McDonald’s isn’t a Fast Food Business And There’s Why
Why McDonald’s is a property business and isn’t the food franchise as some of you may think
McDonald’s is one of the most popular fast-food chains in the world. But what many people don’t know is that McDonald’s isn’t a fast food business — it’s a property business. In this blog post, we will explore the reasons behind McDonald’s success and how its focus on the property has set it apart from other fast-food businesses.
McDonald’s was founded in 1940 as a restaurant chain. However, it wasn’t until 1955 that McDonald’s became the global brand we know today. As the founder of McDonald’s said and as we can see if we’ll dive deeper into how this huge franchise we’ll notice that the key to McDonald’s success has been its focus on franchising and real estate. If you don’t fully understand, don’t worry, I’ll explain it in a minute!
By owning the property on which its restaurants are built, McDonald’s has been able to control costs and expand rapidly, in other words, if you own many restaurants around the whole world it’s easy for you to increase pricing, and people will still come and buy your burgers. This has been a key driver of McDonald’s success. In fact, McDonald’s now owns more than 36,000 restaurants in over 100 countries. And that number is growing every day. This is an incredible feat for any business, let alone a fast-food chain.
In recent years, McDonald’s has come under pressure from activist investors to sell its property portfolio and focus on its food business. However, McDonald’s has resisted these calls, arguing that its real estate business is a key part of its success. McDonald’s is a property business that just happens to sell burgers. And that’s why it’s one of the most successful businesses in the world.
What’s more, because McDonald’s owns the property on which its restaurants are built, it can choose to lease it to franchisees. This means that McDonald’s has very little capital invested in each individual restaurant. This low-risk business model has allowed McDonald’s to weather economic downturns and continue to grow.
You can also look at some franchises like KFC, Burger King, or Hardees. They’re huge too and almost everyone knows about them, however, they don’t have as many restaurants as McDonald’s have, and McDonald’s is still growing at a fast pace. That’s because McDonald’s knows how to use its real estate to drive growth.
This focus on the property has allowed McDonald’s to weather economic downturns and remain profitable even when other fast-food chains have struggled. McDonald’s is a true property powerhouse and its focus on real estate has been key to its success. Thanks for reading! I hope this gave you a better understanding of McDonald’s business model.
So next time you’re enjoying a McDonald’s meal, remember that you’re not just eating fast food — you’re also supporting one of the most successful property businesses in the world! Thanks for reading.
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