Question
What business is McDonalds in?
OK, Im only 16 so its not like I'm looking to make money or anything I just want to invest in my most precious asset which is my mind, I want to expand my financial intelligence. All right so this one rich dude told me that Mcdonalds is not in the hamburger business but in the real estate business because what they really want is the valuable piece of real estate under the store and that mcdonalds owns some of the most valuable street corners in the world, if some one would like to expand on this and make it clearer for me I would appreciate it.
4 weeks ago - 2 answers
Best Answer
Chosen by Asker
I recently watched a documentary of McDonald's on CNBC and contrary to what most people think, McDonald's moneymaker is real estate and not the fast food it sells. They make money via real estate in two ways: first, based on extensive research, they buy properties that they feel are in, or will be, prime locations. Also, they sell their under preforming properties, obviously typical things that real estate companies do. However, like most other franchisers, they charge a franchise fee to use the McDonald's name, which is currently about 8%. The franchisee pays this amount or 5% of their gross sales - whichever is higher. Don't quote me on the percentages but it's close. Research Franchise Realty Corp., McDonald's real estate subsidiary and this should give you more insight.
by Michael
3 weeks ago
Asker's Rating: 
Other Answers
It is true that Mcdonalds owns some valuable Real Estate. Not to contradict the rich dude but McDonalds is not in the Real Estate business. The land is only an asset - it is not an operational item. The operations of the business is selling fast food - that is where their cash flow is located. Without the cash flow McDonalds would not be able to support their Real Estate holdings (taxes, etc.).
by Joseph T- 4 weeks ago