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McDonald's is considering rent deferrals for franchisees

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Re: McDonald's is considering rent deferrals for franchisees

#31

Post by cmcd »

christiansakai wrote: post #14
rubidium wrote: post #7

This sort of action is what we need across the economy. Cancellation or deferral. Rent deferral, interest deferral, mortgage deferral... etc. At the individual level maybe limit it to the lower 50%-70% of income earners. Cancel interest and utility/rent/mortgage payments for lower income population. Do it for 2-3 months. The upper half will just eat into their savings some but won’t suffer like those living paycheck…

Why the divide? The middle class already pays most of the taxes and not getting the benefit as much as the lower income earner and now they are not getting help as well? If you want to make the divide why not just the really high upper income earner vs the rest of the population, since most people in middle class, though they have savings more than $15k are just regular people like you and me, with families and respo…

> The middle class already pays most of the taxes

I'm not so sure about that. The top 1% pays 37% of federal income taxes. Meanwhile, the bottom 50% paid only 3% and 44% of paid nothing at all. Depending on the source you use the middle class in America is typically considered to top out at incomes between 100k and 122k. In either case the middle class pays less than half of income taxes. Then looking at the bigger picture we see income taxes only account for 60% of all taxes.

Sources: https://taxfoundation.org/summary-latest-federal-income-tax-... https://www.irs.gov/statistics/soi-tax-stats-irs-data-book

Re: McDonald's is considering rent deferrals for franchisees

#32

Post by amylene »

grimjack00 wrote: post #27
rubidium wrote: post #7

This sort of action is what we need across the economy. Cancellation or deferral. Rent deferral, interest deferral, mortgage deferral... etc. At the individual level maybe limit it to the lower 50%-70% of income earners. Cancel interest and utility/rent/mortgage payments for lower income population. Do it for 2-3 months. The upper half will just eat into their savings some but won’t suffer like those living paycheck…

> The upper half will just eat into their savings some but won’t suffer like those living paycheck to paycheck. What makes you think the upper half does not also contain people living paycheck to paycheck?

They have fewer people in that category, and also more room to make lifestyle adjustments so they can remain afloat. Also, access to credit and family loans.

Re: McDonald's is considering rent deferrals for franchisees

#33

Post by amylene »

HeWhoLurksLate wrote: post #25
kevin_thibedeau wrote: post #13

Earlier quoted context omitted.

McDonald's franchisees are the upper half.

Feels a bit like this is a "pass it on" type deal- killing the worries for the people in the middle probably relieves a lot of stress for people at the bottom- if I'm not worried about making rent, I'm probably not going to be pushing hours quite as hard, nor am I going to be as strict about people coming in. (Personally, I'd be ensuring that all my workers still had places to live and good food to eat, even if it co…

Unfortunately, this feels like it relies on the same mechanism as trickle down economics.

Re: McDonald's is considering rent deferrals for franchisees

#34

Post by mbreese »

amylene wrote: post #33
HeWhoLurksLate wrote: post #25

Earlier quoted context omitted.

Feels a bit like this is a "pass it on" type deal- killing the worries for the people in the middle probably relieves a lot of stress for people at the bottom- if I'm not worried about making rent, I'm probably not going to be pushing hours quite as hard, nor am I going to be as strict about people coming in. (Personally, I'd be ensuring that all my workers still had places to live and good food to eat, even if it co…

Unfortunately, this feels like it relies on the same mechanism as trickle down economics.

Maybe, but in this instance the trickle down is personal... the people who benefit (franchisees) would be trickling the benefits down to people they know -- their employees. I think the calculus ends up being different when you are giving benefits down to people you know (as opposed to the more nebulous trickle down). McDonalds could also dictate how any rent deferral was handled.

Re: McDonald's is considering rent deferrals for franchisees

#35

Post by klenwell »

0xcde4c3db wrote: post #8
hef19898 wrote: post #3

If a company like McDonalds can pull it off, that will most likely give them quite an advantage. Once things go back to normal, that would mean McDonalds franchise network is likely to be in omaprativley good shape. When competitor don't implement solutios like this, McDonalds would have quite a head start! Not to speak about the franchise owners, and their employees to a certain extent.

As far as I know, most fast food franchises don't own the land under the restaurants in the way that McDonald's does. I'm not familiar with the numbers, but I've seen quips to the effect that McDonald's is a real estate investment firm that does fast food as a side hustle.

That quip was actually documented quite lucidly in The Founder (where Michael Keaton plays Ray Kroc). I really enjoyed that film.

Re: McDonald's is considering rent deferrals for franchisees

#36

Post by larrywright »

AmVess wrote: post #16
larrywright wrote: post #10

This is a good move on their part (assuming they go through with it). People tend to think of restaurant owners like this as “the rich”, but if you look at the numbers there’s actually not that much profit in a single restaurant. The only ones who make good money own a bunch of them. Even then, the profit margins are pretty low, and they’re going to struggle to remain profitable.

You have to have a lot of money and a track record of success before McDonald's will consider taking you on as a franchisee. McDonald's franchisees are wealthy before they open their first restaurant.

It depends. A lot of them start out with a couple of restaurants and then work their way up. At least that was the way it worked years ago. But you’re somewhat correct at least, they’re picky about who they give franchises too. They’re also somewhat unique amongst the big restaurant franchises in that they limit the number of restaurants you can own. They want hands-on owners, and they actually require the owners to be trained on every function in the restaurant.

Source: I worked for a local franchisee about 30 years ago, and still know them casually.

Re: McDonald's is considering rent deferrals for franchisees

#37

Post by unethical_ban »

kevin_thibedeau wrote: post #13
rubidium wrote: post #7

This sort of action is what we need across the economy. Cancellation or deferral. Rent deferral, interest deferral, mortgage deferral... etc. At the individual level maybe limit it to the lower 50%-70% of income earners. Cancel interest and utility/rent/mortgage payments for lower income population. Do it for 2-3 months. The upper half will just eat into their savings some but won’t suffer like those living paycheck…

McDonald's franchisees are the upper half.

I would like this relief to be tied to "keep paying people and maintain cleanliness at your stores".

To use the term, "trickle down" but with requirements for the trickle part.

Re: McDonald's is considering rent deferrals for franchisees

#39

Post by catblast »

amylene wrote: post #33
HeWhoLurksLate wrote: post #25

Earlier quoted context omitted.

Feels a bit like this is a "pass it on" type deal- killing the worries for the people in the middle probably relieves a lot of stress for people at the bottom- if I'm not worried about making rent, I'm probably not going to be pushing hours quite as hard, nor am I going to be as strict about people coming in. (Personally, I'd be ensuring that all my workers still had places to live and good food to eat, even if it co…

Unfortunately, this feels like it relies on the same mechanism as trickle down economics.

In reality this is the effect of trickle up economics. Ie the upper class relies on extracting wealth from the bottom mostly through labor. This is a fight for their own survival.

Re: McDonald's is considering rent deferrals for franchisees

#40

Post by ryanmercer »

JadeNB wrote: post #19
ukabwlsbeux wrote: post #6

Now would be a good time for a general rent strike until the government steps in to help small businesses

> Now would be a good time for a general rent strike until the government steps in to help small businesses If we're talking about the US here, 'until' seems to be an optimistic presumption that our government has any intentional of helping small businesses.

>If we're talking about the US here, 'until' seems to be an optimistic presumption that our government has any intentional of helping small businesses.

There are dozens of articles of Trump taking something to congress today apparently to do just this

https://www.chicagotribune.com/coronavirus/ct-nw-coronavirus...

>Mnuchin planned to outline that roughly $850 billion package to Senate Republicans at a private lunch, with officials aiming to have Congress approve it this week.

and

>“The Senate will not adjourn until we have passed significant and bold new steps above and beyond what the House has passed to help our strong nation and our strong underlying economy weather this storm," McConnell said.

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