Free Republic
Browse · Search
News/Activism
Topics · Post Article

To: goldstategop
You would think the McDonalds owners/franchisees could afford the upgrades out of their own pocket? 100K per store is really not that much.
6 posted on 09/29/2008 9:51:46 PM PDT by rawhide
[ Post Reply | Private Reply | To 1 | View Replies ]


To: rawhide
No. But its a win win arrangement for the franchisees and the bank. McDonalds gets the equipment to become profitable and the bank sees a return on its investment.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

10 posted on 09/29/2008 9:53:18 PM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives In My Heart Forever)
[ Post Reply | Private Reply | To 6 | View Replies ]

To: rawhide

“You would think the McDonalds owners/franchisees could afford the upgrades out of their own pocket? 100K per store is really not that much.”

There are often advantages to borrowing to make these upgrades, such as deductibility of interest. Yes, I know that deductions are by definiton a subset of actual outlays, but still. Believe me, not every McDonald’s is a “license to print money”. I knew a guy who owned 5 of them, he said only one made enough money to really be worth it. That’s another point; many owners own multiple locations, and the upgrade cost for a slug of 4 or 5 or 8 locations can amount to more cash than the owner is willing to toss out all at once; yet the qty discounts associated with buying that much gear at once can be an economic benefit. Ergo: Big slug of dough req’d; ergo; loan or lease often more desirable than outright cash purchase.


33 posted on 09/29/2008 11:34:50 PM PDT by Attention Surplus Disorder (Tired from wondering whether we wake up in the newest socialist country tomorrow.)
[ Post Reply | Private Reply | To 6 | View Replies ]

To: rawhide
You would think the McDonalds owners/franchisees could afford the upgrades out of their own pocket? 100K per store is really not that much.

Any small business owner that will succeed long term won't leave $100K sitting on the shelf. They will leverage it out to $1M or more using lines of credit and invest in growing their business.

And that's a very good thing.

38 posted on 09/30/2008 4:33:13 AM PDT by IamConservative (On 11/4, remember 9/11...)
[ Post Reply | Private Reply | To 6 | View Replies ]

Free Republic
Browse · Search
News/Activism
Topics · Post Article


FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson