McDonald’s doesn’t make its money from food

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(WYTV) – This comes to us from Business Insider: McDonald’s sells a lot of food, enough to serve more than 70 million people every day. So how does McDonald’s make its money? Is it the fries? The Big Macs? It doesn’t make its money selling food.

What really brings in the profits is real estate. McDonald’s has some 36,000 locations worldwide, but the company actually owns only five percent of them.

The rest are franchised out. McDonald’s has contracted with individuals to operate them. The company owns the land, but the franchisee is responsible for all the costs of running the restaurant while also paying McDonald’s for rent, which is usually ten percent of the sales, a $45,000 franchisee fee and a monthly service fee equal to four percent of gross sales.

A former McDonalds Chief Financial Officer, Harry Sonneborn, years ago told investors, “We are not in the food business. we are in the real estate business. The only reason we sell hamburgers is because they are the greatest producer of revenue from which our tenants can pay us rent.”

Bonus nugget: You should always ask for a receipt at McDonalds. certain people are paid to visit McDonald’s restaurants and rate their experiences online, and they are reimbursed for their purchase.

So if a customer asks for a receipt, the employees are more likely to serve that customer first and give him the freshest food.

Bonus nugget: the secret ingredient in McDonald’s apple pies is apple powder, made of dehydrated apples and citric acid. It soaks up extra liquid to keep the filling nice and thick and add more of a fruity flavor.

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