Hi!
I’ve heard (maybe from “The Founder” movie) that McDonald’s is actually making money from lending lands to local McDonald’s business owners. But I’m not sure.
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Is (Was) it true? If so, is it STILL true?
Is the reality a little bit more “nuanced”?
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Thanks!
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McDonalds makes their money by selling food. If the food isn’t sold then they don’t make any money. That’s first and foremost.
The business model though is different from simply opening a restaurant and selling food. The company itself has to do a lot of work in keeping things going well – the food, the menu, the distribution, the marketing, etc.
An individual store though is owned by a franchisee who pays a lot of money to McDonald’s to run a McDonald’s restaurant, often on land owned by McDonald’s and pays rent to McDonald’s for the land in addition to the franchise fees. So McDonald’s makes money hand over fist from the franchises, AND sees appreciation in the land value, some of which is extremely prime real estate.
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