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luvdemboomers
loner with a boner

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fast food economics
#19191125 - 11/26/13 09:54 AM (10 years, 2 months ago) |
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Let's say a mcdonalds has a revenue of 5 million per year. After all expenses are taken care of (employee/managers pay, food, electricity, maintenance, etc) approximately how much of that 5 million is left over?
Jw...
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Patlal
You ask too many questions



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I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
EDIT #2: It would be responsible for them to keep 500k in cash. Just in case.
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Edited by Patlal (11/26/13 09:59 AM)
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luvdemboomers
loner with a boner

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Re: fast food economics [Re: Patlal]
#19191140 - 11/26/13 09:59 AM (10 years, 2 months ago) |
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Quote:
Patlal said: I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
That's a fuckin lot if you think about it.
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shivas.wisdom
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Registered: 02/19/09
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This will definitely vary based on location, but perhaps a rough idea would be to look at what McDonalds grosses, as a corporation, and then compare this to actual revenue--than extrapolate to a single franchise.
In 2012, McDonalds grossed about 27.5$bil, with a total revenue of about 5.5$bil. Therefore, about 20% profit.
20% of 5$mil would be a cool 1$mil.
But yea, this may have no actual bearing on real life. Planning on opening up a franchise are we?
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qman
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Re: fast food economics [Re: Patlal]
#19191145 - 11/26/13 10:01 AM (10 years, 2 months ago) |
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Patlal
You ask too many questions



Registered: 10/09/10
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Quote:
luvdemboomers said:
Quote:
Patlal said: I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
That's a fuckin lot if you think about it.
Yes it is a lot and it is why fast food companies are criticize for not paying their employees more. I have heard that if they doubled the salary of every employee in the business, the Big Mac would only cost 69 cents more to the customer or something like that. No a big deal.
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Ellis Dee
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Quote:
luvdemboomers said:
Quote:
Patlal said: I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
That's a fuckin lot if you think about it.
Last I knew the franchise fee to open a McDonalds was a cool 1 million, and that was years and years ago. Those places do a lot of business. I've never heard of one closing due to lack of sales.
-------------------- "If the foundations be destroyed, what can the righteous do."-King Solomon And there was war in heaven: Michael and his angels fought against the dragon; and the dragon fought and his angels,
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dontknow
It's all in the reflex


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Re: fast food economics [Re: Patlal]
#19191154 - 11/26/13 10:02 AM (10 years, 2 months ago) |
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Maybe not to you but baby if i had that 69 cents i'd have a stew goin
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The discerning heart seeks knowledge, but the mouth of a fool feeds on folly. -Proverbs 15:14
“Imagination is everything. It is the preview of Life’s coming attractions.” Albert Einstein
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luvdemboomers
loner with a boner

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Re: fast food economics [Re: Patlal]
#19191205 - 11/26/13 10:15 AM (10 years, 2 months ago) |
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Quote:
Patlal said:
Quote:
luvdemboomers said:
Quote:
Patlal said: I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
That's a fuckin lot if you think about it.
Yes it is a lot and it is why fast food companies are criticize for not paying their employees more. I have heard that if they doubled the salary of every employee in the business, the Big Mac would only cost 69 cents more to the customer or something like that. No a big deal.
Even a couple of dollars would make a big difference to employees. Hell even one dollar... 8.25 vs 7.25
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Patlal
You ask too many questions



Registered: 10/09/10
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Quote:
luvdemboomers said:
Quote:
Patlal said:
Quote:
luvdemboomers said:
Quote:
Patlal said: I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
That's a fuckin lot if you think about it.
Yes it is a lot and it is why fast food companies are criticize for not paying their employees more. I have heard that if they doubled the salary of every employee in the business, the Big Mac would only cost 69 cents more to the customer or something like that. No a big deal.
Even a couple of dollars would make a big difference to employees. Hell even one dollar... 8.25 vs 7.25
McDonald's could easily position themselves in a situation where people want to work there instead of having to work there. They would get better candidates for sure.
One thing that I admire though is that Most McDonald's are run by a bunch of teenagers working their first job and yet the restaurant still manages to operate properly. The kids are alright
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shivas.wisdom
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Re: fast food economics [Re: Patlal]
#19191270 - 11/26/13 10:29 AM (10 years, 2 months ago) |
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That's because they've boiled down the vast majority of day to day tasks to simply pressing a button (generally colour coded and labeled) to start a timer, and then waiting for the beep to signal your move on to the next step/button.
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mpd
Lammen Gorthaur



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Re: fast food economics [Re: Patlal]
#19191331 - 11/26/13 10:44 AM (10 years, 2 months ago) |
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Do your due diligence OP. This is what I do for a living (capital finance planning and capital raises) and I can tell you that $1 million isn't going to cut it.
-------------------- There is no truer calling for mankind than that of true conservatism.
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koraks
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Re: fast food economics [Re: mpd]
#19191443 - 11/26/13 11:10 AM (10 years, 2 months ago) |
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This is going to be far too complex for a community of users who obviously don't even know what revenue is
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mpd
Lammen Gorthaur



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Re: fast food economics [Re: koraks]
#19191449 - 11/26/13 11:10 AM (10 years, 2 months ago) |
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Then, there's that...
-------------------- There is no truer calling for mankind than that of true conservatism.
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Amphibolos
Le bourgeois gentilhomme




Registered: 05/22/09
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Re: fast food economics [Re: Ellis Dee]
#19191510 - 11/26/13 11:26 AM (10 years, 2 months ago) |
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Quote:
Ellis Dee said:
Quote:
luvdemboomers said:
Quote:
Patlal said: I believe McDonald's has a profit margin of 20% (If I remember correctly. So 1 million.
EDIT: Actually, nothing should be left. But at the end of the year, they should have a revenue of 6 million.
That's a fuckin lot if you think about it.
Last I knew the franchise fee to open a McDonalds was a cool 1 million, and that was years and years ago. Those places do a lot of business. I've never heard of one closing due to lack of sales.
Mcdonald's retired from Bolivia because they couldnt compete with the local food sellers.
Which i find really nice, the victory of the local economy versus the transnational industry. Way to go bolivians
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"Homo sum ; humani nihil a me alienum puto"
Edited by Amphibolos (11/26/13 11:46 AM)
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koraks
Registered: 06/02/03
Posts: 26,672
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Re: fast food economics [Re: Amphibolos]
#19191525 - 11/26/13 11:30 AM (10 years, 2 months ago) |
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Why couldn't they compete? Can you tell us some more about it in terms of segmentation and cost profiles? Because it wouldn't be very good if the local economy turned out to be producing food in an even less ethically sound and sustainable way and that way beat McDonalds.
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koraks
Registered: 06/02/03
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Re: fast food economics [Re: koraks]
#19191540 - 11/26/13 11:34 AM (10 years, 2 months ago) |
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Hm, 3 seconds of googling actually suggests that Bolivians to like their fastfood and that some of that is actually peddled by the well-known brands. So much for the local economy beating the evil corporations huh? http://ain-bolivia.org/2012/01/mcdonald%E2%80%99s-left-bolivia-in-2002-fast-food-still-abundant-on-city-streets/
Edited by koraks (11/26/13 11:34 AM)
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shivas.wisdom
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Re: fast food economics [Re: koraks]
#19191559 - 11/26/13 11:38 AM (10 years, 2 months ago) |
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It was mainly due to a cultural aspect of Bolivians, where it is believed all meals should be prepared with love, dedication, certain hygiene standards and proper cook time--not only are meals in Bolivia expected to be prepared with care and attention, ingredients must be simple and healthy too.
Which, for obvious reasons, clashed with the McDonalds 'fast-food' model.
As for comparing the method of food production used locally in Bolivia, to the method used by McDonalds--a little bit more difficult to answer--but I would be highly surprised to find out that McDonalds functions more ethically and sustainably than a local food market.
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koraks
Registered: 06/02/03
Posts: 26,672
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Oh yeah, OP, page 11 of this pdf contains what you need to know: http://www.aboutmcdonalds.com/content/dam/AboutMcDonalds/Investors/Investor%202013/2012%20Annual%20Report%20Final.pdf They even conveniently split the franchise and McD's-operated restaurants.
Quote:
shivas.wisdom said: [...]
Read the link I posted. The hippie crack sounds sympathetic, but it makes no sense. There's plenty of fast food restaurants in Bolivia, just like in any other country that has ever come into contact with the concept of fast food.
My point is not that McD's would be superior to the local food supply in any specific way; I'm just stating that it's too easy to take a simplified factoid at face value and then connect all sorts of bullshit conclusions to it. Get down to the facts and then come back.
Edited by koraks (11/26/13 11:41 AM)
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shivas.wisdom
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Re: fast food economics [Re: koraks]
#19191595 - 11/26/13 11:47 AM (10 years, 2 months ago) |
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I was just mirroring what a quick search brought up--the existence of other fast food chains is kinda the final nail in the coffin for the theory, though.
Apparently, only McDonalds knows why McDonalds left Bolivia.
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Amphibolos
Le bourgeois gentilhomme




Registered: 05/22/09
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Re: fast food economics [Re: koraks]
#19191662 - 11/26/13 12:00 PM (10 years, 2 months ago) |
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i shouldnt have used the word "broke" because its obvious they didnt go broke. 
From my experience, i think that the fast food restaurants were mostly popular in the richest neighborhood of the big bolivian cities like La paz or Santa Cruz. In the smallest cities where i stayed for the most part, there werent transnational franchises, but only local fast food franchises like "Pollo Rico" and such.
In the proletariate neighborhoods, its where the local restaurants shined. Its basically where the people spent their afternoon break before going back to work, it was like a mean to eat for cheap and socialize with your friends and neighbors. I think that the variety of food and the price was also what oriented the people through these places. You could have a complete traditional meal for like 12 bolivianos including a soup, a beverage and a principal dish.
However, considering that 12 bolivianos is still alot for the people of a poor ascentamientos family, there was a another type of restaurant defined by their mobility, like "portable" restaurants which sold for far cheaper and cibled the poorest neighborhoods. I think it was around 2-5 bolivianos for a burger and a coca cola.
So the rich were eating fast food through bigger franchises names, and the extremely poor were eating at the mobile restaurants or the food that they grew or cooked themselves. The low-middle/proletariate class were mostly eating in the local restaurants.
I take a guess here, but once the country will have an increase of the amount of people in the high middle-rich class. There will be more opportunities for the big franchises to prosper
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"Homo sum ; humani nihil a me alienum puto"
Edited by Amphibolos (11/26/13 12:07 PM)
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koraks
Registered: 06/02/03
Posts: 26,672
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Re: fast food economics [Re: Amphibolos]
#19191700 - 11/26/13 12:06 PM (10 years, 2 months ago) |
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It'll be just like Russia and China, where it started small and then the whole McD thing spread like an ink stain on a piece of really crappy paper.
The likely reason why McD's pulled out of Bolivia in 2002/2003 is just because it fit in the list of countries it pulled out from at that time, and it also fit the major restructuring due to the bad financial results in 2002. It's not so much that the competition won; McD's just fucked up in the late 1990s throughout the early 2000s, forcing them to rationalize their business. New 'settlements' with weak growth are typically the ones that are pruned at times like those, even if they hold the promise of healthy long-term growth.
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Amphibolos
Le bourgeois gentilhomme




Registered: 05/22/09
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Re: fast food economics [Re: koraks]
#19191727 - 11/26/13 12:13 PM (10 years, 2 months ago) |
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But hell, 12 bolivianos for a complete meal, its like $1.7 for a soup with meat, a coca cola (in bottle) and a principal dish with vegetables, meat, rice/quinoa...
Maybe im idealizing but i like to think McDonald's couldnt offer that much variety for the price.
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"Homo sum ; humani nihil a me alienum puto"
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koraks
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Re: fast food economics [Re: Amphibolos]
#19191852 - 11/26/13 12:46 PM (10 years, 2 months ago) |
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Most Chinese will probably find McD's overpriced as well. Hell, many Russian today may even think so. Yet, McD's is growing strongly in both of these countries. It's not a winner takes all game, the fast food business. There's room for lots of market segments and niches - more expensive ones too. And if that wouldn't work, they could still source locally and try to drop prices that way. I understand they didn't go that route in Bolivia.
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