3 ms·

I suspect muzani was referring to it as an investment vehicle, not a rating on the food. How often do you see a McDonalds closing for good?

by matt_s 7y ago

jaclaz 7y ago
>I suspect muzani was referring to it as an investment vehicle, not a rating on the food. >How often do you see a McDonalds closing for good? Ow, come on, he posted: >I almost bought a restaurant. Even the good ones like McDonald's aren't great. It can be read both ways, one of which sounds (to me at least) funny. However if we are going to be picky, a McDonalds (or better a McDonalds you can actually buy) is a franchise: https://en.wikipedia.org/wiki/Franchising https://en.wikipedia.org/wiki/Franchising and whilst McDonalds (the parent company) isn't going to close for good, I know people that managed to lose money attempting to run similar franchises. In such a setup, all the technology, the supplies and the marketing (besides quality standards and training of personnel) come from the franchisor, so the "added value" by the franchisee is relatively low, and compensated accordingly. Some data (maybe accurate, maybe not): https://work.chron.com/average-income-fast-food-franchise-owners-24587.html https://work.chron.com/average-income-fast-food-franchise-ow...
- muzani 7y ago
  I meant "restaurant" as a system that converts raw food into money. McDonald's, franchise or not, counts. Though to my understanding, they're not doing the franchise model as much anymore and are managing it themselves instead. The linked article supports my view and is actually a little more profitable than expected. It quotes 20% net profit, which is amazing when most of the restaurants I see make close to 0% net profit. Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it.
  - jaclaz 7y ago
    >Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it. Yep, the whole point is that "they" decide (and can calculate at the third decimal point, remember it is "their" business and "they" have decades of experience in it) how much is what you bring home. A "franchise" is also the closest thing to being between a rock and a hard place, you have more or less fixed prices (sale prices) and fixed (by them) costs, the only variables you can somehow manage is volume of sales (and it depends mostly or more than anything else on location) and personnel costs (which is anyway in most countries regulated by Law).

I suspect muzani was referring to it as an investment vehicle, not a rating on the food. How often do you see a McDonalds closing for good?

by matt_s 7y ago

I suspect muzani was referring to it as an investment vehicle, not a rating on the food. How often do you see a McDonalds closing for good?

jaclaz 7y ago

>I suspect muzani was referring to it as an investment vehicle, not a rating on the food. >How often do you see a McDonalds closing for good? Ow, come on, he posted: >I almost bought a restaurant. Even the good ones like McDonald's aren't great. It can be read both ways, one of which sounds (to me at least) funny. However if we are going to be picky, a McDonalds (or better a McDonalds you can actually buy) is a franchise: https://en.wikipedia.org/wiki/Franchising https://en.wikipedia.org/wiki/Franchising and whilst McDonalds (the parent company) isn't going to close for good, I know people that managed to lose money attempting to run similar franchises. In such a setup, all the technology, the supplies and the marketing (besides quality standards and training of personnel) come from the franchisor, so the "added value" by the franchisee is relatively low, and compensated accordingly. Some data (maybe accurate, maybe not): https://work.chron.com/average-income-fast-food-franchise-owners-24587.html https://work.chron.com/average-income-fast-food-franchise-ow...

muzani 7y ago
I meant "restaurant" as a system that converts raw food into money. McDonald's, franchise or not, counts. Though to my understanding, they're not doing the franchise model as much anymore and are managing it themselves instead. The linked article supports my view and is actually a little more profitable than expected. It quotes 20% net profit, which is amazing when most of the restaurants I see make close to 0% net profit. Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it.
- jaclaz 7y ago
  >Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it. Yep, the whole point is that "they" decide (and can calculate at the third decimal point, remember it is "their" business and "they" have decades of experience in it) how much is what you bring home. A "franchise" is also the closest thing to being between a rock and a hard place, you have more or less fixed prices (sale prices) and fixed (by them) costs, the only variables you can somehow manage is volume of sales (and it depends mostly or more than anything else on location) and personnel costs (which is anyway in most countries regulated by Law).