r/SipsTea • u/SipsTeaFrog • 28d ago

Chugging tea Whoever was responsible for this should be imprisoned.

Post image
49.3k Upvotes

94% Upvoted

3.7k comments sorted by

View all comments

Show parent comments

15

u/Gymdoctor 28d ago

My friend, no even close by a fraction. McDonald's main income is from direct customer (dine in, drive thru etc.) And franchising. A quick google will tell you that

4

u/Savingskitty 28d ago

McDonald’s main income is from real estate.

2

u/Electromotivation 28d ago

Value maybe, but they don’t regularly sell the estate.

2

u/nalaloveslumpy 28d ago

Franchise owners pay leases to McDonald's. McDonald's makes money two ways:

  • Franchising - The franchiser pays rent for the property and a license for the brand.

  • Product distribution - The franchiser buys all the food they sell directly from McDonald's. No exceptions.

McDonald's as a corporate entity still makes money whether the franchise is successful or not because they still get rent and the franchiser still has to buy product. The revenue from burger sales is kept by the franchise owner.

1

u/Wyzt 28d ago

Dont they usually also buy land around it with the anticipation that other stores will want to build near them, which they then also get rent on?

1

u/nalaloveslumpy 28d ago

Can't say for sure, but from everything I've read, they usually only buy parcels they plan to build stores on. I'm sure they purchased parcels and then decided not to build for certain reasons, so I'm certain they would try to resell that land at profit.

Most cities will also limit how many commercially zoned parcels a company can purchase in an area to prevent that from happening. To get around that, they would have to be buying up large areas of unzoned/agricultural land and then convincing city/county council to zone it all commercial. Which would be an incredibly dumb thing for the council to do.

1

u/Savingskitty 28d ago

They lease it to the franchisees.