But you want evidence, typical McD franchise makes betwee 500k and 1Mm per year.”””
GROSS or NET??? Have done bookkeeping for a restaurant in the past & never saw this kind of net figures.
Scan up, its in another post.
The fact that folks here can’t just grasp the very simple math that a McD franchise requiring between 1 and 2 MM of investment to open, is not worth it to make 150k a year is disturbing... This isn’t rocket science, this is pure and simple risk/reward and basic mathematics.
You, or anyone else for that matter, can open themselves up basic restaruant, nothing fancy, sandwhich shop, burger store, etc... for no more than about 30k of investment... Assuming you keep your raw food costs to 1/4 to 1/3 of your menu price which is pretty typical of the industry and you run your business fairly competently, you should easily be able to show profits in the 100k or more a year range. Hell, your typical seasonal Ice Cream stand averages 30-50k a year profit.
It blows my mind how economically ignorant some folks appear to be.
Let me ask you a simple question, forget everything else.. if you had 1 to 2 MM dollars in cash, and someone said to you, I will take your cash for you to have a business that will make you 150k a year... so in about 7 to 14 years you will have earned back your initial investment? Would you give that man your Millions? Does that make any sense to you to do??? The flat out obvious answer is absolutely NOT! No one with access to that sort of capital is going to take the risk for that small of a return, it would be stupid, beyond stupid.
The fact that folks seriously want to argue this point just proves how economically ignorant some people are.
As I pointed out elsewhere, you can take 2 MM put it in a 20 year annuity and withdraw more than 150k per year for 20 years with little risk, and that’s at a paltry 6% return.
If all I want is 10 or 11% return, I can easy go buy notes for those sorts of returns... less hassle, no hiring or firing of teenagers, no calls about a backed up toilet, or need to put on a new roof or grill or whatever else it needs, or a health inspector shutting me down... etc etc.
A 10% return for a 1-2MM investment that will require the sort of risk owning a restaurant does, makes absolutely no economic sense. This equation should be inalienable, a person with just a tertiary understanding of economics should realize that this is a bad investment and would never work in the real world. You could not attract a single investor to buy a MCD franchise if the typical profit per year were only 150k.
Yes, no doubt that higher wages cut into jobs, that much of the article is correct, but the presentation that the typical McD franchise only makes 156k a year profit is asinine, and shows the author is either intentionally being dishonest presenting that information as realistic, or they are just economically ignorant.