3 ms·
>Shopping malls don't even demand a 15%-30% cut of revenue. Shopping malls charged rent, and if you look up typical rent-to-revenue ratios you'll find that ~10
by ineedasername 3y ago
>Shopping malls don't even demand a 15%-30% cut of revenue.
Shopping malls charged rent, and if you look up typical rent-to-revenue ratios you'll find that ~10% is in the range of average, ~20% around the the top end of the range, so not far off the 15% but yes, a bargain compared to 30%. But then again shopping malls don't scan a store's products for basic problems or defects.
On balance, if malls & rent are the comparison point, they roughly balance.
Sure a mall can't, in theory, prevent another group of investors from building a mall #2 next door. In practice though? Local township and city boards can be subverted through regulatory capture such that the people behind the financial interests of mall #1 will make it difficult for mall #2 to get local zoning approvals etc. And really most franchises aren't going to want to setup a competing location within two or three miles of an existing location anyway, but getting in geolocation stretches the metaphor so we can put that aside, as rent is the relevant aspect of the comparison.