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

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

#141

Post by fraserharris »

will_brown wrote: post #111
fraserharris wrote: post #88

An important point about owning the franchise real estate: a rental agreement is far stronger for the landowner than a franchise agreement is for a franchiser. The McDonald's franchise agreement specifies the address the franchise must be located. In effect, McDonald's can cancel a franchise agreement by ending the rental agreement. This gives them enormous power to enforce company-wide standards on cleanliness and m…

>The McDonald's franchise agreement specifies the address the franchise must be located. In effect, McDonald's can cancel a franchise agreement by ending the rental agreement. I don't think you are really taking a position, just acknowledging McD has power to enforce Franchise Agreements more than others Franchisors because separately they tend to also be landlord. on first reading though I thought your comment was s…

Point well made! The book described it as mechanism to force a negligent franchise owner to sell their franchise (not unilaterally take their investment).

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

#142

Post by mpeg »

msie wrote: post #60
gjm11 wrote: post #54

Earlier quoted context omitted.

Asshole ? Why? What harm or pain did Ed cause to anyone by throwing the food away?

Seems disrespectful to poor, starving people.

As Dave Chapelle would put it; you can't do comparative suffering.

There might be people starving in Africa, but I still want my lunch.

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

#143

Post by fuckemem »

yodon wrote: post #131
lbsnake7 wrote: post #35

This is somewhat false. McDonalds amassed all of this real estate during the normal course of doing its main business. It would be like saying Walmart is in the shelf business because they have a lot of shelves. If amassing large amounts of real estate is the end goal, selling burgers for 50 years is probably not the best way to do it. I think McDonalds fears that if it spins off its real estate holdings, those prope…

When Starbucks went public, they explicitly told the investment community "don't invest in us because of coffee, invest in us because of real estate, we are a real estate company that happens to sell coffee"

Perhaps that explains why their coffee tastes awful.

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

#144

Post by greedo »

fraserharris wrote: post #139
JamesBarney wrote: post #132

Earlier quoted context omitted.

My interpretation of what he says was basically McD's has more leverage. Part of establishing a restaurant is establishing enough return clientele at a certain location. And a large portion of the clientele might stay with the owner if it turned into a Jack in the Box. But this number drops off a cliff if it's also across the street. So the BATNA for a non-McDonalds franchisee is just switching franchises, and taking…

Actually, the book expands on that. Originally, McDonald's franchise agreements had exclusive territories (in fact, a franchise agreement could be for an entire region/state/country). McDonald's franchise agreements eventually specified a particular address (own by McDonald's) without any exclusive territory. If you lose the rental of that property, you lose the ability to run the franchise.

Yup, our owner/operator didn't always like to follow the company line, and was rewarded by a new franchisee an exit north of his highest volume location. Of course his agreement gave him right of refusal for the new location, but the numbers didn't add up; so Oak Brook found a willing franchisee who ended up spending a fortune for a relatively low performing store. Eventually that location paid off (20 years of growth will do that), but for the original owner/operator, he saw a 25% yoy decline in sales. Oak Brook has a huge amount of leverage to keep franchisees in line and quiet.

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

#145

Post by greedo »

baby wrote: post #105
Diamons wrote: post #49

Earlier quoted context omitted.

Enjoyed the read overall but one line stuck out: "- I take one bite out of my cold Big Mac and eat one cold fries and throw it all out." You have to be a special kind of asshole to throw away meat and food instead of just saying the food is cold.

I worked at McDonalds and we would throw burgers after X minutes if they didn't sell. Can't remember what X was but we were throwing a lot of . Same thing with fried stuff like mcnuggets except we would wait longer before throwing it. I don't know why we were following the rules for burgers but not for fried stuff... It all seemed like waste to me because X was pretty short. But this was to ensure good quality, crunc…

Used to be 10 minutes. Not sure now. Fried foods like McNuggets, McChicken and Filet O Fish were kept in a cabinet, then assembled into sandwiches. They were kept for roughly 30 min? The reason for the 10 minute rule was a quality issue; after that amount of time, cheese was gross, and the various condiments were trashed.

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

#146

Post by mpeg »

csours wrote: post #62
Diamons wrote: post #49

Earlier quoted context omitted.

Enjoyed the read overall but one line stuck out: "- I take one bite out of my cold Big Mac and eat one cold fries and throw it all out." You have to be a special kind of asshole to throw away meat and food instead of just saying the food is cold.

Kinda OT, but that's why I never buy physically large food items at McD's: the quicker you eat it the warmer it is. Also, the quicker you eat it, the less you have to think about it; and most of McD's food items do not bear much thinking about.

YMMV too.

Personally, in my local McDonald's I can put an order without talking to a human, pick it up and buy some weed on the way out.

Is that representative of every McD? No.

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

#147

Post by mpeg »

ruleabidinguser wrote: post #30
lightbyte wrote: post #25

Earlier quoted context omitted.

>the kids can learn quickly how to determine if they should do what ads tell them to do. The problem is they can not do this at all. Children are extremely easy to manipulate, and that is pretty much what advertising is.

As a kid I quickly learnt to distrust ads, so I'm not sure why you think kids can't do this. They may not be adults, but they're not robots either.

Do you interact with any kids lately? They're all absolutely obsessed with the latest thing that is being pushed on them.

Minecraft, Pokemon Go, Star Wars...

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

#148

Post by emodendroket »

ruleabidinguser wrote: post #115
emodendroket wrote: post #58

Earlier quoted context omitted.

Somehow I don't trust your own judgment of your ability as a child, especially when it is in contrast with the experience of most people and the findings of researchers.

I recall it exactly. When you start to trust theory over reality I'm sure you've taken a bad turn.

Would you also say you're exceptionally modest?

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

#149

Post by hncommenter13 »

vuln wrote: post #56
lukateake wrote: post #48

Earlier quoted context omitted.

Starbucks?

No. Dollar Tree, we recently acquired Family Dollar which is how our store count is so high.

Hey, sorry to leave this here, but didn't see any contact info in your profile.

Would love to chat with you about the dollar store industry, if you'd be so inclined. I'm particularly curious about Dollarama in Canada, if you're at all familiar with them. My email is in my profile.

The basic question: why is Dollarama so much more profitable than everyone else?

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

#150

Post by stephen_g »

linkregister wrote: post #128
betenoire wrote: post #80

Earlier quoted context omitted.

My head agrees with you. My mom's voice in my head fills me with guilt.

Mine too. I have the terrible habit of finishing all the food on my plate, even though 1/4 of it will be converted to fat/simple sugars. Our portions are much bigger than those our parents had.

Are you talking about in the US? Because they're much larger than most of the rest of the world too!

I was pretty amazed the first time I went - for McDonalds specifically, the US's medium size for drinks and fries is bigger than our large size in Australia! And we have no super-size or drink refills. (Our Burger King equivalent is about the only fast food chain I can think of that does free refills. It's very rare for restaurants in general here).

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