"Retail-as-Real-Estate" plays don't always work. e.g. Sears, KMart.
Yeah you need a profitable business to pay the rent with.
McDonald's Real Estate: How They Really Make Their Money (2015)
171–180 of 273 posts
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#172If you're ever at a meetup, and the presenter dances around the question: "How does your company make money?" then ask yourself, is it possible that this company is in marketing/advertising? More generally, ask yourself: Does this company's operations give it high quality information about a particular market? The takeaway: Don't dismiss a useful service that you can't directly monetize. It's possible that you can ga…
While this is true, it is extremely hard to do in practice. You have to get good information, make sure it is good information, convince a market that it is good information, and then prevent your competitors and your clients from simply replicating your process.
You have to get good information, make sure it is good information
Yes, but often much of this can happen largely as a consequence of your doing something else, and you may not realize it.
convince a market that it is good information
Which is just basic Marketing.
and then prevent your competitors and your clients from simply replicating your process
Which is also a common issue with startups in general. Good word of mouth can keep you ahead of competitors, and you can make it cheaper for clients to just pay you than it would be to do it themselves. All basic things.
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#173Earlier quoted context omitted.
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.
> Look at movie theaters. I don't think it was like that in the beginning. Running a cinema (movie theater) was a normal business until Hollywood milked it to the extreme. They created their own chains of multiplexes in many countries to push their idea of how the business should work. These days modern cinemas are built like tourist traps with customers having to either walk through/past chain restaurants or having…
I've not once been to a movie theater like you describe. All of the ones around here are like you indicate disappeared in the 90s. Where are you located?
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#174Earlier quoted context omitted.
While this is true, it is extremely hard to do in practice. You have to get good information, make sure it is good information, convince a market that it is good information, and then prevent your competitors and your clients from simply replicating your process.
You have to get good information, make sure it is good information Yes, but often much of this can happen largely as a consequence of your doing something else, and you may not realize it. convince a market that it is good information Which is just basic Marketing. and then prevent your competitors and your clients from simply replicating your process Which is also a common issue with startups in general. Good word o…
Some people have done sorta ok with this as a fallback position when their business model failed. I think it's a pretty dicey proposition. Foursquare did it after failing at everything else, and while they're ostensibly 'profitable' they're deeply in the red with little hope of a return to their investors. They're surviving to fight another day, but... eh.
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#175Off topic: I've trained myself to look for a McDonald's first when in a pinch and need coffee. This vs looking for a Pete's or a Starbucks. If all you need is a basic drink, they get it more or less right for several hundreds of a percent lower.
McDonalds is surprisingly not bad at coffee these days. They overtook Costa and Starbucks in the UK in terms of cups sold.
Also the new self service kiosks make ordering a bit less grim http://burgerlad.com/2015/02/mcdonalds-touch-screen-ordering...
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#176Earlier quoted context omitted.
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.
Their coffee tastes awful for the same reason that McD's makes awful food: it's optimized for standardization/consistency.
Starbucks roasts all their coffee to relatively exorbitant degrees to cover up the inconsistency brought about by their very-multi-origin sourcing.
Some Starbucks locations sell "single origin" coffee which tastes quite a bit better, if only because they don't have to hide the variance in taste and can afford not to roast it to hell.
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#177>During the 2008 recession, McDonald’s leaned heavily on this facet of their business as they capitalized on an anemic property market – buying up more of the land and buildings where it operates.
I think a lot of why real estate works for them is that the business is not affected by recessions - they may even sell more burgers if people can't afford fancy places. So they can buy real estate cheap when others can't.
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#178The Founder is a movie that tells the story of the birth and growth of McDonald's ( https://www.rottentomatoes.com/m/the_founder/ ), and it covers much of the ground covered in this article. In addition to being a very well-done movie, it does a superb job of describing the relationship between the visionary founders of a startup, and the sales guys and bean counters who turn it into a successful business. It doesn't…
I hope this isn't like The Social Network which is mixed with a lot of fictions.
Re: McDonald's Real Estate: How They Really Make Their Money (2015)
#179Earlier quoted context omitted.
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
>I just assumed they were still doing it
Can't really confirm that assumption, even outside of Canada where there's no regulation in place. Last time I remember McDonald's specifically marketing to children was in the 80's, since then they've changed their marketing approach several times focusing more on how "healthy" the food supposedly is or how it's locally sourced.