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View Diary: McDonald's is responsible for working conditions in franchise restaurants, labor board says (79 comments)

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  •  If margins are so terrible (15+ / 0-)

    then why is anyone still owning? You'd think they'd give away their stores.

    I'm living in America, and in America you're on your own. America's not a country. It's just a business.

    by CFAmick on Tue Jul 29, 2014 at 01:26:23 PM PDT

    •  Margins are terrible because (24+ / 0-)

      McDonalds has them on the debt ropes. The Franchise Owners, unless very lucky and have a source to borrow money outside the franchise system, are essentially slaves of the clown.

      •  This: (0+ / 0-)

        looks like profit margins for franchisee owners are not so bad after all:

        Franchising is an extremely profitable business, which largely explains why food-service retailers such as McDonald’s, Subway, Burger King and Dunkin Donuts prefer franchising their stores to owning them.

        McDonald’s own-operated stores had EBITDA margins of around 23% in 2009 as compared to around 88% of franchised stores. The difference in margins results mainly from the extra operating costs incurred by company-operated restaurants, such as payroll and rent. As a result, having more franchised stores increases McDonald’s overall profitability.

        http://www.forbes.com/...

        "We are beyond law, which is not unusual for an empire; unfortunately, we are also beyond common sense." Gore Vidal

        by Superpole on Wed Jul 30, 2014 at 06:55:08 AM PDT

        [ Parent ]

        •  The article states that it's better (0+ / 0-)

          for the parent company to franchise.

          I'm living in America, and in America you're on your own. America's not a country. It's just a business.

          by CFAmick on Wed Jul 30, 2014 at 07:11:52 PM PDT

          [ Parent ]

          •  Correct; couple of reasons for that: (0+ / 0-)

            the parent corporation gets paid licensing/franchising fees.

            two: the parent corporation is not responsible for the day to day operations of the store, i.e. the hiring, training and paying of workers.

            "We are beyond law, which is not unusual for an empire; unfortunately, we are also beyond common sense." Gore Vidal

            by Superpole on Thu Jul 31, 2014 at 05:20:41 AM PDT

            [ Parent ]

    •  Tax Writeoff / Money Laundering For (3+ / 0-)

      rich owners?

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

      by Gooserock on Tue Jul 29, 2014 at 03:53:42 PM PDT

      [ Parent ]

      •  If you wanted to launder money (0+ / 0-)

        you would never try to do it through a franchise operation where the franchisor audits your books frequently. Privately owned restaurants, home remodeling, and cash businesses like laundromats and coin operated car washes, are the favorites for money laundering.

        No one takes losses as a tax writeoff.  Why would anyone lose a dollar to get 40 cents worth of federal tax benefit?

        "let's talk about that" uid 92953

        by VClib on Tue Jul 29, 2014 at 08:59:58 PM PDT

        [ Parent ]

        •  "No one takes losses as a tax writeoff." (0+ / 0-)

          I think you should reword this.

          It should be more along the lines of "No one legitimately attempts to lose money simply because they want it to take a tax write off."

          Plenty of businesses write off legitimate losses.  At the same time, many firms do indeed look for ways to come up with creative quote-unquote "losses" they can write off.

          It's no where near as cut and dry as your anecdote.

          There was no such thing as a "wealthy" hunter-gatherer. It is the creation of human society that has allowed the wealthy to become wealthy. As such, they have an obligation to pay a bit more to sustain that society than the not-so-wealthy.

          by Darth Stateworker on Wed Jul 30, 2014 at 08:27:24 PM PDT

          [ Parent ]

          •  I did not state that clearly (1+ / 0-)
            Recommended by:
            nextstep

            No one intentionally creates a loss for tax purposes. It would be like exchanging a dollar for 40 cents.

            "let's talk about that" uid 92953

            by VClib on Wed Jul 30, 2014 at 09:12:13 PM PDT

            [ Parent ]

            •  *"No one intentially creates a LEGITIMENT loss." (0+ / 0-)

              Again, plenty of firms do come up with creative ways to show "losses" to deduct and help their bottom line.

              Prime example: the en vogue practice of moving intellectual propery off shore to a subsidiary and having the subsidiary charge fees to the parent for using the IP.

              Did the company actually post a real loss? No. But they can make it appear that way on their US tax returns and reduce or wipe out their tax liability for that year.

              This is just one example of many.

              There was no such thing as a "wealthy" hunter-gatherer. It is the creation of human society that has allowed the wealthy to become wealthy. As such, they have an obligation to pay a bit more to sustain that society than the not-so-wealthy.

              by Darth Stateworker on Wed Jul 30, 2014 at 11:14:42 PM PDT

              [ Parent ]

    •  Margins are always terrible (2+ / 0-)
      Recommended by:
      StrayCat, VClib

      with a single franchise, and not just at McDonalds. The numbers do not start to work well until 3+ locations.

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