McDonald’s Almost everyone in the world knows it. The company’s best-known products are hamburgers. like that Big Mac Index There’s even a concept called it (I’ll explain this in detail later, in fact it evaluates economic conditions relative to the Big Mac). So, does McDonald’s main business sell hamburgers? Or KFC? Is Starbucks just a coffee shop?

One of the names that make McDonalds McDonalds Ray Kroc A story told about the. in 1974 In the latest incident, a group of University of Texas Business Administration graduates were drinking and chatting with Ray Kroc, who came to the school to deliver a speech. Ray students “What am I doing?” he asks. The students, on the other hand, think the man is making fun of them and laughing. Ray, on the other hand, repeats his question without being serious. One of the students “Is there anyone in the world who doesn’t know you’re in the hamburger business?” he answers. on the track “I knew you thought that. Ladies and gentlemen, I’m not in the hamburger business, i do real estate“ he answers. So why did he say that?

Today, McDonalds generates approximately 80% of its multi-billion dollar net profit through rental income from its properties and franchising.

In highly valuable regions around the world, especially in the US McDonald’s It is possible to see restaurants. A similar situation applies to other fast food and beverage producers. KFC, pizza hut, Taco Bell The owner of three giants like Yum! Brands owns more than 54,000 restaurants in more than 155 countries. The return on all these real estate investments is a very important source of income for companies.

Let’s look at the reasons for this situation:

First, let’s take a look at what franchising is:

In very simple definition franchiseis the use of a brand at a given price. Here’s what the franchisee can do limited, he acts as determined by the brand. In return, it uses the power of the brand.

In practice this is much more complicated. When a brand franchises, it researches it and chooses it accordingly. to use your brand allows. Even if you’re wasting the world’s money, they won’t allow you to open a branch in a location that hurts the reputation and image of the brand. Many franchises also place restrictions on how your store should look, even hiring their own architect directly.

When opening a franchise, large chains are usually present. property they buy themselves. They then start renting out this property to the franchisee. In other words, in addition to fees such as brand licensing, marketing, and advertising, the franchisor also seeks to receive rental income.

Every company has different strategies.

McDonalds generally purchases the land or buildings in which the franchisees are located whenever possible. If you’re going to eat a Big Mac today, that restaurant building 70% chance belongs to the company. The rest are malls etc. are long term rental shops in places like:

Starbucks, on the other hand, is a company that follows a different strategy. A site will be built somewhere, a mall will be built, investments will disappear, etc. Starbucks is one of the first companies you see there. Today in Istanbul or other major cities gentrification (Removal of the local population as the upper class began to settle in the places where the low-income lived) Starbucks goes, other stores will follow. Starbucks, of course, does not stay away from important centers. (Starbucks also has a banking side, which would be the subject of a separate article.)

Another striking aspect of the company is the number of stores in the future plans of almost all chains. through franchise locations there is increase. In other words, these companies will try to tax the real estate sector even more in the future. So in the future, these “food and beverage giants” may become real estate companies that let only their tenants pay the rent.