And Hollywood profits aren’t from movies, honestly you’ve fallen for basic accounting tricks…
A franchise that doesn’t make money devalues the retail space. McDonald’s model links rents to sales so they take maximum value at all times.
Royalty fee: 4% of gross revenues
Brand marketing and promotion fee: 4% of gross revenues
Location rent: Unlike most other franchises, McDonald’s owns the land and buildings at its locations and franchisees pay rent that can be based on a percentage of sales or as a fixed amount. Percentage rents are 31.75% of sales. Fixed rents are typically £100,000 to £225,000 per month.
So Corporately it looks like they make their money from rent. But that rent is directly linked to sales and labour in most cases.
Without sales they don’t get rent unless they’ve agreed a fixed rent and that’s increasingly rare. Usually only the highest value sites.
The real estate value of the property is linked to business revenue as well. If a franchise fails and doesn’t get another investor then the empty building is worth a lot less.
By picking McDonald’s you’re actually about as wrong as possible. Everything of value is linked back to labour, even the value of the land.
It might work differently in other countries but I doubt it. Economics work the same everywhere and McDonalds didn’t like to standardise when they find a winning model for themselves.
I get what you’re saying here. McDonald’s, the franchiser, makes money on rent. But they’re renting to McDonald’s franchisee’s (at least in part, likely a majority of it). Even if they’re renting out to third parties, those third parties are making money largely from service, which is rendered via labor.
So the service is performed by labor, and the service makes the revenue to pay the rent and pay the labor, QED, rent is paid by labor.
McDonald’s franchisee’s are paying their rent with labor. It’s not like the franchise is getting fully assembled big Macs delivered. The labor needs to assemble the parts to make the whole.
Without labor, they would have no product to sell, since it’s not feasible to cut out the on site assembly of the food while keeping it as fresh as it is.
Yes, a nontrivial part of revenue is in materials, and there’s a mark up on the sale of those materials when sold, but the majority of cost is for the labor of putting everything together.
On top of this, there’s plenty of non-McDonald’s examples of the same. I work in IT support, almost all of my work is service, where I go in, either in person or remotely, and perform corrections to get things working normally. There’s plenty of industries that have similar models, where there’s little to no production of things that you’re paying for, and the vast majority of the payment is for labor.
Finance, tax prep, handymen, carpenters, welders, programmers, factory workers, delivery drivers… The lion share of revenue is directly from labor.
With food service costs are generally split between labor and materials, since the raw materials can be rather costly, but for many other workforces, labor is the main revenue.
Your uninformed (or hopeful) if you think big businesses make money from labor. A lot of it is from capital, investments or rent.
E.g. McDonald’s profits are mostly from rent.
And Hollywood profits aren’t from movies, honestly you’ve fallen for basic accounting tricks…
A franchise that doesn’t make money devalues the retail space. McDonald’s model links rents to sales so they take maximum value at all times.
Royalty fee: 4% of gross revenues
Brand marketing and promotion fee: 4% of gross revenues
Location rent: Unlike most other franchises, McDonald’s owns the land and buildings at its locations and franchisees pay rent that can be based on a percentage of sales or as a fixed amount. Percentage rents are 31.75% of sales. Fixed rents are typically £100,000 to £225,000 per month.
So Corporately it looks like they make their money from rent. But that rent is directly linked to sales and labour in most cases.
Without sales they don’t get rent unless they’ve agreed a fixed rent and that’s increasingly rare. Usually only the highest value sites.
The real estate value of the property is linked to business revenue as well. If a franchise fails and doesn’t get another investor then the empty building is worth a lot less.
By picking McDonald’s you’re actually about as wrong as possible. Everything of value is linked back to labour, even the value of the land.
It might work differently in other countries but I doubt it. Economics work the same everywhere and McDonalds didn’t like to standardise when they find a winning model for themselves.
Labor existed before capital. Capital cannot exist without labor. Labor can exist without capital.
Capitalism’s value and money is based on your labor, that’s it, that’s the foundation for all of it including rent.
McDonald’s franchises can’t pay rent without that business making money. It’s labor at the end of the day. Always is. Always has been. Always will be.
I get what you’re saying here. McDonald’s, the franchiser, makes money on rent. But they’re renting to McDonald’s franchisee’s (at least in part, likely a majority of it). Even if they’re renting out to third parties, those third parties are making money largely from service, which is rendered via labor.
So the service is performed by labor, and the service makes the revenue to pay the rent and pay the labor, QED, rent is paid by labor.
McDonald’s franchisee’s are paying their rent with labor. It’s not like the franchise is getting fully assembled big Macs delivered. The labor needs to assemble the parts to make the whole.
Without labor, they would have no product to sell, since it’s not feasible to cut out the on site assembly of the food while keeping it as fresh as it is.
Yes, a nontrivial part of revenue is in materials, and there’s a mark up on the sale of those materials when sold, but the majority of cost is for the labor of putting everything together.
On top of this, there’s plenty of non-McDonald’s examples of the same. I work in IT support, almost all of my work is service, where I go in, either in person or remotely, and perform corrections to get things working normally. There’s plenty of industries that have similar models, where there’s little to no production of things that you’re paying for, and the vast majority of the payment is for labor.
Finance, tax prep, handymen, carpenters, welders, programmers, factory workers, delivery drivers… The lion share of revenue is directly from labor.
With food service costs are generally split between labor and materials, since the raw materials can be rather costly, but for many other workforces, labor is the main revenue.
Bro thinks rent and investments make money from the magical money fairy
rent on what?
Come on, follow through. Don’t leave the equation partially finished. Rent on what?
RENT ON FUCKING MC’DICKOLDS FRANCHISES. Not rent on Toy R Us, not rent on Starbucks, it’s rent on MICKY-DEEZNUTS FRANCHISES MATE.
Cute thou.