Skip to main content

View Diary: Detroit Fast Food Emporium to pay $15/hr, Make Profit, and Expand. (103 comments)

Comment Preferences

  •  If McDonalds corporate has to lower the skim (4+ / 0-)
    Recommended by:
    jpmassar, 207wickedgood, Creosote, JerryNA

    they take off of franchisees to make it continue to be a good investment, they will.

    The alternative is that locations close down, their profits nosedive, and their market share is eaten by both small business and wiser corporate chains.

    My understanding is that franchisees have a median take-home of a quarter million a store. Buying one that's up and running and ready to go costs 1 to 2 million all told.

    The only person I ever actually knew who had one of their franchises purchased it in the early 1970's.  He owned his own location and didn't have to pay the corporation rent.  I knew him in the very late '80's, and this was apparently no longer even an option for franchisees - they all had to rent their store from corporate in addition to paying 4% of gross receipts.

    Something like 15% of McDonalds locations are directly corporate owned.  The corporations absolutely does set the pay rate there.

    "But the traitors will pretend / that it's gettin' near the end / when it's beginning" P. Ochs

    by JesseCW on Tue Sep 10, 2013 at 02:29:52 PM PDT

    [ Parent ]

    •  No doubt the corporation controls the pay at (1+ / 0-)
      Recommended by:
      jpmassar

      company owned stores. However, at restaurants owned by franchisees McDonalds isn't going to change the amount sent to corporate because an individual owner decides to double his labor costs, on his own. There are some cities in the country where the minimum wage is dramatically higher than the national average and it would be interesting to know if any of the major fast food franchisors cut the local owners any slack on their corporate fees so the franchisee's profit margins are about the same as the national average?

      "let's talk about that"

      by VClib on Tue Sep 10, 2013 at 03:10:15 PM PDT

      [ Parent ]

      •  If owners have to raise wages to compete (0+ / 0-)

        for workers, it's going to come out somewhere.

        If Corporate tries to ram it all down the throat of franchisees, then franchises lose value which is of no benefit to Corporate.

        Corporate sets "rents" where they like.  This is not rent in any traditional sense - it's an additional percentage of gross.

        I'm sure that is heavily related to the profitability of a location.

        "But the traitors will pretend / that it's gettin' near the end / when it's beginning" P. Ochs

        by JesseCW on Tue Sep 10, 2013 at 03:46:06 PM PDT

        [ Parent ]

        •  It would be very interesting to know how the (1+ / 0-)
          Recommended by:
          jpmassar

          franchisee/parent economics works and what the franchise agreements actually say on some of these issues. Is any of this available online, or do the franchisors keep this very confidential until they have vetted any potential new franchisees?

          "let's talk about that"

          by VClib on Tue Sep 10, 2013 at 05:19:54 PM PDT

          [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site