Coalition of Franchisee Associations

July 21, 2023

Burning Through Cash

CPA firm Quick and Associates' recent newsletter contains an article on calculating break-even sales and also cash burn rate. My first thought was that we all learned that stuff when we were in short pants, but maybe not.

One of the comments from analyst Mark Kalinowski's latest Owner/Operator survey (from a very experienced Owner/Operator) was:

"I find that most operators don’t understand the concept of Capex and think our cash flows are all ours."

A review of this very brief article might be worthwhile.

Breakeven and Burn Rate: Valuable Tools for Managing Performance


Anonymous said...

One of the most telling comments in Kalinowski's survey was from an owner complainingg that his passive investments make more profit than his MCD restaurants do. That will kill the brand. Why would it continue to be worth it to deal with all of the headaches and lawsuits and SEIU and field rep PIAs when you can just collect dividends and interest instead?

Richard Adams said...

There are many reasons to own and operate a retail business. Sometimes it's just fun and exciting. For most, that's a much better life than just following the progress of passive investments.
Unless the global organization is led by someone who is only in it for the money and the power.
In that case, the dear leader and his henchmen will just stand in the bow of the boat, pound the drum faster, and ask, "Isn't this fun?"

Anonymous said...

McD was fun, today? not so much

Anonymous said...

You said they were suppose to only pound the drum... whys my head and back hurt.