@@riverdaletales8457 i'm sure they took many artistic licenses but they do explain why McDonald's went from being a standard fast food restaurant to a gobal chain and how real state was a huge part of it.
This whole thing blew my mind the way they’ve built this tight scheme of outsourcing their risks. If a location or the overall brand struggles, the franchisees take the hit and McDonalds walks off unscratched. The franchisee can go under and the location can just be passed on to the next franchisee willing to take its place and we can all forget that anything ever happened.
Truth bomb, they are not broken, they are being cleaned which can sometimes take hours. Its just easier to say broken because people accept that, saying its being cleaned and people will complain for weeks about " why don't you do that at another time" because there is never another time, they are always being used and you were the idiot during the down time.
McDonalds is legit a real estate juggernaut. My wife’s small town had one and a Burger King until BK closed. McDonalds immediately bought the BK property to both box out any competition moving in and to pick when and who gets it after.
I am the funniest TH-camr of all time I watched my latest video and laughed for 69 minutes straight I am extremely funny I am dangerously funny and I have two girlfriends who think I am extremely dangerously funny and they watch all of my videos thanks for listening dear rona
Our vision is to impact the public’s general health and health standards on a global scale by providing low cost processed, high sodium, sugar and saturated fat foods 24 hours a day
They also stipulate in their contracts how often the buildings need to be remodeled/renovated/rebuilt. It's a fascinating model that covers their bases at all turns
I think they’re royally fked by McDonald’s the profits are way less than if you open your own place, the bonus going to McDonald’s route is they give you all the equipment and train and maintain the stuff. So if you’re a lazy restaurant owner it’s perfect for you
@@kravez16 as someone who worked as a contractor for McDonalds its INSANE. You have to buy all your equipment down to the light fixtures from McDonalds, pay franchise fees, buy ingredients from McDonalds, and pay rent to mcdonalds. Often if something like equipment breaks down you have to hire a mcdonalds affiliated company equipment repair company and if a toilet clogs you have to hire the macdonalds property maintenance company to send a plumber. Those repair companies and maintenance companies in turn pay local sub contractors like electricians and plumbers to fix the problem. These middle men and suppliers charge insane markups so a $100 plumber costs $200-$300. These insane overhead costs are why a franchise pays slave wages and cant seem to afford a $0.50/hr pay raise. Corporate blames local cities economies and the franchisee but they're the ones squeezing the franchisee for every penny making it impossible to do anything besides hire slaves. I worked for those maintenance companies for awhile and sometimes they'd want to pay us less then our costs, it would cost me $50 in labor, $10 in gas, $20 in parts, $50 in taxes, and $20 in overhead and they'd sometimes say they would only pay us $150 and I'd laugh at them. One time they honestly wanted to pay me $200 when i would have to pay my electrician $100, the government $50, buy a $50 light fixture, burn $20 in gas and I'm already $20 in the hole without factoring in overhead or profits
@@arthas640 Thanks for the information that was very interesting, it seems like corporations are killing the world, it’s Modern day slavery and governments allow this to happen it’s a vicious cycle and it needs to come to an end one way or another.
I had that happen to me in real life. Living in the ghetto of Cincinnati there was a Mexican restaurant that opened up down the street. Most employees couldn't speak English and I would get a burrito and its made differently everytime- but they were good. So one day it closes up and I find out the owner is a drug dealer and just bought the business to launder his money. But he got arrested and closed the place. The sad part was their food was pretty good.
@@raymondkidwell7135 I’m almost 40, and it’s only just dawned on me how tanning shops and dessert parlours that are always empty continue to stay open.
This has to be the most impressive business model that is literally immune to anything. They own everything that appreciates in value , have full control of their franchises and on top of that zero exposure to any loses from any branch. Very impressive
And Ray Kroc hated Sonneborn so much because of his attitude that Fred Turner waited till AFTER Ray died before he dare hanging Harry's portrait at corporate HQ but there is no denying that Harry's real estate play is the only thing that saved McDonalds from financial failure.
@@jonmiguel exactly. Before Harry came up with the real estate idea McDonalds the corporation was barely making any money despite the fact that the majority of franchisees were raking it in. Ray Kroc respected Harry for his financial acumen but it was all about the hamburgers for Ray and if you didn’t get onboard with that you weren’t going to be in the company for very long. The book “Inside The Arches” tells the complete story, warts and all. I’ve read it a couple of dozen times. It is a fascinating story. Say what you want about McDonalds but it would have been amazing to be there during the early formative years.
@@jswaggart01 I would've wanted to be around when it was owned by the McDonald brothers. Ray received karma for screwing over the brothers by overtaking the business they started by having someone else run his business the way he didn't want it to be run
I still remember back in University our lecture in Management Accounting asked what McDonald's main source of income is and what type of business is it classified as.. no one got this right.. we were so confident he was wrong about until we pulled their Financial Statements
They're definitely right to not separate their real estate holdings. Each part of the business provides stability for the other. If the real estate side started to perform badly then they could let the leases start to expire and convert back to a more traditional model.
The company will always retain a small number of ‘company operated units’ as they use these as ‘model’ units for franchisees and they will often take over poorly run franchise stores, invest and ‘fix’ the store, then sell it to a preferred operator.
Yep , a franchise 'owner' seems to have to pay $1mil upfront simply to become the equivalent of a middle manager. I guess it beats 4 years + of school? lol
Rent is how you maintain perpetual wealth. You make money without trading any assets, and once you become large enough people can't survive without using your assets. Think of monarchy, land owners during the serf system era. When you begin to realise that the banks rent you your own money(ATM/card transaction charges, charges on drawing cash), the government rents you the right to trade(taxes). You have to pay someone just to do anything. That's how they keep you down and themselves in power.
Yes, rent is a hangover from feudalism and has been around since ancient times (or even before). It’s been integrated with capitalism to give a return on the ownership of assets, which tbf is counterproductive to capitalism as more people owning more stuff should mean that more people can do more productive things. One of the most infuriating problems in our system is that lots of good ideas are never made in reality because people don’t have the assets to do it. It wasn’t that long ago that feudalism was the norm. Instead of appointing hereditary lords to manage land, now we have corporations. The CEO is the monarch, the executives and upper management are the lords, middle management are the knights, and the workers are the serfs. Over the last 10 years, our society has shifted further and further to this model of modern feudalism / rent serfdom.
it's just semantics, franchisees are paying their high rent because the burgers sell well, they generate value with their brand, not their real estate dealings, they collect the value through rent that's all. Choosing a good location for a restaurant is still restaurant related business.
Right, and the fact that investors couldn't understand this - to the point of asking McDonalds to divest themselves of their land - is a perfect demonstration as to why the investor class are the true Randian moochers. Seriously, you're going to spin off the land-ownership business into a REIT and then... exactly how is McREIT supposed to get above-market rents out of McBurgers franchisees now that the brand is gone? Alternatively, how is McBurgers supposed to remain a profitably scaled business when McREIT owns the land that makes them profitable? Both of these parts of the business funnel into one another. "Hey, what if we took the two valuable parts of this one really big business and made them fight one another to prove their mettle? This totally wouldn't wind up turning McDonalds into Sears!"
@@SuperSmashDolls That is a damn fine analogy to Sears and how it failed. That's exactly what Eddie Lampert did, by spinning off Sears real estate mostly to his REIT. McD's was wise not to fall for a trap like that.
The owners of the McDonalds in my small town is one of the city council members and she actually voted NO when Starbucks was wanting to build a restaurant across the street.
It’s always about the real estate. Oil companies, fast food, any retail franchise where the land is owned by the corporation is the first and biggest asset on the sheet.
Why do corporations want people to work in the office again? Because if Noone comes into the downtown to spend money because they don't have to work downtown then the property value either reduces or doesn't grow as fast
They loose tons of money having to call “The guy” to come fix the ice cream machines, because they aren’t able to without voiding their contract. The little things you don’t know about McDonalds, actually is a huge deal.
@I Don’t Check In Notification because the people that manage the stores are required to hire mcdonalds' contracted repairmen which can boost the price up to $300 more than a local one. replacing parts you have to buy from mcdonald's as well. it's like having an apartment where the landlord only lets you use repairmen that they're contracted with for a higher price through them yk
Bro McD is in bed with Taylor. Both parasitic af to the customers. If you think a product every other store uses without fail ( DQ etc ) but cant fathom how McD ice cream machines perpetually broken, the answer is $$$$$$$$$$$$$$$$$$
The ice cream machines aren’t always broken, they just need to clean it. It’s easier to say it’s broken to the customers rather then them saying they’re cleaning it.
Never seen a defect ice cream (Taylor or Carpigiani) machine in the Netherlands... Or elsewhere in Europe. I worked there for 9,5 years. We cleaned the machines every night. I think McDonald's in the Netherlands is way better and hygienic than in the US. Only small snackbars have their ice cream machines out of order every now and then. At Mcdonald's is too much of a cash cow to let it be "broken".
I used to work at LAX 13 years ago or so and one of my co-workers was also a McDonald's manager during the mornings. One day told me about some big changes coming like the invention of the McDouble which is a double cheese burger with one less cheese slice, only giving ketchup and napkins if the customer asks for it (and only a certain amount for each order), the limiting of creamers and sugars they can give out with coffee. All these seem smalls, but these changes were going to save the company millions lol.
That’s correct but there’s another additional way on how they make their money. If you open a McDonald’s you can only use their equipment that they own and you have to lease it. McDonald’s owns the company that manufactures and leases all their cooking equipment. And that alone totals to about half a million per year per store for McDonald’s.
So mcdonald's earn more from forcing the frenachies to rent it from them and not allowing them to choose a place on their own and that's where they earn most of their money beyond the other fees they earn from the frenchies, did I understand it correctly?
I remember +10 years ago reading a story where Ray Kroc talked with undergraduates (or something like that), and he asked if they knew what McDonalds sell, the students would usually laugh thinking it's they sell hamburguers - but the story proceeds he would tell them their real business is in real state, and not selling lunches.
@Lee My word, but that's revealing. Thank you. I can see the problem there. Worrying because it's often said that today's American problems are likely to be UK problems within a year, courtesy of the multinationals. Thing is - whatever the food sources and prices - people themselves continue to be the real worry. For instance, I had my two grandchildren (both in early teens) visit a few weeks ago. Their Dad (now estranged from his wife and sharing the visit) told me they liked burgers. Accordingly, I served them a lunch of home-cooked burgers (butcher-sourced prime beef in artisan bread) along with fresh-cooked organic vegetables. The entire course was pushed away. Ten minutes later, they were eating freezer-to-microwave supermarket burgers of worryingly indeterminate ingredients. Which apparently are 'much better.' I've never been that wise an eater myself - my doctor often despairs. But I do cook/prepare 90% of what I eat from fresh ingredients. What can we possibly do about new generations with not even a basic understanding of minimally healthy eating?
0:34 I don't know about the US but here I wouldn't call McDonald's a cheaper option. When I stop being lazy and start cooking for a week for myself, simple thinks like noodles and rice, I pay around 25€ a week. McDonalds normal McMenu costs me 7€ i think. Eating 3 evenings in McDonalds would take my budget for the entire week and still leave me hungry. That means 4 days of starving and no breakfast xD Fast food restaurants aren't cheap, they are for lazy people, home cooking will always be cheaper, no Burger King menu can compare itself with 60 cents Aldi noodles and 1.20€ ketchup xD
It's always cheaper to cook at home, but most people don't have the time or energy to do it everyday, nor the cooking skills to make varied and interesting foods.
They also make big money by purposely hiring employees with less than 25 hrs a week and just sending in more people to cover shifts people already working would be willing to continue working so they don’t ever get close to paying overtime or giving employees benefits like health insurance or paid time off
When government makes things mandatory, this is a predictable and expected outcome. McDonald's acting like that is a symptom of a problem, not the problem itself
All this aside, having not been to McDonald's for some time, and longing for just an order of fries, I went through the drive-through, ordered a large order of fries with two salt packets, and nothing more. It was $3.51 and the thing was a little over half full. Never again. Cost on that item is surely less than 50 cents, overhead included.
Dude I just said the same thing. I hadn't been in quite some time and I ordered two fillet o fish sandwiches for $6 and an order of fries. My bill was over $9 I couldn't believe how much they charge for fries.
Interceptor810, or better Red Pill should be saying that, people who identify themselves as Woke are usually anything but that. People who identify themselves as Red Pilled seem to be really like Neo in The Matrix after he's been unplugged and stripped of his delusions. People who are Woke are typically left-wingers who live in a fantasy-land of waiting for a socialist/communist utopia, the same kinds that have failed and left utter devastation and millions of people dead over the last the 100 years. People who identify as Red-Pilled generally support systems that have brought billions of people out of poverty over the last 1/2 century or so.
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Funny Thing Is, Nobody Could Catch Up With The Rate At Which McDonald's Going. Besides That, They Expand Their Business Mindset Through Franchising, Which Is Mentioned In The Video That Anyone Can Start One. "Find the locations McDonald's desires, buy it before they do" seems like a daunting task... Unless you have access to the mindset of every single person on Earth, which is wired through neuro-implants and capable of using that information to turn it into profit. Oh wait, Neuralink does that. So, you're actually right about that one. S T O N K S📈📈📈
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@@Ka_Gg - Yeah I go once in a blue moon but I had to cut back dramatically because of it. And I’m sure others have also. Nobody in their right mind would ever expect the machine to be broken for years. Those truths are just now coming out.
Interesting how these fast food chains offer very cheap food, whereas in my country, in eastern europe, the same fast food chains are considered a quite expensive option. Here you can eat at an actual restaurant for about the same as you would pay for a meal at mcdonalds...
That's because in most European countries, there are employment laws that doesn't allow the corporates to pay shit wages and also, the ingredients need to be of a standard quality, not the chemical cocktail that they serve in other countries. Thus, running the business in a legit and healthy way requires the prices to be jacked up. That's why the Europeans pay with cash while the Americans pay with health, but alas, guess who has free healthcare?
@@joshmcgregor4839 I get that. I don't know what a double cheeseburger costs in the UK now, but here's it's equivalent to £2.20. Which may still sound cheap, but imagine you're working a decent full-time job for an averagely sized salary of £430 a month net... And imagine that minimum wage is £0.60 per hour... It's not McDoanlds' fault, but it just can't be "cheap" food here...
@@Gworan In india a MacD vegetarian burger costs roughly £1.2 and an average person needs about two burgers.At the same price you can get freshly prepared burgers and if homemade with retail ingredients its £0.5.They have started to lose against the competition.
The person who franchised McDonald’s stole the idea from Dan and Ivan McDonald and franchised it. He then bought McDonald’s and made money off of assets
@@drmg735 No, he saw a value in a way to expand the business. It was not just about selling burgers. Then someone else worked out the franchise concept and they ran with it. Now they recognise it as what it always was. Fast food funded, high guaranteed rent, real estate with lots of fall back clauses to ensure whatever happens to the economy McHQ gets paid.
Just about every busines makes a ton of money. There is a risk you can go out of business but its rare. The model is the same: work your employees to death. Pay them as little as possible. Get rich off their labor. The biggest risk at these places is when employees figure out the game and steal from them. Usually its a manager that steals money. Then the owner can lose a lot. We live in one of the richest points in human history yet in the United States welfare pays better than a full time job. you are supposed to work a full time job and live homeless with the wages they pay people. And the weirdest thing- even if you do twice the work as others (thus saving the company money) they usually don't want to pay you anything more- so it just pays to be stupid and lazy at these places which makes the service bad (main reason I cut back my fast food and restaurant intake- over priced and bad service, lowest quality cheapest ingredients they can find always used etc.). Then when they ship the job to China or replace you with a machine they pass very little of the savings to the consumer. They just make even more profit. I realized the scam but I never had enough money to start my own business or get out of the wage slavery. It's so much better to do an employee owned business with profit sharing- the business is ran better- employees actually care about the business instead of being lazy and stealing, and its more fair on everyone pay people what they deserve.
@@raymondkidwell7135 That is BS. 7 out of 10 businesses fail within 10 years and of the remainder 7 out of 10 of them fail in the next 10. Being in business long term and profitable is hard.
@@billgreen576 That is a good point. Even a perfectly ran business can fail due to factors out of your control (the economy takes a down swing or new competition) but most of the business failure is because anybody can start a business. Any idiot. The figures are inflated due to those people who just dabble in it. Like some mom and pop trying to start a business and don't know what they are getting into. Even the pros have businesses that fail- but this is calculated risk- mitigated risk because the profits are so high when it does succeed. I have not met many people that failed at business. An example. My uncle worked for an appliance repair company for years making $12 an hour or something like that, plus use of a company van. He came into some money and just started his own appliance repair business from his house. His income jumped to around $60 an hour. There were days when he made $1,000 in a day compared to the $100 he was getting paid by the company he worked for. He just cut out the middle man. He had some problems with the IRS because he didn't know about collecting sales tax and such. Then he died and the business closed up. Someone could have just continued the business but it was a one man operation. I guess on paper the business went bankrupt after 15 years or something. His son started his own business doing the same thing and made really good money but him and his wife wouldn't even answer the phone when it was ringing off the hook with customers and other bad decisions he eventually closed it and got a regular job and just do side work repairing appliances. On paper his business went under but it was actually very profitable for him as a whole. I also talked to people who own restaurants and other similar businesses. The main thing that causes them to go under is a manager that steals from them rather than the business not being profitable. It's all a big game of exploiting people in most cases.
"During recessions for cheap food" - meanwhile, as a human being which only eats McDonalds about once per year: This is fkn expensive! Mc nuggets + burger + pommes = more expensive than every other average food
I don't know why he calls them 'cheap'. A big Mac menu costs about €7.- For that money you could get two packs of noodles, 1.5L cola bottle and a bag of chips.
@@flopsinator5817 i just looked it up.. our menus actually start at 9,29€. And this is hella expensive for that garbage And now lets say i dont want a menu but 9 mcnuggets, pommes large and a burger + coca cola it is more than 18€. Just freakin imagine paying 18€ for garbage. You could literally visit a nice restaurant or buy 3 good pizzas.
When I worked at McDonald's I was astonished at how much money people spent to eat there. I wondered why they wouldn't just spend the same money to eat at a real restaurant. But if you only eat the "value" items you can fill up on relatively little, as far as fast food goes.
@Raj Nair That's because Indians on average earn less than their European counterparts. No one in India would buy a bottle of coke if it costs the equivalent of €1.50, so they lower the price to compensate for that.
"high standards to become a franchisee" In my country, like a lot of the training methods here, It all looks really good on paper. But in reality it's all fast-tracked. I'm sure the stores that get media coverage are watching what they do but I have worked in 5 seperate stores (including 1 overseas) and they just do not have the time to commit to the expensive training head office expects. I've actually seen a franchisee get fast-tracked trained and it involved spending an entire 3 months at every station as a crew member yet I don't remember ever seeing him come out of the office unless shit was about to hit the fan. going back to training as a whole though, there is entirely too much pressure to be under a certain labour cost every week for them to really get the training right, this is why your local maccas is rubbish! But that's the reality nobody wants to accept, if you want better service it's going to raise the price.
Would like to see 'Light' versions of the massive fastfood chains, which focus on: Lower fat, lower sugar and higher fiber content in their food. I think that would work really good in many locations across the world.
Two reasons why that’s not going to happen: 1. Simply put, this food is more addictive. People like how it tastes, these businesses don’t care about health, they care about the sheer profit a location can earn. High sugar gets kids and people who are easily addicted in the door, high fat gets those with severe eating addictions to walk in the door and become highly profitable long term customers (in the world of commerce, people who make large long term investments like this are known as “whales”). Low fiber is simply cheaper. 2. It’s cheaper, most normal people who buy fast food buy it for two reasons: it’s cheap and it’s quick. For people in very low income locations, their only options are those that are incredibly cheap, they don’t buy better food because they can’t GET better food, they need it for everything else.
I was talking to an older guy and we thought of something simple. It wasn't really the healthiest, but it was designed for working people that are either on lunch or eating dinner. Just a simple tray. Only 1 meat option with a few vegetable options and simple drink each day. Example on monday it may be meatloaf, potatoes, corn and a drink. Next day change up the meat and still have 2 other vegetables. Wouldn't have to be a big operation since you have minimal items. Charge like $5-$8. I think you'd have a lot of blue collar workers that would enjoy it. Manual labor type people. But I could be wrong. It could flop.
Finally someone one on TH-cam decided to make a video on this. Thank you! I knew about this a long time as a young bookworm having an interest in company histories at the time. So I read about the story of Mcdonald's at my local library. This was during the days of dial up internet😅 As I recall, It was actually the idea of one of the members of Ray Kroc's executive circle to turn Mcdonalds into a real estate play to make it more appealing to investors at time and obviously it worked
Ok the part about the location makes so much sense. Every McDonald’s I’ve ever seen is on a busy road by traffic lights😂😂. Also a company in my town makes all their garbage cans/tables and stuff
They also really go all out when it comes to some of their restaurants worldwide. A DC3 plane, a Georgian-style McMansion, a UFO, a storefront-sized Happy Meal, Art Deco, a marble and mosaic Roman one to name a few. They certainly try to appeal to the locals and tourists
In lots of cases they are sort of forced into doing this. In my city, Bruges, Belgium, the McDonald's in the city center is in a 500 year old house. This is because all houses in the city center are this old, what else are they going to do if they want a McDonald's in the city center?
2:45 “... it knows the precise ingredients of a successful location.” Two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun?
Approved supplier, lol! My uncle owns a McDonalds in eastern Europe and he's used the "approved supplier" probably once. He saves money by buying local beef and vegetables from his towns farmers market.
I understood all that when I saw the movie The Founder and thought Ray Kroc is a genius, he understood what business is via renting properties to install mcdo's
What business am I in?" Ray asked, once the group had all their beers in hand."Everyone laughed," said Keith. "Most of the MBA students thought Ray was just fooling around."No one answered, so Ray asked the question again. "What business do you think I'm in?"The students laughed again, and finally one brave soul yelled out, "Ray, who in the world does not know that you're in the hamburger business." Ray chuckled. "That is what I thought you would say." He paused and then quickly said, 'ladies and gentlemen, I'm not in the hamburger business. My business is real estate." Keith said that Ray spent a good amount of time explaining his viewpoint.
@@larryroyovitz7829 Yeah, that's why the obesity epidemic started _after_ the fast food revolution. Nobody forces you to buy fast food, cigarettes or semi-automatic weapons. They're just easily available and quick.
@@nimrodery So? Its much easier to sky dive now than before we could fly. People die sky diving, but no one is blaming planes or sky diving providers. People should take personal responsibility, but everyone is looking to blame someone/something else for their failures. It's just excuses, I don't care how "easy" it is to aquire/eat these things that are bad for us. Jesus...does everyone need a babysitter?
@@larryroyovitz7829 Remind me how many people die skydiving as opposed to obesity. And then show me how the skydiving equipment and training industry took advantage of people by not warning them of any of the dangers of skydiving, and trained generations of kids to yell at their parents to take them skydiving.
@@nimrodery It shouldn't matter how many people die. Not warning people of the danger...are you saying you and many others are too stupid to realize fast food is bad for you? Wow. Take some personal responsibility for once and quite blaming others for your ineptitudes.
Can you do a video on Hospitals and Certificate of Need Laws (and how these regulations impact Competition between Hospitals and Price of Healthcare Services)?
@@sebastiank686 In some states in America. It'll cost between $1 to $3 for some burgers. www.mcdonalds.com/us/en-us/full-menu/123dollarmenu.html McDonalds is well known for its "dollar menu" Like in my country Canada you won't find a burger for under $2. However if you look at the cost of some beef burgers some are only $2.50 or $3 costfindercanada.com/mcdonalds-prices-in-canada/
yes. It cost a lot and you get tiny portion that does not fill you. if you go to noodle restaurant etc you pay less and its too much for one person to eat
This video surprises me as it is far less expensive to buy fresh food vs. going out to eat, including fast food. Plus, with regards to the fast food list, Subway and Wendy's are very expensive. Not surprising though that McD's does make a ton of money as they are cheap in both cost and quality.
I think one thing that this video fails to acknowledge as well is that McDonalds makes a lot of revenue, if not more revenue, from wholesaling their food products. Each franchise locations are locked to only allow to serve McDonalds food products, cups, boxes, napkins, and everything mcdonalds. Any Franchisees are not allowed to use different types of napkins, or cups or anything and cannot add to the food menu their own types of food. They have to buy and only use all of those food products at what is considered "wholesale" price from Mcdonalds HQ. Only company owned locations can experiment and add items to food menu as experiment for other franchise locations. It's not wrong, that's just how they are doing it. Revenue from that alone is more than real estate rent costs.
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"What's your job?"
"Oh, I manage sales at a billion-dollar international real estate company."
Cashier at a mcdonalds, right
@@norie361 But the Cashier doesn't work for McDonalds. He works for the franchising company.
@@subjord sometimes doesn't even work for the franchisee but for a 3rd party that "rents" employees to MickeyDs or franchisees
I should've said that when I worked at McDonald :)
@@subjord Some stores are still owned by McDonald's, not franchised, so this still works :)
The movie The Founder is really great at explaining this
Is it historically accurate though?¿?
@@riverdaletales8457 no but the movie is pretty sick
@@riverdaletales8457 i'm sure they took many artistic licenses but they do explain why McDonald's went from being a standard fast food restaurant to a gobal chain and how real state was a huge part of it.
video is 9 min lomg tho. :)
@@igreeuropa oh yeah totally
This whole thing blew my mind the way they’ve built this tight scheme of outsourcing their risks. If a location or the overall brand struggles, the franchisees take the hit and McDonalds walks off unscratched. The franchisee can go under and the location can just be passed on to the next franchisee willing to take its place and we can all forget that anything ever happened.
They save a ton of money by not fixing their Ice-cream machines.
Lmao
Yeah. McFlurry machines are always broken.
I can confirm this is true in india
Truth bomb, they are not broken, they are being cleaned which can sometimes take hours. Its just easier to say broken because people accept that, saying its being cleaned and people will complain for weeks about " why don't you do that at another time" because there is never another time, they are always being used and you were the idiot during the down time.
You are right
Mcdonald's: give me rent
Owner: you'll get ur rent when you fix this damn ice cream machine
Break ice cream machine.
That wasn’t cool.
Owner: suicides
@@mackielunkey2205 yea because its broken if it was fixed it would be cool lol
Aaaaaaaand there goes my coffee all over my laptop!!!
McDonalds is legit a real estate juggernaut. My wife’s small town had one and a Burger King until BK closed. McDonalds immediately bought the BK property to both box out any competition moving in and to pick when and who gets it after.
They raise food prices and pay employees the bare minimum. They shouldn’t be in business for how they treat employees
So dont go work there?
@@billnythehighestguy690 Workers choose to work in such conditions
@@musclee-mac8768 ignorant comment
@@musclee-mac8768 the fuck you havent worked a day in your life
Burger is their side business, charging rent is their cash cow
I am the funniest TH-camr of all time I watched my latest video and laughed for 69 minutes straight I am extremely funny I am dangerously funny and I have two girlfriends who think I am extremely dangerously funny and they watch all of my videos thanks for listening dear rona
@Detective Orion Fernandes he said girlfriends not wives
@@AxxLAfriku Better hope those two girlfriends never meet.
@@AxxLAfriku this is satire right?
Our vision is to impact the public’s general health and health standards on a global scale by providing low cost processed, high sodium, sugar and saturated fat foods 24 hours a day
They also stipulate in their contracts how often the buildings need to be remodeled/renovated/rebuilt. It's a fascinating model that covers their bases at all turns
"McDonald's earns money with real estate, not burgers."
"And how do franchisees earn money to pay the rent?"
"By selling burgers."
I think they’re royally fked by McDonald’s the profits are way less than if you open your own place, the bonus going to McDonald’s route is they give you all the equipment and train and maintain the stuff. So if you’re a lazy restaurant owner it’s perfect for you
@@kravez16 as someone who worked as a contractor for McDonalds its INSANE. You have to buy all your equipment down to the light fixtures from McDonalds, pay franchise fees, buy ingredients from McDonalds, and pay rent to mcdonalds. Often if something like equipment breaks down you have to hire a mcdonalds affiliated company equipment repair company and if a toilet clogs you have to hire the macdonalds property maintenance company to send a plumber. Those repair companies and maintenance companies in turn pay local sub contractors like electricians and plumbers to fix the problem. These middle men and suppliers charge insane markups so a $100 plumber costs $200-$300. These insane overhead costs are why a franchise pays slave wages and cant seem to afford a $0.50/hr pay raise. Corporate blames local cities economies and the franchisee but they're the ones squeezing the franchisee for every penny making it impossible to do anything besides hire slaves. I worked for those maintenance companies for awhile and sometimes they'd want to pay us less then our costs, it would cost me $50 in labor, $10 in gas, $20 in parts, $50 in taxes, and $20 in overhead and they'd sometimes say they would only pay us $150 and I'd laugh at them. One time they honestly wanted to pay me $200 when i would have to pay my electrician $100, the government $50, buy a $50 light fixture, burn $20 in gas and I'm already $20 in the hole without factoring in overhead or profits
@@arthas640 Thanks for the information that was very interesting, it seems like corporations are killing the world, it’s Modern day slavery and governments allow this to happen it’s a vicious cycle and it needs to come to an end one way or another.
They actually make their largest profit by selling soda.
@@er7586 true. They turn 25 ounces of ice and 5 ounces of soda water and a drop of syrup into $1 every 5 seconds
next: how los pollos hermanos really makes money
Crystal meth
I had that happen to me in real life. Living in the ghetto of Cincinnati there was a Mexican restaurant that opened up down the street. Most employees couldn't speak English and I would get a burrito and its made differently everytime- but they were good. So one day it closes up and I find out the owner is a drug dealer and just bought the business to launder his money. But he got arrested and closed the place. The sad part was their food was pretty good.
@@raymondkidwell7135 must be lalo's cooking
😂😂😂
@@raymondkidwell7135 I’m almost 40, and it’s only just dawned on me how tanning shops and dessert parlours that are always empty continue to stay open.
Everybody: "McDonald's is a Fast Food Restaurant"
Intellectuals: "McDonald's is an International Real Estate Company"
Cringe
@@PopcornColonelx yeah, but most people making jokes on youtube for likes are usually not that funny anyways.
@@PopcornColonelx Humor
Then why doesn't every real estate companies sell hamburger like McDonald's does?
@@cringemoji9127 The joke was alright dude. This isn't a Ricky Gervais Netflix special it's a TH-cam comment section
This has to be the most impressive business model that is literally immune to anything. They own everything that appreciates in value , have full control of their franchises and on top of that zero exposure to any loses from any branch. Very impressive
Don’t forget the sickening effect they have on labor, truly amazing capitalists.
Can we say that they are hedged?
Don’t forget about all the Charity work Ronald does to get tax breaks…I mean the Ronald McDonald “orphanages”….
“You’re not in the burger business, you’re in the real estate business.”
~Harry Sonneborn
I just watched that on Netflix. Hence why I'm watching this. (Great film by the way)
And Ray Kroc hated Sonneborn so much because of his attitude that Fred Turner waited till AFTER Ray died before he dare hanging Harry's portrait at corporate HQ but there is no denying that Harry's real estate play is the only thing that saved McDonalds from financial failure.
@@jonmiguel exactly. Before Harry came up with the real estate idea McDonalds the corporation was barely making any money despite the fact that the majority of franchisees were raking it in. Ray Kroc respected Harry for his financial acumen but it was all about the hamburgers for Ray and if you didn’t get onboard with that you weren’t going to be in the company for very long. The book “Inside The Arches” tells the complete story, warts and all. I’ve read it a couple of dozen times. It is a fascinating story.
Say what you want about McDonalds but it would have been amazing to be there during the early formative years.
@@jswaggart01 I would've wanted to be around when it was owned by the McDonald brothers. Ray received karma for screwing over the brothers by overtaking the business they started by having someone else run his business the way he didn't want it to be run
@@djtrankilo231 please explain...
I still remember back in University our lecture in Management Accounting asked what McDonald's main source of income is and what type of business is it classified as.. no one got this right.. we were so confident he was wrong about until we pulled their Financial Statements
They're definitely right to not separate their real estate holdings. Each part of the business provides stability for the other. If the real estate side started to perform badly then they could let the leases start to expire and convert back to a more traditional model.
The company will always retain a small number of ‘company operated units’ as they use these as ‘model’ units for franchisees and they will often take over poorly run franchise stores, invest and ‘fix’ the store, then sell it to a preferred operator.
They own everything that appreciates in value ! Their franchises own everything that wears out! Pretty good deal!
And provide Mc with guaranteed passive income at low risk.
Yep , a franchise 'owner' seems to have to pay $1mil upfront simply to become the equivalent of a middle manager. I guess it beats 4 years + of school? lol
For who exactly? Who is dumb enough to buy these franchises when there are plenty of better options?
@@UdheihJdduhdid people who are dumb enough? lol
@@UdheihJdduhdid Ignorant people
Rent is how you maintain perpetual wealth. You make money without trading any assets, and once you become large enough people can't survive without using your assets. Think of monarchy, land owners during the serf system era.
When you begin to realise that the banks rent you your own money(ATM/card transaction charges, charges on drawing cash), the government rents you the right to trade(taxes). You have to pay someone just to do anything. That's how they keep you down and themselves in power.
Yes, rent is a hangover from feudalism and has been around since ancient times (or even before). It’s been integrated with capitalism to give a return on the ownership of assets, which tbf is counterproductive to capitalism as more people owning more stuff should mean that more people can do more productive things. One of the most infuriating problems in our system is that lots of good ideas are never made in reality because people don’t have the assets to do it.
It wasn’t that long ago that feudalism was the norm. Instead of appointing hereditary lords to manage land, now we have corporations. The CEO is the monarch, the executives and upper management are the lords, middle management are the knights, and the workers are the serfs. Over the last 10 years, our society has shifted further and further to this model of modern feudalism / rent serfdom.
But anyone can buy MCD stock and take part in the income. Do you?
it's just semantics, franchisees are paying their high rent because the burgers sell well, they generate value with their brand, not their real estate dealings, they collect the value through rent that's all. Choosing a good location for a restaurant is still restaurant related business.
Right, and the fact that investors couldn't understand this - to the point of asking McDonalds to divest themselves of their land - is a perfect demonstration as to why the investor class are the true Randian moochers.
Seriously, you're going to spin off the land-ownership business into a REIT and then... exactly how is McREIT supposed to get above-market rents out of McBurgers franchisees now that the brand is gone? Alternatively, how is McBurgers supposed to remain a profitably scaled business when McREIT owns the land that makes them profitable? Both of these parts of the business funnel into one another.
"Hey, what if we took the two valuable parts of this one really big business and made them fight one another to prove their mettle? This totally wouldn't wind up turning McDonalds into Sears!"
@@SuperSmashDolls What if the franchisee owned their own building?
@@SuperSmashDolls That is a damn fine analogy to Sears and how it failed. That's exactly what Eddie Lampert did, by spinning off Sears real estate mostly to his REIT. McD's was wise not to fall for a trap like that.
@@SuperSmashDolls Sears was dead long before the real estate was sold.
@@bootmii98 They don’t own the land. So they are paying rent on a building they construct
The owners of the McDonalds in my small town is one of the city council members and she actually voted NO when Starbucks was wanting to build a restaurant across the street.
I hate this
ROFL.
Isn't that the definition of a conflict of interest?
It’s always about the real estate. Oil companies, fast food, any retail franchise where the land is owned by the corporation is the first and biggest asset on the sheet.
Even in medieval times, land was the most valuable thing you could own. That hasn't changed even in the 21st century.
Why do corporations want people to work in the office again?
Because if Noone comes into the downtown to spend money because they don't have to work downtown then the property value either reduces or doesn't grow as fast
Interesting.
tay
Are you staying dry or feeling the pain?
His info plzz 🙏🙏
@@arthurfelix8112 His availability is on WhatsApp
@@arthurfelix8112 + 1 7 0 2 6 7 4 8 0 6 5
They loose tons of money having to call “The guy” to come fix the ice cream machines, because they aren’t able to without voiding their contract. The little things you don’t know about McDonalds, actually is a huge deal.
@I Don’t Check In Notification because the people that manage the stores are required to hire mcdonalds' contracted repairmen which can boost the price up to $300 more than a local one. replacing parts you have to buy from mcdonald's as well. it's like having an apartment where the landlord only lets you use repairmen that they're contracted with for a higher price through them yk
Bro McD is in bed with Taylor. Both parasitic af to the customers.
If you think a product every other store uses without fail ( DQ etc ) but cant fathom how McD ice cream machines perpetually broken, the answer is $$$$$$$$$$$$$$$$$$
The guy is not gentle either. He doesn't use vaseline, he just sticks the owner with his big bill.
The ice cream machines aren’t always broken, they just need to clean it. It’s easier to say it’s broken to the customers rather then them saying they’re cleaning it.
Never seen a defect ice cream (Taylor or Carpigiani) machine in the Netherlands... Or elsewhere in Europe. I worked there for 9,5 years. We cleaned the machines every night. I think McDonald's in the Netherlands is way better and hygienic than in the US. Only small snackbars have their ice cream machines out of order every now and then. At Mcdonald's is too much of a cash cow to let it be "broken".
I used to work at LAX 13 years ago or so and one of my co-workers was also a McDonald's manager during the mornings. One day told me about some big changes coming like the invention of the McDouble which is a double cheese burger with one less cheese slice, only giving ketchup and napkins if the customer asks for it (and only a certain amount for each order), the limiting of creamers and sugars they can give out with coffee. All these seem smalls, but these changes were going to save the company millions lol.
So this is why McDonalds is given a dedicated left turning lane at a humungous intersection in my town...
It's always at an intersection 😂
You own everything that costs money and they own everything that makes money.
Bingo
so basically, i pay for them to make money and they give me a share of it
@@adudeontheinterweb6571 That's what investing is lol
@@robert1200 no, investing is when beep boop computer go brr and then you are kajillionaire
Like uber
"How mcdonalds makes money"
*me with a 20 piece nugget large fry and mcdouble* : wow
Technically, since the rent is paid from burger money, they do still earn money from burgers.
Indirectly but it is a real estate business restaurant is their second business
Burgers ensure that they always have tenants
@SerfNinja "ice cream"
"I can't take this rent from you... It's not right. It's... it's Burger Money! 😨🍔"
assuming the location succeeds yes, but that is no guarantee
3:30 "To-do: Break ice-cream machine" had me rolling XD
McNormie Deluxe
Worth watching the video by itself.😂😂
haha i missed that .. i f** hated those machines. 15 years later I cant believe they still use them
They literally make money from breaking their ice cream machines. There's a video by TH-camr Johnny Harris on this
That’s correct but there’s another additional way on how they make their money. If you open a McDonald’s you can only use their equipment that they own and you have to lease it. McDonald’s owns the company that manufactures and leases all their cooking equipment. And that alone totals to about half a million per year per store for McDonald’s.
Not mentioned, Ray Kroc who thought up this idea of real estate not burgers for profit back in the 1950's.
It was Harry J. Sonneborn that came up with the real estate model and proposed it to Kroc.
So mcdonald's earn more from forcing the frenachies to rent it from them and not allowing them to choose a place on their own and that's where they earn most of their money beyond the other fees they earn from the frenchies, did I understand it correctly?
@@disrael2101 yeah
@@leonkernan This guy knows his burgers and real estate
I remember +10 years ago reading a story where Ray Kroc talked with undergraduates (or something like that), and he asked if they knew what McDonalds sell, the students would usually laugh thinking it's they sell hamburguers - but the story proceeds he would tell them their real business is in real state, and not selling lunches.
Okay so no one noticed the wittiest pun at 3:27?😂😂 ofc ice creams machines have to be broken💀
Yeah, but now McDonald’s is just as expensive as a healthier meal…
Was never cheaper to eat out
@@Tre16 It is in a lot of countries
@@Tre16 American fast food is waaay cheaper than healthier food. It's the opposite in Africa because that's where farming thrives I believe.
@Lee
My word, but that's revealing. Thank you. I can see the problem there. Worrying because it's often said that today's American problems are likely to be UK problems within a year, courtesy of the multinationals.
Thing is - whatever the food sources and prices - people themselves continue to be the real worry.
For instance, I had my two grandchildren (both in early teens) visit a few weeks ago. Their Dad (now estranged from his wife and sharing the visit) told me they liked burgers.
Accordingly, I served them a lunch of home-cooked burgers (butcher-sourced prime beef in artisan bread) along with fresh-cooked organic vegetables.
The entire course was pushed away. Ten minutes later, they were eating freezer-to-microwave supermarket burgers of worryingly indeterminate ingredients. Which apparently are 'much better.'
I've never been that wise an eater myself - my doctor often despairs. But I do cook/prepare 90% of what I eat from fresh ingredients.
What can we possibly do about new generations with not even a basic understanding of minimally healthy eating?
@@MrMcCawber I’m sorry to hear that, that’s such a shame. I would’ve happily eaten those burgers and veggies you made. Kids these days..
"To Do - Break ICE CREAM Machine" Ok.
0:34
I don't know about the US but here I wouldn't call McDonald's a cheaper option. When I stop being lazy and start cooking for a week for myself, simple thinks like noodles and rice, I pay around 25€ a week. McDonalds normal McMenu costs me 7€ i think. Eating 3 evenings in McDonalds would take my budget for the entire week and still leave me hungry. That means 4 days of starving and no breakfast xD Fast food restaurants aren't cheap, they are for lazy people, home cooking will always be cheaper, no Burger King menu can compare itself with 60 cents Aldi noodles and 1.20€ ketchup xD
I think he means cheaper compared to actual restaurants and other fast food chains.
@Zahin Okenshield His first sentence literally explains that he's not from the US. You should rly work on your reading comprehension skills.
Yeah, but many people eat at real resteraunts when they can afford to, which will often be far more expensive than a McDonald's meal.
It's always cheaper to cook at home, but most people don't have the time or energy to do it everyday, nor the cooking skills to make varied and interesting foods.
@Zahin Okenshield he doesn't. Read his first sentence.
Mc Donalds also ignores the working conditions for the staff on the floor. Even here in Norway, newspaper has found extremely bad employee conditions.
My favorite part is the post-it note to do list... Break ice cream machine. 😆
They also make big money by purposely hiring employees with less than 25 hrs a week and just sending in more people to cover shifts people already working would be willing to continue working so they don’t ever get close to paying overtime or giving employees benefits like health insurance or paid time off
When government makes things mandatory, this is a predictable and expected outcome. McDonald's acting like that is a symptom of a problem, not the problem itself
All this aside, having not been to McDonald's for some time, and longing for just an order of fries, I went through the drive-through, ordered a large order of fries with two salt packets, and nothing more. It was $3.51 and the thing was a little over half full. Never again. Cost on that item is surely less than 50 cents, overhead included.
Never dealt with fries waste Calc but I can tell you the Angus meat is only like .75
Lol
Yea they never fill the fries full. Your order large fries and you get what a full non large size should be.
@@oriondx72 they say a small is really a large. Guess it all depends on where u dine at and how good of a location it may be ?
Dude I just said the same thing. I hadn't been in quite some time and I ordered two fillet o fish sandwiches for $6 and an order of fries. My bill was over $9 I couldn't believe how much they charge for fries.
Broke: McDonald’s is a restaurant chain
Woke: McDonald’s is a real estate company
Not woke but the people who saw this video
It's not the same
Normie
@@TECHNOSNAP it's woke people thing. Foolish and lazy don't know it.
@@onedynastyforonechannel no if you don't have even general knowledge then you are a fool
Interceptor810, or better Red Pill should be saying that, people who identify themselves as Woke are usually anything but that. People who identify themselves as Red Pilled seem to be really like Neo in The Matrix after he's been unplugged and stripped of his delusions. People who are Woke are typically left-wingers who live in a fantasy-land of waiting for a socialist/communist utopia, the same kinds that have failed and left utter devastation and millions of people dead over the last the 100 years. People who identify as Red-Pilled generally support systems that have brought billions of people out of poverty over the last 1/2 century or so.
McDonald's, the true American Empire
Nuke it, it already took over Russia
Hi fearless leader 👋
It's Disney: American empire
Donald Trump has lost the election, yet refuses to accept the result. Few leading Republicans are pressing him to do so. The Republican Party is in uncharted territory. What is the future of the GOP post Trump's presidency? Comment below with your questions and our experts will answer them in an upcoming film.
@@shawnfernandes7239 he's using all legal means and he's on the path to win. he's not a stupid dictator in some stupid country.
Cheap materials/Labour combined with great brand recognition.Franchise or not, the rent wouldn’t be rolling in without the aforementioned methods.
In Brazil, fast food like MC and BK are for the Upper Class. A complete meal cost R$15 or less and a Big Mac combo more than R$22
How real estate companies make money: Find the locations McDonald's desires, buy it before they do, and sell to McDonald's for a profit.
Stonks
Funny Thing Is, Nobody Could Catch Up With The Rate At Which McDonald's Going. Besides That, They Expand Their Business Mindset Through Franchising, Which Is Mentioned In The Video That Anyone Can Start One.
"Find the locations McDonald's desires, buy it before they do" seems like a daunting task... Unless you have access to the mindset of every single person on Earth, which is wired through neuro-implants and capable of using that information to turn it into profit.
Oh wait, Neuralink does that. So, you're actually right about that one.
S T O N K S📈📈📈
@@maxplaysgamez-sharesgaming1756 What's with the initial caps on all words stupid kiddio?
@@maxplaysgamez-sharesgaming1756 Start up an independent place called McDowell's.
+@@BilisNegra Well, Good To Hear. Regardless Of The Fact Of Your Discrimination Upon Freedom Of Expression And Freedom Of Speech, This Stupid Kiddo Is Excelling At Understanding The Development Of Linear Regression, Pooling, Data Structures Of Autoencoders, Anisotropic Simulations, Light Transport And Furthermore Within The Field Study Of Deep Learning.
#ColdFusion #NewThinking
I called the owners for years complaining about their ice cream machine here in Austin Texas and they never once returned a call.
I mean why would they? lol. You kept going there.
@@Ka_Gg - Yeah I go once in a blue moon but I had to cut back dramatically because of it. And I’m sure others have also. Nobody in their right mind would ever expect the machine to be broken for years. Those truths are just now coming out.
A movie called 'The Founder' also shows the growth and how McDonald's really makes money
Keaton's performance was fantastic!
Highly suggested, great movie
Basically scammed the original founders
Killer movie!
How McDonalds actually make money:
Opening a diabetes hospital in every McDonalds
Actually, Big Mac is quite healthy balanced food. Just don't buy any additional sugar, like coke or ice cream.
No they should open a fitness center in each Mcdonalds
@@JUANFRFR They already do, it’s the play area
@@SuperPlayz ha lol
Talk about a feudal lord and the lowly serfs in the XX-XXI century.
Interesting how these fast food chains offer very cheap food, whereas in my country, in eastern europe, the same fast food chains are considered a quite expensive option. Here you can eat at an actual restaurant for about the same as you would pay for a meal at mcdonalds...
That's because in most European countries, there are employment laws that doesn't allow the corporates to pay shit wages and also, the ingredients need to be of a standard quality, not the chemical cocktail that they serve in other countries. Thus, running the business in a legit and healthy way requires the prices to be jacked up. That's why the Europeans pay with cash while the Americans pay with health, but alas, guess who has free healthcare?
I've visited McDonald's in Eastern Europe and it really didn't cost much compared to the UK McDonald's
@@joshmcgregor4839 I get that. I don't know what a double cheeseburger costs in the UK now, but here's it's equivalent to £2.20. Which may still sound cheap, but imagine you're working a decent full-time job for an averagely sized salary of £430 a month net... And imagine that minimum wage is £0.60 per hour... It's not McDoanlds' fault, but it just can't be "cheap" food here...
@@Gworan here in the uk a double cheeseburger 1.49
@@Gworan In india a MacD vegetarian burger costs roughly £1.2 and an average person needs about two burgers.At the same price you can get freshly prepared burgers and if homemade with retail ingredients its £0.5.They have started to lose against the competition.
It seems like the franchisees from McDonalds can earn a lot of money. The CEO of McDonalds Austria even quit is job in order to become a franchisee.
The person who franchised McDonald’s stole the idea from Dan and Ivan McDonald and franchised it. He then bought McDonald’s and made money off of assets
@@drmg735 No, he saw a value in a way to expand the business. It was not just about selling burgers. Then someone else worked out the franchise concept and they ran with it. Now they recognise it as what it always was. Fast food funded, high guaranteed rent, real estate with lots of fall back clauses to ensure whatever happens to the economy McHQ gets paid.
Just about every busines makes a ton of money. There is a risk you can go out of business but its rare. The model is the same: work your employees to death. Pay them as little as possible. Get rich off their labor. The biggest risk at these places is when employees figure out the game and steal from them. Usually its a manager that steals money. Then the owner can lose a lot. We live in one of the richest points in human history yet in the United States welfare pays better than a full time job. you are supposed to work a full time job and live homeless with the wages they pay people. And the weirdest thing- even if you do twice the work as others (thus saving the company money) they usually don't want to pay you anything more- so it just pays to be stupid and lazy at these places which makes the service bad (main reason I cut back my fast food and restaurant intake- over priced and bad service, lowest quality cheapest ingredients they can find always used etc.).
Then when they ship the job to China or replace you with a machine they pass very little of the savings to the consumer. They just make even more profit. I realized the scam but I never had enough money to start my own business or get out of the wage slavery. It's so much better to do an employee owned business with profit sharing- the business is ran better- employees actually care about the business instead of being lazy and stealing, and its more fair on everyone pay people what they deserve.
@@raymondkidwell7135 That is BS. 7 out of 10 businesses fail within 10 years and of the remainder 7 out of 10 of them fail in the next 10. Being in business long term and profitable is hard.
@@billgreen576 That is a good point. Even a perfectly ran business can fail due to factors out of your control (the economy takes a down swing or new competition) but most of the business failure is because anybody can start a business. Any idiot. The figures are inflated due to those people who just dabble in it. Like some mom and pop trying to start a business and don't know what they are getting into. Even the pros have businesses that fail- but this is calculated risk- mitigated risk because the profits are so high when it does succeed. I have not met many people that failed at business.
An example. My uncle worked for an appliance repair company for years making $12 an hour or something like that, plus use of a company van. He came into some money and just started his own appliance repair business from his house. His income jumped to around $60 an hour. There were days when he made $1,000 in a day compared to the $100 he was getting paid by the company he worked for. He just cut out the middle man.
He had some problems with the IRS because he didn't know about collecting sales tax and such. Then he died and the business closed up. Someone could have just continued the business but it was a one man operation. I guess on paper the business went bankrupt after 15 years or something. His son started his own business doing the same thing and made really good money but him and his wife wouldn't even answer the phone when it was ringing off the hook with customers and other bad decisions he eventually closed it and got a regular job and just do side work repairing appliances. On paper his business went under but it was actually very profitable for him as a whole. I also talked to people who own restaurants and other similar businesses. The main thing that causes them to go under is a manager that steals from them rather than the business not being profitable. It's all a big game of exploiting people in most cases.
"During recessions for cheap food"
- meanwhile, as a human being which only eats McDonalds about once per year: This is fkn expensive! Mc nuggets + burger + pommes = more expensive than every other average food
this is food for lazy people who are "too busy" to prepare fresh and healthy meal.
I don't know why he calls them 'cheap'. A big Mac menu costs about €7.-
For that money you could get two packs of noodles, 1.5L cola bottle and a bag of chips.
@@flopsinator5817 i just looked it up.. our menus actually start at 9,29€.
And this is hella expensive for that garbage
And now lets say i dont want a menu but 9 mcnuggets, pommes large and a burger + coca cola it is more than 18€. Just freakin imagine paying 18€ for garbage. You could literally visit a nice restaurant or buy 3 good pizzas.
When I worked at McDonald's I was astonished at how much money people spent to eat there. I wondered why they wouldn't just spend the same money to eat at a real restaurant. But if you only eat the "value" items you can fill up on relatively little, as far as fast food goes.
@Raj Nair That's because Indians on average earn less than their European counterparts. No one in India would buy a bottle of coke if it costs the equivalent of €1.50, so they lower the price to compensate for that.
3:29
To-do:
Break ice cream machine
"high standards to become a franchisee"
In my country, like a lot of the training methods here, It all looks really good on paper. But in reality it's all fast-tracked. I'm sure the stores that get media coverage are watching what they do but I have worked in 5 seperate stores (including 1 overseas) and they just do not have the time to commit to the expensive training head office expects.
I've actually seen a franchisee get fast-tracked trained and it involved spending an entire 3 months at every station as a crew member yet I don't remember ever seeing him come out of the office unless shit was about to hit the fan.
going back to training as a whole though, there is entirely too much pressure to be under a certain labour cost every week for them to really get the training right, this is why your local maccas is rubbish!
But that's the reality nobody wants to accept, if you want better service it's going to raise the price.
Would like to see 'Light' versions of the massive fastfood chains, which focus on: Lower fat, lower sugar and higher fiber content in their food. I think that would work really good in many locations across the world.
cant get little kids addicted to low sugar products. I very much think McDonalds target audience isn't people who care about their health
Two reasons why that’s not going to happen:
1. Simply put, this food is more addictive. People like how it tastes, these businesses don’t care about health, they care about the sheer profit a location can earn. High sugar gets kids and people who are easily addicted in the door, high fat gets those with severe eating addictions to walk in the door and become highly profitable long term customers (in the world of commerce, people who make large long term investments like this are known as “whales”). Low fiber is simply cheaper.
2. It’s cheaper, most normal people who buy fast food buy it for two reasons: it’s cheap and it’s quick. For people in very low income locations, their only options are those that are incredibly cheap, they don’t buy better food because they can’t GET better food, they need it for everything else.
Besides low fat food will involve much more effort than the regular greasy food so cost will go up.
McDonald's in Philippines has great food n healthy
I was talking to an older guy and we thought of something simple. It wasn't really the healthiest, but it was designed for working people that are either on lunch or eating dinner. Just a simple tray. Only 1 meat option with a few vegetable options and simple drink each day. Example on monday it may be meatloaf, potatoes, corn and a drink. Next day change up the meat and still have 2 other vegetables. Wouldn't have to be a big operation since you have minimal items. Charge like $5-$8. I think you'd have a lot of blue collar workers that would enjoy it. Manual labor type people.
But I could be wrong. It could flop.
Well done on making a 9-min version of the movie, 'The Founder.' You added a bit more detail and I'm grateful.
Finally someone one on TH-cam decided to make a video on this. Thank you! I knew about this a long time as a young bookworm having an interest in company histories at the time. So I read about the story of Mcdonald's at my local library. This was during the days of dial up internet😅 As I recall, It was actually the idea of one of the members of Ray Kroc's executive circle to turn Mcdonalds into a real estate play to make it more appealing to investors at time and obviously it worked
MatPat: *profusely sweating*
I would say he copied this but it takes more than 5 days to come up with a script edit record idk it just looks to me like a weird Coincidence
@@thatmusicguy49 somehow i don't think so, plus he has a team of writers
@@thatmusicguy49 Yeah It was probably just bad timing for both of them.
I kind of want a McDonald's now
"American Tax Law"
*SHOWS CANADIAN MCDONALDS*
(6:19)
@@xshxr Idk I've never been to Alberta lol. My guess is yes.
Canada is just cold USA
@@xshxr Yep, that one is definitely at Banff.
@@hatsoff4524 I been there. Expensive as fuckkkk
Also showed Arby's condiments at 6:54
7:26 That's Wroclaw, Poland! :D :D What a random place to be featured in an online video! :)
I know a retired cop that opened a McDonald’s in Harlem in New York. He eventually opened up 5 more.
Ok the part about the location makes so much sense. Every McDonald’s I’ve ever seen is on a busy road by traffic lights😂😂. Also a company in my town makes all their garbage cans/tables and stuff
They also really go all out when it comes to some of their restaurants worldwide. A DC3 plane, a Georgian-style McMansion, a UFO, a storefront-sized Happy Meal, Art Deco, a marble and mosaic Roman one to name a few. They certainly try to appeal to the locals and tourists
Aren't you everywhere!!
@@kontde McUbiquitous
In lots of cases they are sort of forced into doing this. In my city, Bruges, Belgium, the McDonald's in the city center is in a 500 year old house. This is because all houses in the city center are this old, what else are they going to do if they want a McDonald's in the city center?
McWorldwide
reads Rich Dad Poor Dad once:
THEY DONT SELL HAMBURGERS BROOOO
Thank you for the video. Aldi & Lidl in Europe have similar business models, they're also real estate businesses.
Its not all about real state, its real state and brand management. That is why makes no sense to split.
exactly, the real estate on its own is worth far less as the location isn´t worthwhile enough for much else besides fast food chains.
Also they take 35% of all profits due to management fees, advertising, and franchises fees placed on the franchises.
real estate not real state
All the McD's huts are placed at an intersection with traffic lights here, now that I think of it...
2:45 “... it knows the precise ingredients of a successful location.”
Two all beef patties, special sauce, lettuce, cheese, pickles, onions, on a sesame seed bun?
By not giving customers ketchup no matter how many orders of French fries the customer pays for.
Good, Ketchup is nasty
Approved supplier, lol! My uncle owns a McDonalds in eastern Europe and he's used the "approved supplier" probably once. He saves money by buying local beef and vegetables from his towns farmers market.
Wow really lol
They can’t do that here.
That sounds like paradise
I understood all that when I saw the movie The Founder and thought Ray Kroc is a genius, he understood what business is via renting properties to install mcdo's
Ray Kroc didn't know anything until his Jewish Lawyer showed him the way of the Darkside!!
8:35 nice
logo
Noice !
Amazing video with very clear explanation, thank you
Breh food theory straight ripped this video
LLOOOVEEE the no gloves directly touching products
4:13 (Basically) Las Vegas Mickey D’s 🤣🤣🤣🙃
They also buy locations it doesn't want or need, to stop competitors from opening stores.
The to-do list of breaking the ice cream machine really got me hahahah
5:40 No gloves!
Was thinking the same thing 🤢
@@N8DAW6 I wonder how much fecal matter is on their hands.
You can't trust people to thoroughly wash their hands.
The food gets really hot anyways and almost all of the bacteria gets killed
@@mdominic8201 They touch the food after it is already cooked.
You guys should also checkout the movie "The Founder".
What business am I in?" Ray asked, once the group had all their beers in hand."Everyone laughed," said Keith. "Most of the MBA students thought Ray was just fooling around."No one answered, so Ray asked the question again.
"What business do you think I'm in?"The students laughed again, and finally one brave soul yelled out, "Ray, who in the world does not know that you're in the hamburger business."
Ray chuckled. "That is what I thought you would say." He paused and then quickly said, 'ladies and gentlemen, I'm not in the hamburger business. My business is real estate." Keith said that Ray spent a good amount of time explaining his viewpoint.
Rich dad poor dad Robert kiyosaki
Wow this narrator is good! So well informed. I am stunned. Great job!
Interviewer: Where do you graduate from?
Me: Hamburger University.
Interviewer: You think this is a joke?
So funny at 3:27 : To-do - break ice cream machine.
I was looking for this comment. 😂😂😂
@@audricksekamondo6706 LoL....
To do: *break the ice cream machine* xD
This cracked me up.
What are you here for?
Micdahnalds: we take up land space and give people heart disease
Wrong. People give themselves heart disease. No one is holding a gun to anyone's head saying you must east fast food.
@@larryroyovitz7829 Yeah, that's why the obesity epidemic started _after_ the fast food revolution. Nobody forces you to buy fast food, cigarettes or semi-automatic weapons. They're just easily available and quick.
@@nimrodery So? Its much easier to sky dive now than before we could fly. People die sky diving, but no one is blaming planes or sky diving providers. People should take personal responsibility, but everyone is looking to blame someone/something else for their failures. It's just excuses, I don't care how "easy" it is to aquire/eat these things that are bad for us. Jesus...does everyone need a babysitter?
@@larryroyovitz7829 Remind me how many people die skydiving as opposed to obesity. And then show me how the skydiving equipment and training industry took advantage of people by not warning them of any of the dangers of skydiving, and trained generations of kids to yell at their parents to take them skydiving.
@@nimrodery It shouldn't matter how many people die. Not warning people of the danger...are you saying you and many others are too stupid to realize fast food is bad for you? Wow. Take some personal responsibility for once and quite blaming others for your ineptitudes.
That Clip of the Hand sneakily going into the tub of Fries sums up McDonald's when talking about their rental scheme.
As a previous maccas manager, those crew would be shot in Australia if they were preparing food without gloves 🧐😂
maybe some shop's do when at MacDonald I had use gloves and that when at school experience to it bit fun so yeah
I'm interested in knowing how much McDonald's is going to make in November
Why?
Why?
Why?
Why?
Why?
5:51 She is so proud of herself.
cool, you managed to condense an entire movie (The founder) explaining this into a 9 minute video
Polymatter is indeed a McDonald's franchisee
In Canada, a Big Mac combo is between 9-11 dollars depending on location.
Can you do a video on Hospitals and Certificate of Need Laws (and how these regulations impact Competition between Hospitals and Price of Healthcare Services)?
Hospital food is not healthy either, processed and heated in a microwave
Why do people think that McDonalds is selling food cheap? Its pretty expensive
You can buy a burger for $1 or a burger, fries and soda for between $5 to $10 in many locations in many countries
@@SurprisinglyDeep 1$ for a burger???? where is that ?
@@sebastiank686
In some states in America. It'll cost between $1 to $3 for some burgers.
www.mcdonalds.com/us/en-us/full-menu/123dollarmenu.html
McDonalds is well known for its "dollar menu"
Like in my country Canada you won't find a burger for under $2. However if you look at the cost of some beef burgers some are only $2.50 or $3
costfindercanada.com/mcdonalds-prices-in-canada/
yes. It cost a lot and you get tiny portion that does not fill you. if you go to noodle restaurant etc you pay less and its too much for one person to eat
I know right????!
i like how at 3:30 there is to do : break the ice cream machine
like its not already broken
🤣
First learned of this from the Rich Dad. Thanks for a further elaborated version.
Same here. 👌
What’s the rich dad?
@@AnythingGoesTV4203 the one you don't have
@@AnythingGoesTV4203 "Rich Dad, Poor Dad" it is a book
By underpaying employees and using sub par ingredients regardless of the state they are in?
"you're not in the burger business, you're in the real estate business"
This video surprises me as it is far less expensive to buy fresh food vs. going out to eat, including fast food. Plus, with regards to the fast food list, Subway and Wendy's are very expensive. Not surprising though that McD's does make a ton of money as they are cheap in both cost and quality.
Where are you at that this is true? I can get a burger, fries, a drink, and nuggets for $4
I think one thing that this video fails to acknowledge as well is that McDonalds makes a lot of revenue, if not more revenue, from wholesaling their food products. Each franchise locations are locked to only allow to serve McDonalds food products, cups, boxes, napkins, and everything mcdonalds. Any Franchisees are not allowed to use different types of napkins, or cups or anything and cannot add to the food menu their own types of food. They have to buy and only use all of those food products at what is considered "wholesale" price from Mcdonalds HQ. Only company owned locations can experiment and add items to food menu as experiment for other franchise locations. It's not wrong, that's just how they are doing it. Revenue from that alone is more than real estate rent costs.
I think it mentions that in the section about franchise agreement
The Big Mac, Filet-o-Fish, Egg McMuffin and Ronald McDonald were all originally developed by franchisees not corporate so something must have changed.