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What's interesting is McDonald's HQ owns the real estate of many McDonald's locations and takes rent from the franchisee. This way they can guarantee a steady s
by httpz 3y ago
What's interesting is McDonald's HQ owns the real estate of many McDonald's locations and takes rent from the franchisee. This way they can guarantee a steady stream of income regardless of their food sales.
I'm not sure how this would've worked out for WeWork.
- winkeltripel 3y agoMcDonalds also refinanced that real estate after opening the store, to build up liquidity for the next location.
- dylan604 3y agoAt this point, isn't GE a financial company more than an engineering/electrics company?
- throwaway2037 3y agoThat was true until the Global Financial Crisis in 2008. Now, they use their finance arm to help customers finance very large purchases. This is common in heavy industry.
- dylan604 3y agoIsn't that precisely how it started? Then, they realized they had so much they could open that financing to more than just large industrial clients. Did they just scale it back to their original intent?
- bandrami 3y agoI've seen a good business study that argues McDonalds is a real estate company with food products as a loss-leader.
- okeuro49 3y agoThis was the plot of the film "The Founder" on the founding of McDonalds. https://m.imdb.com/title/tt4276820/ https://m.imdb.com/title/tt4276820/
- preommr 3y agoThere's a good scene in "The Founder" that covers that concept [0] [0] https://www.google.com/search?q=youtube+mcdonalds+you%27re+in+the+real+estate&oq=youtube+mcdonalds+you%27re+in+the+real+estate&gs_lcrp=EgZjaHJvbWUyCQgAEEUYORigATIGCAEQRRhA0gEINzgyM2owajeoAgCwAgA&sourceid=chrome&ie=UTF-8#fpstate=ive&vld=cid:15a5e3f3,vid:uxCL2RqCuiY,st:0 https://www.google.com/search?q=youtube+mcdonalds+you%27re+i...
- lordnacho 3y agoIt's a general business trope, isn't it? Ford is a pension fund that happens to make cars. Berkshire Hathaway is an insurance company that makes a lot of investments. A supermarket is a bank that sells food. GE at one point was also more or less a financial company that sold industrial goods. I guess the thing is once you take a financial view of how a business works, a lot of things don't look like what they normally look like.
- bandrami 3y agoI know at one point GM cars were mostly used to sell GMAC financing, though I think that particular inversion has stopped now.
- sgt101 3y agoThere was this event, it happened in 2008 and it stopped the GMAC thing like the full stop stops this comment.
- pjc50 3y agoPeople complain about "ZIRP", but it did reduce the benefits of co-mingling finance with retail and decoupled consumer credit from being quite so critical to sales.