On Wednesday McDonald's CFO presented at a Bank of America Conference. This comment
appears to be gibberish. Is this some kind of McNewSpeak?
I understand incremental sales, I understand break-evens and contributions margins.
"And so on a margin percentage basis, the franchisees get a lower margin percentage on
this sale than they do if someone came to the front counter because the added cost is this commission. But in terms of additional dollars, the fact that 70% incremental is giving
them clearly more dollars and our breakeven, if you will, incrementality is substantially
below 50%. So there's a lot of room, let's say before we get anywhere close to breakeven
from an incrementality standpoint."
Here's a transcript of the presentation:
McDonald's Management Presents at Bank of America Consumer - Seeking Alpha