDonalds.pdf https://www.moaf.org/publications-collections/financial-hist... Franchise Realty Corp was owned by McDonald’s.
    - reallydude 7y ago
      > Who owned the real estate? Ray Kroc? From wikipedia: At the closing table, Kroc became annoyed that the brothers would not transfer to him the real estate and rights to the original San Bernardino location Regardless of the legal agreements, the intent was the same. Since the beginning of this thread, it looks like nitpicking to avoid concession, so you can believe what you want. GL with that. To recap, history. Ray Kroc is analogous to Adam Neumann. 2 founders who leveraged real-estate over the initial franchise business. Substituting McDonald's in name for Ray Kroc is a matter of a temporal situation (or laziness).
      - kgwgk 7y ago
        Ray Kroc, who controlled McDonald’s, set up a scheme where one part of McDonald’s bought real estate and leased it to another part of McDonald’s (which in turn leased it to franchisees). That’s my understanding at least, it seems you don’t dispute it. The intent was for the company to benefit. Adam Neumann, who controls WeWork, set up a scheme where Adam Neumann and relatives bought real estate and leased it to WeWork (no franchise model in this case, by the way). The intent was for Adam Neumann to benefit. The analogy is flawed and misleading, the conflict of interests is evident and this anomalous situation is being corrected. A much better analogy to what McDonald’s did in the beginning is what WeWork intends to do now: https://www.bloomberg.com/news/features/2019-05-15/wework-wants-to-be-its-own-landlord-it-also-wants-2-8-billion https://www.bloomberg.com/news/features/2019-05-15/wework-wa... “WeWork is creating an investment fund that aims to raise billions of dollars to buy stakes in buildings where it will be a major tenant” (Still, it’s not exactly the same, I think, as it will be a fund partially owned by WeWork and partially by external investors; I don’t fully understand what was the structure for Franchise Realty but as far as I understand external investors provided loans to that corporation.)
deleted 7y ago
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adventured 7y ago
> The movie "The Founder" might clear things up. The movie The Founder is mostly fake. It's unlikely to clear much up. http://rayandjoan.com/the-founder/ http://rayandjoan.com/the-founder/

kgwgk 7y ago

Did Kroc leased his own real estate to the company he managed? I don’t think so, but I could be wrong.

lkschubert8 7y ago
From what I understand he purchased real estate and then leased it to the franchisees.
reallydude 7y ago
https://money.howstuffworks.com/mcdonalds2.htm https://money.howstuffworks.com/mcdonalds2.htm Just googling the history, so you can understand what happened, is a minimum when having a discussion about history. Whoever went so far as to wasting a point downmodding me, didn't even do that.
- kgwgk 7y ago
  Please help me understand what happened. Who owned the real estate? Ray Kroc? According to https://www.moaf.org/publications-collections/financial-history-magazine/103/_res/id=Attachments/index=0/McDonalds.pdf https://www.moaf.org/publications-collections/financial-hist... Franchise Realty Corp was owned by McDonald’s.
  - reallydude 7y ago
    > Who owned the real estate? Ray Kroc? From wikipedia: At the closing table, Kroc became annoyed that the brothers would not transfer to him the real estate and rights to the original San Bernardino location Regardless of the legal agreements, the intent was the same. Since the beginning of this thread, it looks like nitpicking to avoid concession, so you can believe what you want. GL with that. To recap, history. Ray Kroc is analogous to Adam Neumann. 2 founders who leveraged real-estate over the initial franchise business. Substituting McDonald's in name for Ray Kroc is a matter of a temporal situation (or laziness).
    - kgwgk 7y ago
      Ray Kroc, who controlled McDonald’s, set up a scheme where one part of McDonald’s bought real estate and leased it to another part of McDonald’s (which in turn leased it to franchisees). That’s my understanding at least, it seems you don’t dispute it. The intent was for the company to benefit. Adam Neumann, who controls WeWork, set up a scheme where Adam Neumann and relatives bought real estate and leased it to WeWork (no franchise model in this case, by the way). The intent was for Adam Neumann to benefit. The analogy is flawed and misleading, the conflict of interests is evident and this anomalous situation is being corrected. A much better analogy to what McDonald’s did in the beginning is what WeWork intends to do now: https://www.bloomberg.com/news/features/2019-05-15/wework-wants-to-be-its-own-landlord-it-also-wants-2-8-billion https://www.bloomberg.com/news/features/2019-05-15/wework-wa... “WeWork is creating an investment fund that aims to raise billions of dollars to buy stakes in buildings where it will be a major tenant” (Still, it’s not exactly the same, I think, as it will be a fund partially owned by WeWork and partially by external investors; I don’t fully understand what was the structure for Franchise Realty but as far as I understand external investors provided loans to that corporation.)

deleted 7y ago

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adventured 7y ago

> The movie "The Founder" might clear things up. The movie The Founder is mostly fake. It's unlikely to clear much up. http://rayandjoan.com/the-founder/ http://rayandjoan.com/the-founder/