Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

blog.wallstreetsurvivor.com

Post reply on HN
Print view View original

11–20 of 273 posts

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

#11

Post by harryh »

cperciva wrote: post #8

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 .

Amazon Web Services Inc. is wholly owned by Amazon, Inc.

That is not true of the franchisees. That's a pretty big difference.

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

#12

Post by greedo »

TheGRS wrote: post #10

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 sepa…

The owner/operators purchase from approved vendors; I've been out of the game for awhile, but we bought everything through two distributors; bread products from an approved vendor, and everything else from a second vendor.

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

#13

Post by harryh »

tptacek wrote: post #6
kaypro wrote: post #3

I just watched "The Founder" last night. I had always assumed Ray Kroc was the genius who pivoted to focusing on real estate for their expanding franchise model when really it was Harry J. Sonneborn who convinced Ray that was the way to go. Worth a watch.

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.

One of the things I really liked about the movie is that Kroc didn't actually come up with many of the ideas at all. He was just very successful at recognizing good ideas, good talent, and synthesizing them together.

Traits of a good founder.

Plus one on it being a good startup movie.

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

#14

Post by dcwca »

elevensies wrote: post #4

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…

I haven't seen child-targets marketing from them in decades here in Canada. Where do you live and what do you see?

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

#15

Post by WalterBright »

It was an eye-opener for me when I was a teen and bought a gallon of soft drink syrup from a McDonald's for use at a party. It worked out to about 5 cents a cup for the drink in a soft drink, which sold for 75 cents (if I remember correctly). McDonald's doesn't make money selling burgers, they make money selling the soft drinks and the fries.

The same goes for any restaurant, it's why they ply you for drinks.

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

#16

Post by WalterBright »

harryh wrote: post #13
tptacek wrote: post #6

Earlier quoted context omitted.

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.

One of the things I really liked about the movie is that Kroc didn't actually come up with many of the ideas at all. He was just very successful at recognizing good ideas, good talent, and synthesizing them together. Traits of a good founder. Plus one on it being a good startup movie.

Ideas are a dime a dozen. It's implementing them that matters.

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

#18

Post by philliphaydon »

harryh wrote: post #13
tptacek wrote: post #6

Earlier quoted context omitted.

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.

One of the things I really liked about the movie is that Kroc didn't actually come up with many of the ideas at all. He was just very successful at recognizing good ideas, good talent, and synthesizing them together. Traits of a good founder. Plus one on it being a good startup movie.

+1 on the movie. I thought it was going to be bad but it turned out to be really good.

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

#19

Post by elevensies »

dcwca wrote: post #14
elevensies wrote: post #4

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…

I haven't seen child-targets marketing from them in decades here in Canada. Where do you live and what do you see?

Also in Canada, I just assumed they were still doing it -- I don't watch any children-targeted media so I wouldn't see it anyway. I think I saw an ad during the hockey game last night of a kid eating a McMuffin at night. But a quick look at their youtube channel and it seems they're still at it: https://www.youtube.com/watch?v=JWMQt_-w75Y

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

#20

Post by ghaff »

WalterBright wrote: post #15

It was an eye-opener for me when I was a teen and bought a gallon of soft drink syrup from a McDonald's for use at a party. It worked out to about 5 cents a cup for the drink in a soft drink, which sold for 75 cents (if I remember correctly). McDonald's doesn't make money selling burgers, they make money selling the soft drinks and the fries. The same goes for any restaurant, it's why they ply you for drinks.

Look at movie theaters. They make all their money to a first approximation from popcorn and soda. The movie is just the loss leader that gets people in the door.

It's also where the now much-mocked "super sizing" comes from. They can up the revenue per meal while upping the cost by almost nothing.

Post reply on HN