McDonald's Real Estate: How They Really Make Their Money (2015)

I remember watching a documentary a few years back where Ronald was talking to some uni grads telling them that in reality he's one of the largest real estate owners globally since the trend is to OWN the space they occupy and not just rent.

Well, if one thinks of how many of these burger joints..

And yes the burgers also make some good money ;)

What impresses me most about McDonald's is the highly effective and efficient incentive structure. You have the franchise owner who is very committed financially and can make a high income, plus lots of low cost labor following a very precise process. And they seem to be able to replicate it at almost any scale.

What impresses me least about McDonald's is their ruthless child-targeted advertising.

EDIT: in sort of a quaint way the incentive structure is reminiscent of the manorial system.

That model was only viable because Kroc found a way to scale the franchise, which the McDonald brothers had previously failed to do. Pretty much everyone involved in the early days seems to have contributed something to the ultimate success of the business.

A good startup movie, by the way.

Misleading. Sure, technically McDonald's doesn't make much money from selling burgers because most of the burgers are sold by franchisees. But by the same argument, Amazon doesn't make any money from selling EC2 instances -- those are sold by Amazon Web Services Inc.

When people talk about McDonald's "selling burgers", what they mean is McDonald's and its franchisees.

Well now I'm pretty curious, how does McDonald's operate all of their distribution channels with the whole franchise/renting model? Most of the Micky D's I've seen have tons of freezer food that they put through various machines to make all of the food items quickly. I can't imagine they let owners get their primary products from anything other than a distribution center. Do the owners need to buy those products separately? Can they buy from alternate distributors? Do they franchise their distribution somehow? Maybe I'm overthinking all of this. But I am genuinely curious how that factors into the franchise model since that means McDonalds is still very liable for food production.