• protist@mander.xyzEnglish
    23·
    6 months ago

    So I’d be interested to know how the flailing commercial real estate market is affecting McDonald’s prices right now, given that McDonald’s is a real estate company.

    Former McDonald’s CFO, Harry J. Sonneborn, is even quoted as saying, “we are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us our rent.

    Instead of making money by selling supplies to franchisees or demanding huge royalties…the McDonald’s Corporation became the landlord to its franchisees.

    They bought the properties and then leased them out – at large markups. In addition to that regular income, the corporation would take a percentage of each shop’s gross sales.

    Today McDonald’s makes its money on real estate through two methods. Its real estate subsidiary will buy and sell hot properties while also collecting rents on each of its franchised locations.

      • meowMix2525@lemm.ee
        1·
        6 months ago

        Eh I kinda highly doubt it. It’s not like they ever charged lower prices out of the kindness of their hearts. They charge what they can get away with.

        They also make money by charging their franchisees rent, which is probably pretty stable. McDonald’s customers aren’t really making decisions based on real estate prices whether or not to give them money so the franchisees don’t have anything less to pay them with unless their costs are inflated elsewhere.