Coalition of Franchisee Associations

September 20, 2014

Accountants are Important, But ...

All too often I’ll come across a McDonald’s Operator who is thinking about selling a really
good store. A store with high volume, reasonable rent, a good facility, etc. The Operator
will say something like, “I’m going to meet with my accountant to determine what the store
is worth”.

What?

This the product of years of focus on cash flow ratios, valuations by experts, and continued
interference in store resales by McDonald’s corporate.

Accountants don’t determine resale prices of McDonald’s stores – the seller and market
conditions ultimately decide the selling price.

Accountants play an essential role in store sales. They can help the buyer decide if they can
afford the deal. They help the seller with tax ramifications and other issues.

But having an accountant determine the value of a uniquely good store?

Nonsense.
.

3 comments:

Anonymous said...

My McD accountant is one of my best friends but he and his people talk to the regional offices far too much.

Anonymous said...

So many of us have a good store or two and then have a group of stores that drag down the value of our estate because of remodel and rebuild requirements.

Anonymous said...

Yes True, and then what happens when your good store gets remodeled for a million dollars? Your estate suffers more.

ROI does not correspond with the amount spent. Now had you owned the building and property like Corporate owns most sites.....you would be increasing your real estate equity.