4 ms·

At McDonald’s, the Happiest Meal Is Hot Profits

20 points by robg 18y ago

jbarciauskas 18y ago
Cheap food - the perfect counter-cyclical business model. For more of these, I recommend Marginal Revolution's "Countercyclical Asset" series (http://www.google.com/search?hl=en&domains=www.marginalrevolution.com&sitesearch=www.marginalrevolution.com&q=countercyclical+asset&btnG=Search&sitesearch=www.marginalrevolution.com http://www.google.com/search?hl=en&domains=www.marginalr...) Also along the same lines, a link within that series is from September 28th, which states, "The Standard & Poor’s 500 Index fell 8.4 percent, the most since Oct. 26, 1987, as only Campbell Soup Co. gained."
aneesh 18y ago
Not sure if this is still the case, but McDonalds made more money off real estate than from selling food. Apparently McDonalds franchises don't own the restaurant property they sit on. McDonalds rents it to them -- and that accounts for a significant fraction of McDonalds revenue. Link: http://www.thegreatloan.com/What_20_the_20_Big_20_Players_20_Do.html http://www.thegreatloan.com/What_20_the_20_Big_20_Players_20...
- snprbob86 18y ago
  I can't seem to locate a source now, but a few years ago I recall reading that McDonald's was either the #1 or #2 land owner in the world. The other? The Catholic Church.
  - baddox 18y ago
    PRIVATE land owner I would believe.
  - madh 18y ago
    This point was mentioned in Fast Food Nation.
- anamax 18y ago
  McDonalds the corp can't make money from francisees selling food because McDonalds the corp's revenue from franchisees is for services provided (including land) and "right to call yourself McDonalds" fees. However, over half of McDonalds are not franchises, but corporate "stores". In that case, McDonalds the corp can only make money by selling food.
deleted 18y ago
[deleted]
mikeyur 18y ago
I want a Big Mac now.
petercooper 18y ago
Like or hate the food, McDonald's is a great company with a great brand. A few years ago I read "McDonald's - Behind The Arches" by John Love and realized how agile they are. Ideas for new products are bubbling up from everywhere, and McDonald's seems focused on honing their product and throwing out old habits when they no longer work.

20 points by robg 18y ago

Cheap food - the perfect counter-cyclical business model. For more of these, I recommend Marginal Revolution's "Countercyclical Asset" series (http://www.google.com/search?hl=en&domains=www.marginalrevolution.com&sitesearch=www.marginalrevolution.com&q=countercyclical+asset&btnG=Search&sitesearch=www.marginalrevolution.com http://www.google.com/search?hl=en&domains=www.marginalr...) Also along the same lines, a link within that series is from September 28th, which states, "The Standard & Poor’s 500 Index fell 8.4 percent, the most since Oct. 26, 1987, as only Campbell Soup Co. gained."

aneesh 18y ago

Not sure if this is still the case, but McDonalds made more money off real estate than from selling food. Apparently McDonalds franchises don't own the restaurant property they sit on. McDonalds rents it to them -- and that accounts for a significant fraction of McDonalds revenue. Link: http://www.thegreatloan.com/What_20_the_20_Big_20_Players_20_Do.html http://www.thegreatloan.com/What_20_the_20_Big_20_Players_20...

snprbob86 18y ago
I can't seem to locate a source now, but a few years ago I recall reading that McDonald's was either the #1 or #2 land owner in the world. The other? The Catholic Church.
- baddox 18y ago
  PRIVATE land owner I would believe.
- madh 18y ago
  This point was mentioned in Fast Food Nation.
anamax 18y ago
McDonalds the corp can't make money from francisees selling food because McDonalds the corp's revenue from franchisees is for services provided (including land) and "right to call yourself McDonalds" fees. However, over half of McDonalds are not franchises, but corporate "stores". In that case, McDonalds the corp can only make money by selling food.

deleted 18y ago

[deleted]

mikeyur 18y ago

I want a Big Mac now.

petercooper 18y ago

Like or hate the food, McDonald's is a great company with a great brand. A few years ago I read "McDonald's - Behind The Arches" by John Love and realized how agile they are. Ideas for new products are bubbling up from everywhere, and McDonald's seems focused on honing their product and throwing out old habits when they no longer work.