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)

#71

Post by linkregister » Thu, Apr 20, 2017, 9:17 PM UTC

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.

1. 40% of food in the U.S. is discarded. https://www.nrdc.org/sites/default/files/wasted-food-IP.pdf

2. Much food is never harvested. A large portion of it is also never taken to market due to blemishes. http://californiawatch.org/health-and-welfare/food-waste-rem...

3. Supermarkets discard about 1/3 of their food due to spoilage, blemishes, and overripeness. http://www.npr.org/sections/thesalt/2014/09/25/351495274/sup...

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

#72

Post by Hermel » Thu, Apr 20, 2017, 9:19 PM UTC

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.

Good ads work on an emotional level. They work regardless of whether you know you can't trust then.

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

#73

Post by analog31 » Thu, Apr 20, 2017, 9:22 PM 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.

In my view, conducting a psychological campaign at an intensity that is known to be far beyond the ability of many people to withstand, is unethical.

On the other hand, I do teach my kids about advertising. They are quite skeptical about it.

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

#74

Post by tunap » Thu, Apr 20, 2017, 9:28 PM UTC

dboreham wrote: post #9

"Retail-as-Real-Estate" plays don't always work. e.g. Sears, KMart.

Losses are useful, too! McD's has been renting a lot in my town(85331) for 5+ years now, and yet to break ground. ~6 months ago the local "fish wrapper" ran a story on this very topic.

As an aside, back when oil was >$100/barrel Exxon/Mobile had numerous boarded up properties around Phoenix with For Sale/Lease signs that were neither for sale or lease, as the losses/write downs were valued to dilute the windfall profits they were raking in at that time(my source was an agent for CBRE).

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

#75

Post by gist » Thu, Apr 20, 2017, 9:29 PM UTC

This has been well know for a long time. However the fact is the only reason that McDonalds is able to collect rent (in the dollar amount that they do) is if their product and service, the franchise, is able to sell hamburgers to customers. As such the value of the real estate (if the franchise fails to operate) is nowhere near what it is with a profitable operating restaurant. While the locations are valuable if you have ever seen a vacant McDonalds, and who typically rents those, you will know that the rent received and royalties is nowhere near what it is with a McDonalds restaurant.

So I think it's a bit misleading and hyperbole to say 'how they really make money'. The only reason the can make that money is because of the product and the customer base that patronizes the McDonalds. So in the end it is because of the product. "How they really make their money" is because of that product.

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

#76

Post by stctgion » Thu, Apr 20, 2017, 9:29 PM UTC

linkregister wrote: post #65

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.

You might not want to visit a farm, processing plant, warehouse, grocery store, or restaurant. They all throw away enormous amounts of food. Throwing away a Big Mac because it got too cold is a rounding error in perspective. That said, we produce more food than we ever have. Is there a difference to starving people whether a grain of wheat went ungrown or was wasted? What was the author meant to do, walk the hamburge…

Microwave it like the rest of us

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

#77

Post by xapata » Thu, Apr 20, 2017, 9:32 PM UTC

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.

That business model is heavily influenced by negotiations with the soda company.

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

#78

Post by logfromblammo » Thu, Apr 20, 2017, 9:33 PM UTC

gjm11 wrote: post #54

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.

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

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 service temperature of their food to be deadly serious. Complaining to the management with cold food and receipt in hand would almost certainly generate an overly obsequious response sufficient to satisfy even the grumpiest of customers. If not, going to management above the restaurant would probably get everyone at the restaurant re-trained right quick.

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

#79

Post by robbrown451 » Thu, Apr 20, 2017, 9:36 PM UTC

Sure, but the burgers are a critical component of the whole picture.

It's almost like saying that grocery stores are not really in the grocery business, they are in the business of accepting cash and credit card payments. True, that's where they "make their money", but that business would dry up pretty quick if they didn't stock groceries.

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

#80

Post by betenoire » Thu, Apr 20, 2017, 9:41 PM UTC

linkregister wrote: post #65

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.

You might not want to visit a farm, processing plant, warehouse, grocery store, or restaurant. They all throw away enormous amounts of food. Throwing away a Big Mac because it got too cold is a rounding error in perspective. That said, we produce more food than we ever have. Is there a difference to starving people whether a grain of wheat went ungrown or was wasted? What was the author meant to do, walk the hamburge…

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