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DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » Corporate greed and why d... » Reply #4

Response to kimbutgar (Reply #3)

Tue Jul 30, 2013, 03:48 PM

4. Yes, that's how franchising works


Your friend was not anomaly as this is the basis of the franchisor/franchisee arrangement. Did you really think this was esoteric information? The actual owner of the store sets hourly rates so they are the people you have a beef with, not the parent company. The monthly franchise fee is only 4% of gross revenues and I would stipulate that if 4% of gross is going to eat your lunch you have a business that is not a going concern. "Going concern" is a business concept that means the operations can be indefinitely self-supporting. One can read more about the going concern concept in the October 2008 FASB codification of it. It is not the fault of the MCD parent corporation if a franchisee's margins are so slim they cannot pay a living wage.

Here is a link documenting the monthly franchise fee: http://www.franchisedirect.com/foodfranchises/mcdonalds-franchise-07030/ufoc/ Pay no attention to the start fees are those are sunk costs and one time items that have nothing to do with the ongoing operations.

You can disagree with my point but that would be illogical...which you are of course free to be.

Lastly, you are incorrect about your friend. He/she gave a percentage of the gross. The proof it was a % of the gross is a) my link and b) if they had a negative month, and it was a % of the profit, they would not pay that month.

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