About How Much Do Fast Food Franchise Owners Make? - Page 2 - Business, Finances and Investing Forum

Sorry I confused you with someone else....Yes Id be glad to give you a real one, just let me know what means you have to open it and lets contract the 10% finders fee because otherwise Im wasting my time.

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05-28-2008 , 07:02 PM

#28

S2000Maniac

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a guy in my town did a presentation in our accounting class.

he owns the 4 mickey D's in town.

He said the average mcdonalds owner makes 500k profit a year.

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05-28-2008 , 07:30 PM

#29

Mandor_TFL

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Quote:

Originally Posted by S2000Maniac

a guy in my town did a presentation in our accounting class.

he owns the 4 mickey D's in town.

He said the average mcdonalds owner makes 500k profit a year.

I heard the opposite from a former McD franchisee. Well to be paraphrase him he said that McD franchisee's made most of their money from the value of the business rather than making oodles of money. Seeing as how much labor must eat into their profits I was inclined to believe him. That being said very busy McD's certainly could make that much. One of the great benefits if you run a business right is when you got to sell it you can sell it for a very significant profit.

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05-28-2008 , 07:39 PM

#30

ArturiusX

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Originally Posted by code7654321

Everyone is health conscious nowadays.

I lol'ed

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05-28-2008 , 08:11 PM

#31

Tien

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Thanks mandor for the inputs on franchises.

Good to know what is going on from the inside.

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05-28-2008 , 08:12 PM

#32

StockMarketFTW

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Quote:

Originally Posted by S2000Maniac

a guy in my town did a presentation in our accounting class.

he owns the 4 mickey D's in town.

He said the average mcdonalds owner makes 500k profit a year.

That guy might avg 500k profit for his 4 stores total, or he may have been given the wrong info. The avg profit per store is no where near that amount.

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05-28-2008 , 08:14 PM

#33

Thremp

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Quote:

Originally Posted by StockMarketFTW

That guy might avg 500k profit for his 4 stores total, or he may have been given the wrong info. The avg profit per store is no where near that amount.

Average owner =/= average store

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05-28-2008 , 10:10 PM

#34

Innocent Kitty

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Quote:

Originally Posted by Mandor_TFL

Umm, the value of a business is directly correlated to its income.

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05-28-2008 , 11:14 PM

#35

Mandor_TFL

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Quote:

Originally Posted by Innocent Kitty

Umm, the value of a business is directly correlated to its income.

People sometimes overpay for assets that are not worth that on a Profit and Loss sheet. For instance almost any Subway is worth 100k, even ones that have never shown a profit. And if you liquidate a Subway your sure not gonna sell that equipment for much more than 10k I'd guess.

I suppose the other point I am making is that a McD franchisee who owns the land it is built on ( like from what I understand most of them do ) is earning non-liquid cash assets. Sorta like a home mortgage. So when the franchisee sell's he is earning a big payday, but until then he makes a relatively modest profit.

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05-29-2008 , 04:33 AM

#36

guids

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Quote:

Originally Posted by Innocent Kitty

Umm, the value of a business is directly correlated to its income.

Def not true in the nightclub industry, in fact Id almost argue the opposite.

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05-29-2008 , 04:37 AM

#37

guids

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Originally Posted by Yowserrrs

So many in fact that you couldnt even list one in your post...thanks for your valuable contribution.

the only restaurants that are really profitable are ones that are run like franchises, menu choices etc, in all reality dont play near as much as a part as youd think.

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05-29-2008 , 08:25 AM

#38

Yowserrrs

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Quote:

Originally Posted by guids

the only restaurants that are really profitable are ones that are run like franchises, menu choices etc, in all reality dont play near as much as a part as youd think.

Stats contain numbers and relationships. This is just your argument reworded.

"The only restaurants that are really profitable are ones that are run like franchises"

What does really profitable mean? I live in NYC and theres some unique places making serious bank here. Maybe in regards to whatever farmtown youre from where they serve the same diner food at every place, then I would agree the menu choices dont have much of an impact.

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05-29-2008 , 09:15 AM

#39

Jimbo

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Originally Posted by guids

Def not true in the nightclub industry, in fact Id almost argue the opposite.

This seems odd, in my experience a nightclub is worth almost exactly one years net income, barring any real estate value or national franchise name recognition.

Jimbo

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05-29-2008 , 09:35 AM

#40

stankpickle

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Mandor,

Thank you very much for your contribution to this thread, it has been most enlightening.

Question for you:

I think it was in some investing book I read, Ray Kroc (McD's founder) was talking to a bunch of students and asked them what his business was. They all said he was in the hamburger business. He said they were wrong, he is in the real estate business.

Can you explain that to me please. I don't see how he made money off of real estate.

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05-29-2008 , 10:42 AM

#41

JohnnyHumongous

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Quote:

Originally Posted by stankpickle

Ray Kroc supposedly made most of his millions from the land values of the restaurant properties he owned rather than actual profits from food sales. The restaurants paid for financing the underlying property and gave him leverage to open additional restaurants... but as I said he purportedly made the majority of his money from real estate appreciation.

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05-29-2008 , 10:47 AM

#42

Mikhutt

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Originally Posted by stankpickle

You probably read this in Rich Dad Poor Dad by Robert Kiyosaki

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05-29-2008 , 12:40 PM

#43

Thremp

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Quote:

Originally Posted by guids

Def not true in the nightclub industry, in fact Id almost argue the opposite.

I'd argue that most people in the business are ******s if this is the case.

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05-29-2008 , 12:49 PM

#44

Jimbo

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Originally Posted by Thremp

I'd argue that most people in the business are ******s if this is the case.

Thremp you are correct about that but I still disagree with guids.

Jimbo

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05-29-2008 , 01:53 PM

#45

maxtower

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I wouldn't pay much more than 1-2 years net for a nightclub. Those things are super fickle. A local place is typically only really popular for a few years. You have to absolutely kill it for like 8 hours a week to pay for all the expenses the rest of the week. It seems like a terrible business to be in from my perspective. Well except for the fact theres a lot of drunken girls wandering around all the time...

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05-29-2008 , 03:34 PM

#46

Thremp

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Quote:

Originally Posted by maxtower

Theres a ton of people who get into the "business" for nothing more than the lifestyle. Open the bar up, let in some girls for free, do some yikity, bang them... rinse... repeat. So its not really shocking that there are some significant valuation problems when you really have businesses that aren't being run to make money.

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05-29-2008 , 04:12 PM

#47

Jimbo

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Originally Posted by Thremp

I found the most predominate problem when I purchased the two I owned was that the owners really either didn't know how much they "really" made or wouldn't tell but still wanted to sell. My partner and I looked at over 50 clubs for sale from Feb 1983 till Oct 1983. We found exactly two that both had real books and would show them to us.

The most common answer we got for the question of, how much did you net? Well I feed my family, pay all my suppliers pay my employees and have some money left over nearly every month. True!

Jimbo

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05-29-2008 , 05:13 PM

#48

maxtower

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Jimbo,

Since it is largely a cash business, how many of these clubs are just fronts for drug money laundering or something? I can't believe some of these places can pay the bills based on Fri + Sat night business.

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05-29-2008 , 09:21 PM

#49

Thremp

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Quote:

Originally Posted by maxtower

Since it is largely a cash business, how many of these clubs are just fronts for drug money laundering or something? I can't believe some of these places can pay the bills based on Fri + Sat night business.

Its more likely that they're making a ton of money and showing a profit of like 30k each year. Allegedly a couple of the guys I know who own places keep safety deposit boxes stuffed with cash, which is kinda weird and absurd. I've been looking at a couple other cash businesses and almost all will start to have a decent bump in income as the approach the time to sell hoping to drive up the value they'll get. Its just one of the random things that needs to be accounted for.