McDonald's Real Estate: How They Really Make Their Money (2015) • Hacker News Board

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

#261

Post by baby » Sat, Apr 22, 2017, 8:02 PM UTC

greedo wrote: post #255

baby wrote: post #249

Earlier quoted context omitted.

define better run? You mean from a business stand point? Sure. We would throw a lot of things, wash our hands all the time. From a hygienic/client point of view? I wouldn't agree.

I meant from a QSC standpoint. I'm sure this varies from region to region, but of the 200-400 stores I visited in my career, it wasn't even a close contest. Better quality food, better service, and better cleanliness. Even things like physical premises were generally kept better. I wouldn't hold this against any crew/mgmt team, since facilities maintenance was usually out of their control to a large extent. Our store…

What is QSC?

And what you say doesn't really make sense to me, of course my personal experience and what I was hearing at McDonalds is very subjective. But the official restaurants are here to show off what McDonalds is, they are supposed to hold the bar way higher than any other McDonalds restaurants.

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

#262

Post by greedo » Sat, Apr 22, 2017, 8:33 PM UTC

baby wrote: post #261

greedo wrote: post #255

Earlier quoted context omitted.

I meant from a QSC standpoint. I'm sure this varies from region to region, but of the 200-400 stores I visited in my career, it wasn't even a close contest. Better quality food, better service, and better cleanliness. Even things like physical premises were generally kept better. I wouldn't hold this against any crew/mgmt team, since facilities maintenance was usually out of their control to a large extent. Our store…

What is QSC? And what you say doesn't really make sense to me, of course my personal experience and what I was hearing at McDonalds is very subjective. But the official restaurants are here to show off what McDonalds is, they are supposed to hold the bar way higher than any other McDonalds restaurants.

QSC=quality, service, and cleanliness.

McOpCo stores have to follow all the rules and policies that Oak Brook dictates to the franchisees, but they also have to be profitable. Oak Brook was often out of touch with how life was for franchisees, and would make requirements that just didn't jibe with making a buck. A franchisee would make the decision to either emphasize or de-emphasize a new policy/procedure, and deal with the consequences from their regional manager if it became an issue.

McOpCo stores weren't immune to business pressures either; having to follow (in theory) all the policies and regulations imposes a cost on their business. And one of the keys to a well run franchise was a stable management team and stable staff under that team. With McOpCo stores being a stepping stone for managers to climb the ranks, it was harder to develop the team cohesion that a good franchisee could.

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

#263

Post by PhantomGremlin » Sat, Apr 22, 2017, 8:53 PM UTC

greedo wrote: post #140

_wp3r wrote: post #86

Earlier quoted context omitted.

It is all through one distribution vendor with regards to product now. Only plant(equipment) purchases are outside of the primary distributor now.

It's killing me that I can't remember the distributor! Sixteen years of working through them and my mind is a sieve. This was in SoCal, and they had the contract for almost all of the region.

I will guess that it was Golden State Foods. They are a supplier to McDonald's, and California is The Golden State.

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

#264

Post by PhantomGremlin » Sat, Apr 22, 2017, 9:07 PM UTC

tim333 wrote: post #175

temp246810 wrote: post #96

Off 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...

Ahhh, London. When I spent some time there 30+ years ago, I bought coffee from the McDonald's across from the Warren Street tube station (still appears to be there according to Google Maps).

But it was of necessity. It was very difficult to get a good cup of coffee from other UK fast food outlets. Has coffee caught on in the UK? At the time, coffee seemed to be mostly an after dinner drink.

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

#265

Post by warcher » Sun, Apr 23, 2017, 6:49 PM UTC

stcredzero wrote: post #246

warcher wrote: post #174

Earlier quoted context omitted.

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.

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. Sounds like they are deeply in the red because they were chasing something else? What if they realized this much…

Well, the data comes from a substantial investment, which much be returned, or the business will be a failure. This is not a public service-- if you did some cool shit, but ultimately the bottom line is turning a dollar invested into fifty cents returned, you have explicitly and decisively failed in your work.

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

#266

Post by wslh » Sun, Apr 23, 2017, 10:55 PM UTC

infinite8s wrote: post #220

wslh wrote: post #29

Earlier quoted context omitted.

> the parents can always say no or the kids can learn quickly... The parents need to spend a lot of time to counteract those evil forces and you cannot teach a kid to not like the amazing toy he/she is watching on TV. You can teach them that they can receive presents on specific date though.

You can also get rid of your TV and not expose them to ads at all.

TV is only one source of ads, YouTube, games, and other web/mobile resources are full of ads. I cannot get rid of all of them without creating creatures from another planet.

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

#267

Post by dvtv75 » Mon, Apr 24, 2017, 2:20 AM UTC

JohnJamesRambo wrote: post #24

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…

What is wrong with advertising to children? They don't have any money, the parents can always say no or the kids can learn quickly how to determine if they should do what ads tell them to do. They will greatly need that skill in modern America. Teach them early haha.

As a friend of mine explained (his Master's Thesis used this topic), the idea that the marketer is trying to get them to spend money on something is simplistic and misguided. What's actually happening is they're trying to create a brand awareness, and a (subconscious) positive association, so that the child will grow up to feel positively toward the business or product.

About 10 or 15 years ago, there was a McDonalds ad that had parents dressing up. The kids exclaimed "The black suit! You know what that means!" "McDonalds for breakfast!" Cut to the kids smiling and happy while eating at McDonalds.

Positive associations are simple to create, particularly in those unaware of what you are doing.

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

#268

Post by dvtv75 » Mon, Apr 24, 2017, 2:39 AM UTC

omegaham wrote: post #197

arkades wrote: post #176

Earlier quoted context omitted.

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 a…

That consistency is worth a lot . I can grab a coffee and sit down with my laptop in Portland, Boston, or Yuma, and I will have the exact same mediocre experience. I don't care about having a transcendent coffee journey; I care about getting a predictable cup of coffee, a kinda-comfortable space, and wifi to check my email. That's it. I can hunt for some coffeeshop that might be great or might be awful, or I can head…

So, instead of taking the 50/50 chance of something being great, you'll accept downright poor instead.

I'm not actually poking fun of you, one of my friends has the same attitude - something that I just can't understand. I'd rather try and find something that was decent than something that's not.

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

#269

Post by logfromblammo » Mon, Apr 24, 2017, 2:16 PM UTC

PhasmaFelis wrote: post #253

logfromblammo wrote: post #78

Earlier quoted context omitted.

The temperature of food can be easily changed with the ubiquitous household appliances called "refrigerator" and "microwave oven". And it isn't as though a drop in temperature of 5 degrees changes the flavor. It's like throwing your pants away because you spilled ketchup on them, or throwing your car away because it ran out of gas--trivial issue, easily remedied. Besides that, McDonald's corporate considers the servi…

> The temperature of food can be easily changed with the ubiquitous household appliances called "refrigerator" and "microwave oven". And it isn't as though a drop in temperature of 5 degrees changes the flavor. You ever eaten a microwaved hamburger? :)

You know, that gives me an idea for a science fair project. Conduct a blind taste test for the same food prepared in different ways. I'm thinking hot dogs, though.

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

#270

Post by resalisbury » Mon, Apr 24, 2017, 9:20 PM UTC

One of the core arguments of article is misleading, since it claims McDonald's is a real estate company based on the share of Net Income coming from owned versus franchised restaurants. The share of Net Income is a misleading comparison, because (1)it fails to account for the cost of capital associated in owning real estate (2) over 85% of McDonalds are franchised, the remaining 15% produce all of that income, so even on this misleading basis of just considering net income, the profits are more balanced than the article makes it appear.

- percent franchised vs owned https://www.fool.com/investing/general/2016/04/03/what-perce...

- quote from article that is misleading"Of that $18.2 billion generated by company-operated stores in 2014, the corporation keeps just $2.9 billion. Of the $9.2 billion coming from franchisees, the corporation keeps $7.6 billion."