You can be fine with it but it’s not reality. The Typical MCD franchise profit is 500k to 1MM a year... It would have to be to get anyone competent to even think of opening up a McD’s.
The idea that a MCD franchise typically only makes 150k a year is absurd on its face, no matter how good of an accountant you have.
Simply put 2Million put in a 20 year annuity at 6% return will put more than 150k cash in your pocket for year, with a lot less headache and risk. No one, I repeat No One with a functional brain would agree to tie up 2MM into operating a business with only a 150k a year return.
Yes higher wages will result in fewer jobs, but the author of this article doesn’t have a flipping clue about business to present the notion that a typical McD franchise only profits 150k a year. If that were true MCD would not be able to sell a franchise.
I am taking the $150K of earning per McD store at its face value, which may or may not be. It is really does not matter for the argument I was trying to make.
You, however, are saying that a $150K of return is too low for any sane investor (of 2MM). My point is that the true return is likely far north of $150K, which will blow the 6% annuity out of the water. Sure, with annuity, you get a hassle-free steady stream but the payout is much lower. Assuming $150K earning McD, the franchisee will get their income separate (reported as an expense) and gets to build assets. The annual taxable income is just noise in the grand scheme of things. A loud noise, but still just that. Creative accounting is survival, or else the pay to the moochers would be too high to sustain.
With automation looming, most of these “$15/hr good paying jobs” would be obsolete. About time.