McDonald's

McDonald's collects more from rent ($10.0B in 2024) than from royalties ($5.6B). The man who built that machine said it plainly: the company is in real estate, and the hamburger is just how the tenant earns enough to pay the landlord.

The $5 Meal Deal looked like a bold value reset. It was a perception patch its own franchisees voted down until Coca-Cola chipped in roughly $4.6 million—and the sales miss it was meant to prevent had already landed before launch.

The McAloo Tikki and the Maharaja Mac get sold as cultural sensitivity. They're really the output of a ~95%-franchised model where local operators carry the risk - and with risk comes the authority to change the menu. Of 41,822 restaurants in 2023, about 95% weren't owned by McDonald's at all.

In April 2003 a retired executive came back, announced a five-point plan, and reversed a slide that had just produced a $343.8 million quarterly loss. The famous fix wasn't a recipe or a slogan — it was the decision to stop opening restaurants and start filling the ones it had.

Everyone read the Dollar Menu as McDonald's giving customers a deal. It was really corporate seizing the price gun: a Stanford study found franchisees had been charging a 12.5% premium on the Big Mac, and the menu cut it to 3.6% by 2006.

The royalty was only 1.9% of sales — too thin to fund anything. The real flywheel was a 1956 real-estate model that owned the land under every franchise and subleased it back at a markup. Today that property is worth $37.7 billion on the balance sheet.

McDonald's acquired Dynamic Yield in 2019 to personalize the drive-thru, then sold it to Mastercard, booking a $271 million pre-tax gain. It looked like a tech retreat. It was really a company learning it never needed to own the tech at all.

The legend says one CEO came back in 2003, launched 'Plan to Win,' and quadrupled profits. The plan was real. But the man signed his own 10-K and died 16 months later, the 'first-ever loss' was mostly an $810 million write-off, and gains from divesting a burrito chain did some of the heavy lifting.

To enter a country where the cow is sacred and the pig is forbidden, McDonald's spent five years building the first beef-and-pork-free menu in its history. The 50:50 joint venture that pulled it off later ended in a courtroom — and, at the peak of the dispute, 43 of Delhi's 55 outlets dark.