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Like many corporations nowadays, McDonald's is basically a real estate holding company. The actual franchised businesses that operate on their land are tenants,

Like many corporations nowadays, McDonald's is basically a real estate holding company. The actual franchised businesses that operate on their land are tenants, and as their landlord, McDonald's is, IMO, only incentivized to help them succeed financially insomuch as they desire to collect as much rent from them as possible. This ice cream machine thing is, IMO, an obfuscated method of transferring more value from the ground level businesses to McD's corporate, via the Taylor machine vendor middleman. In other words, paying more rent.

kyleee 3y ago
I think more money is going to Taylor in recurring service revenue. But there were probably kickbacks to McDs when the use of this machine was mandated
- blamazon 3y ago
  Kick-back doesn't have to be a one time thing - my guess (unsubstantiated) is the contracts involved routinely time out, requiring more 'golf-course negotiations.'
  - ghostpepper 3y ago
    That would mean there should be even more evidence laying around, no?
    - blamazon 3y ago
      In theory yes, but in practice, I feel that the transferred value could be ambiguous and obfuscated, even intangible. I would be surprised if McDonald's doesn't have a world class general counsel and legal team that can get very creative. I readily acknowledge this is a cynically conspiratorial take with no evidential basis.
- gruez 3y ago
  >>This ice cream machine thing is, IMO, an obfuscated method of transferring more value from the ground level businesses to McD's corporate, via the Taylor machine vendor middleman. In other words, paying more rent. >But there were probably kickbacks to McDs when the use of this machine was mandated I see this being insinuated since day 1, but after 2 years of lawsuits no document has surfaced during discovery to support this claim. I realize absence of proof isn't proof of absence, but given how much this piece of evidence will help Kytch's case, if not in court of law then in the court of public opinion, I'm inclined to tentatively conclude no such malfeasance has occurred.
  - deleted 3y ago
    [deleted]
greedo 3y ago
This is an inaccurate meme that needs to die. Yes, McDonalds is a large owner of real estate. Does this mean that's where they get their profits? Not so much. Most franchisees pay roughly 10% of gross sales to McDonalds as "rent" (this is in addition to the 4% they pay as a monthly service fee for other aspects of the relationship). Since this "rent" is based on gross sales, the primary incentive on McDonalds part to increase the franchisee's sales. Your argument also ignores that roughly 30% of McDonalds profits comes from stores it operates itself.
- manquer 3y ago
  As always hanlon’s razor applies: far more likely incompetence than malice. They don’t care to fix the software product or service here because they don’t have to , it is a captive market , you can buy realistically machines [1] from one company and service from. McD also benefits from this due to Veblen luxury good like effects : being a limited product, you are far more likely to now the ice cream when the machine when it is running as it is now a special occasion adding to the overall satisfaction, we wouldn’t be talking about it so much if those damn things worked, like we dont talk about French fries machines . [1] the Italian alternative is not the good enough they don’t have state side ops , parts can take weeks to arrive , few restaurants will actually buy them

kyleee 3y ago

I think more money is going to Taylor in recurring service revenue. But there were probably kickbacks to McDs when the use of this machine was mandated

blamazon 3y ago
Kick-back doesn't have to be a one time thing - my guess (unsubstantiated) is the contracts involved routinely time out, requiring more 'golf-course negotiations.'
- ghostpepper 3y ago
  That would mean there should be even more evidence laying around, no?
  - blamazon 3y ago
    In theory yes, but in practice, I feel that the transferred value could be ambiguous and obfuscated, even intangible. I would be surprised if McDonald's doesn't have a world class general counsel and legal team that can get very creative. I readily acknowledge this is a cynically conspiratorial take with no evidential basis.
gruez 3y ago
>>This ice cream machine thing is, IMO, an obfuscated method of transferring more value from the ground level businesses to McD's corporate, via the Taylor machine vendor middleman. In other words, paying more rent. >But there were probably kickbacks to McDs when the use of this machine was mandated I see this being insinuated since day 1, but after 2 years of lawsuits no document has surfaced during discovery to support this claim. I realize absence of proof isn't proof of absence, but given how much this piece of evidence will help Kytch's case, if not in court of law then in the court of public opinion, I'm inclined to tentatively conclude no such malfeasance has occurred.
- deleted 3y ago
  [deleted]

greedo 3y ago

This is an inaccurate meme that needs to die. Yes, McDonalds is a large owner of real estate. Does this mean that's where they get their profits? Not so much. Most franchisees pay roughly 10% of gross sales to McDonalds as "rent" (this is in addition to the 4% they pay as a monthly service fee for other aspects of the relationship). Since this "rent" is based on gross sales, the primary incentive on McDonalds part to increase the franchisee's sales. Your argument also ignores that roughly 30% of McDonalds profits comes from stores it operates itself.

manquer 3y ago
As always hanlon’s razor applies: far more likely incompetence than malice. They don’t care to fix the software product or service here because they don’t have to , it is a captive market , you can buy realistically machines [1] from one company and service from. McD also benefits from this due to Veblen luxury good like effects : being a limited product, you are far more likely to now the ice cream when the machine when it is running as it is now a special occasion adding to the overall satisfaction, we wouldn’t be talking about it so much if those damn things worked, like we dont talk about French fries machines . [1] the Italian alternative is not the good enough they don’t have state side ops , parts can take weeks to arrive , few restaurants will actually buy them