Corporate greed and why don't fast food restaurants pay more

[kimbutgar]

I has been supporting the minimum wage workers who are bravely going out on strike so I decided to go over to Yahoo Finance and do some research on corporate profits

MCD Mcdonalds as of 6/30/13 had 1.87B in cash on their books so far this year they have had revenues of 27.79 B and a profit margin of 19.85%!

DPZ Dominos as of 6/30/13 had 40.84 Million in cash on their books and so far this year they had revenues of $1.75 B and a profit margin of 7.50%

Darden (owns Red Lobster, Olive Garden, Longhorn Steak and a bunch of other chains 2100 restaurants total) had 90.10 million in cash so far this year and revenues of 8.55B with a profit margin of 4.82% as of 5/26/13

YUM (Burger King)has 500 million cash on hand revenues of 13.15 B as of 6/29/13 a profit margin of 10.84% and 500 million in cash.

So these companies can afford to pay more than the minimum wage and they would make more if they paid their workers more who would go to other restaurants and spend their money.

Corporate greed at its worst. I no longer eat at chain fast food restaurants only small locally owned ones who are not publicly owned by Wall Street. And all these companies have been doing stock buybacks to make their companies more attractive to Wall Street. Sick

[msongs]

1. main reason not to eat there: unhealthy food full of salt, fat, sugar (pfcs) nt

[Bunnahabhain]

2. Need to dig deeper

I'll just use your first company listed, MCD, as the example. The McDonald corporation only owns about 15% of all stores the rest being owned by franchisees. So pointing out MCD's profits is irrelevant for 85% of the stores.

Your second example, Dominos, has around 5000 stores in the US and only about 450 are corporate owned.

So while the issue of higher wages is an important one to talk about what you are using as "proof" is not relevant. Sorry.

[kimbutgar]

3. I knew someone who owned a franchise and they had to give a percentage of their profit

Every month. If they had a negative month they still had to pay McDonald's. So I disagree with your point.

[Bunnahabhain]

4. Yes, that's how franchising works

Your friend was not anomaly as this is the basis of the franchisor/franchisee arrangement. Did you really think this was esoteric information? The actual owner of the store sets hourly rates so they are the people you have a beef with, not the parent company. The monthly franchise fee is only 4% of gross revenues and I would stipulate that if 4% of gross is going to eat your lunch you have a business that is not a going concern. "Going concern" is a business concept that means the operations can be indefinitely self-supporting. One can read more about the going concern concept in the October 2008 FASB codification of it. It is not the fault of the MCD parent corporation if a franchisee's margins are so slim they cannot pay a living wage.

Here is a link documenting the monthly franchise fee: http://www.franchisedirect.com/foodfranchises/mcdonalds-franchise-07030/ufoc/ Pay no attention to the start fees are those are sunk costs and one time items that have nothing to do with the ongoing operations.

You can disagree with my point but that would be illogical...which you are of course free to be.

Lastly, you are incorrect about your friend. He/she gave a percentage of the gross. The proof it was a % of the gross is a) my link and b) if they had a negative month, and it was a % of the profit, they would not pay that month.

[Rex]

5. You are spot on, pay no attention to the dodge.

Franchise and affiliates both pay royalties and rent and fixed fees. You are correct and the other poster is incorrect. They probably pulled the numbers out of whole cloth.

[Bunnahabhain]

6. Except

that I didn't.

http://money.cnn.com/2013/04/24/smallbusiness/dominos-deliveryman/index.html

Too lazy to go refind the McD #.

Of course Franchisees pay rent. To their landlord. smh

[KamaAina]

7. YUM is Yum! Brands

KFC, Taco Bell, and others, but not Burger King.

[KamaAina]

8. Jack In The Box threatened to leave San Jose if we raised the minimum wage to $10/hour

a regional burger chain in the West. We did. They didn't. No one seriously believed they were going to abandon America's tenth largest city and make us drive to Campbell for a hamburger.