How McDonalds Really Makes Money

McDonald's makes more money off of real estate than they do selling food. But how? It's 2008 and the US is in the middle of a giant economic recession. Businesses are closing, houses getting foreclosed, and bankruptcies everywhere. But McDonald's, they open 600 new stores. And this quickly makes McDonald's the 5th largest real estate company in the world. Along with renting the McDonald's name and brand in exchange for a portion of the profits, McDonald's offers Hamburger University. Good morning, class. A program that teaches franchisees how to guarantee fast food success. And it's super detailed, like down to the exact number of salt shakes used to maximize maximize profits. But here's the problem. You now know how to operate a store, but you have no idea where to put it. So McDonald's swoops in. They know the exact spot and size needed for the location, and they purchase the locations and then they rent it to the franchisees. If the restaurant doesn't perform, they can simply sell the location for a steep profit because they know it's prime real estate. And owning your real estate often means a business can control its destiny. Today, more than half of the money McDonald's makes comes directly from rent.