Nice perspective from a third party that understands the conditions that exist for the McDonald's franchisees.
What is not often discussed ........ Is the reality that during the first 20 years, the franchise operator rents the building for about 10% of sales/TRIPLE NET. A number that any landlord in the world would consider a DREAM LEASE, and generally commands a cost per square foot that exceeds 95% of the property available in most cities in the world.
DURING THE SECOND 20, (with a re-write), he/she is often required to rebuild the facility, (at the franchisees expense), "as condition of re-write". So, the franchisee has spent 20 years building the business, and the franchisor says " rebuild my building, to a large extent, at your expense & in case I forgot to tell you, I also want you to continue to pay rent on the building that I required you to tear down ! And if you object, you will feel the full force of the system that you helped to build? AND ..... did I forget to mention ...... you have no rights to the ownership of the building in the event you decide to retire, sell or die.
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Nice perspective from a third party that understands the conditions that exist for the McDonald's franchisees.
What is not often discussed ........
Is the reality that during the first 20 years, the franchise operator rents the building for about 10% of sales/TRIPLE NET. A number that any landlord in the world would consider a DREAM LEASE, and generally commands a cost per square foot that exceeds 95% of the property available in most cities in the world.
DURING THE SECOND 20, (with a re-write), he/she is often required to rebuild the facility, (at the franchisees expense), "as condition of re-write".
So, the franchisee has spent 20 years building the business, and the franchisor says " rebuild my building, to a large extent, at your expense & in case I forgot to tell you, I also want you to continue to pay rent on the building that I required you to tear down ! And if you object, you will feel the full force of the system that you helped to build?
AND ..... did I forget to mention ...... you have no rights to the ownership of the building in the event you decide to retire, sell or die.
Truth is stranger than fiction.
Also .......
I forgot to add in the post above ......
we also want to increase your rent !
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