McDonald's

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.

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.

For years, McDonald's own 10-Ks showed rent from franchisees running about 2-to-1 over brand royalties - $4.8 billion of rent against $2.4 billion of royalties in 2009. The burger isn't the business the company most reliably taxes; the land under it is.

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.

In 2022 Carl Icahn owned about 200 McDonald's shares, roughly $50,000 worth, when he launched a proxy fight over pig crates. His nominees drew about 1% of outstanding shares. McDonald's still spent an estimated $16 million to beat him.

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.

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.

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.

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.

When Jim Cantalupo died of a heart attack on April 19, 2004, McDonald's board named a new CEO the same day. Seven months later it did it again. Two sudden losses, no strategy wobble — because the plan was never a name in an envelope. It was the bench.

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.

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.