THE REAL BUSINESS MODEL OF MCDONALD'S: MORE THAN JUST A HAMBURGER

We would all enjoy a McDonald's hamburger at any hour of the day. It's affordable and delicious. But have you ever pondered how this enormous conglomerate makes money? You most likely assume that this company makes revenue by providing high-quality fast food. But, surprisingly, it's much more than merely some exquisite hamburgers and fries. Let's crack the code!

McDonald's has undoubtedly established itself as one of the world's largest fast-food corporations, with over 38,000 outlets in over 100 countries catering to over 68 million customers daily. McDonald's is actually a real estate company. Yes, you read it correctly. Unlike other fast-food chains out there, McDonald's owns the restaurant property and leases the property to the franchise as a part of the franchise agreement. This facilitates healthy cash flow in the form of renting the enterprise. Furthermore, the franchisees are required to pay 4% of the gross sales to McDonald's Corporation. It recovers the purchase expense of the real estate by collecting rent from the franchise owners. And the franchise owners, in turn, get benefitted by selling high-quality McDonald's food with international standards. According to Business Insider, an average McDonald's restaurant generates around $2.7 million a year in sales. This is the primary cause behind the cheap cost of food items.

That is what makes McDonald's a billion-dollar company and proves that Ray Kroc, the business's founder, was an absolute mastermind.

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