There are at least a couple people in this thread that currently or previously owned stores that utilize hourly, low skill labor. How do you guys make it work? I've done the math a couple times and feel like the general franchise concept seems really hard as is. If you have to double the wages you pay, I'm not sure you would be making much at all. Wouldn't a lot of these places just go out of business? I mean, I'm rarely willing to pay $4 for a coffee as it is. If I have to pay $6 or $7, I'll never go in. It seems like losing the marginal consumer and a reduction in frequency of the primary consumer would kill these businesses.
Honestly . . . . their parents should have planned Strapped a Tennis Racket to their hands at age three Like Andre Aggasi's Parents Or Have you kid out putting in the rain like Tiger's Dad did Rocket River
I don't think many at all would go out of business. One of the things about McDonalds is that the franchise owners a lot of times have more than one store so they can spread some costs over multiple stores. Two things will happen. McDonalds will try to automate more jobs to eliminate people, something like self ordering or something. The same thing grocery stores have done with self checkout. Second, they'll raise prices. I don't find fast food to be a life necessity so I'm fine with them raising prices. If they raise salaries 50%, they raise each item... what like 10-20%? Just a guestimate. So instead of $6 for your meal you're going to pay $6.75 to $7.25? Sounds fine to me. What should happen is they should lower the franchisee fee rate or tie the percentage to profits but there's the whole pushing the stock price up motivation so that will never happen.
The franchisor makes money off of GROSS sales that are subject to royalties. The franchisee is the one who chooses the pay of their employees....not McDonald's. I don't know why there is even anything to discuss. The franchisee has to pay the royalties on gross sales no matter what their profit or loss is. The net profit margin on McDonald's franchises doesn't look to be very high either and they require a very large initial investment. Also, I had mentioned that McDonald's was largely a franchise model. I thought I had stated the rough percentage of McDonald's that were corporate owned. Thanks for clarifying that it is 10%. I read the article and I am familiar with the min wage discussion. It should go higher. I think $8.50 to $9 and then index it to some sort of inflation index. It shouldn't go obscenely higher like Elizabeth Warren mentioned. Her point is ridiculous. Are fast food workers that much more productive over the past 50 years? We aren't talking about abusive CEO pay either, so I don't know why you mentioned it. The CEO isn't running the local McDonald's franchise. The person running that franchise is the entrepreneur who decided to invest in a McDonald's franchise that McDonald's corporate is selling to them. Good luck getting franchise agreements changed to mandate higher pay. It looks like for McDonald's they are 20 years long. So how should McDonald's, the franchisor, minimize the squeezing? Do you want them to reduce royalties that franchisee's have to pay? The McDonald's franchisee is not McDonald's. They are different entities.
Yeah, that's the caveat. Because fast food isn't a life necessity, it's very elastic. Meaning that if you raise prices, customers will stop coming. They'll bring lunch, or go somewhere else, or something like that. Heck, just today, I went to Subway for lunch instead of Chipotle, even though Chipotle is better. Why? Because Subway is slightly cheaper. I've made my case in the last thread we have. If you're going to have a welfare state, it should be designed so that money from the rich goes to the poor. Welfare does this. Food stamps do this. Unemployment insurance does this. Minimum wage doesn't.
A store owner signs a franchise agreement to get a store. If that agreement stipulates a wage and price structure then they're bound by that agreement. It won't happen but it is possible. I don't know how she determined that but I worked at a McDonalds for several years and I saw first hand how they operate and how salaries were leveraged and jobs were eliminated even twenty years ago by employing new techniques that reduced labor costs. I mentioned it as a contrast between how the wages of the overwhelming majority of McDonald's employees have stagnated while the CEO's salary tripled in 2 years. It's become the new norm in America and it definitely didnt used to be so? Oh I'm not naive, they're greedy soulless assholes and they care about is profit, their salaries, and the stock price. They could do that if they had any conscience but the best way is probably through the law. Actually, if they were forward thinking at all, McDonald's would improve wages just to get the best talent and reduce turnover and the costs associated with training new people over and over again. Technically so but if you work at McDonald's you work at McDonakd's. Theyre the brand. They set the tone, the standard, and the culture.
That's fine too. Then poor neighborhoods will have real restaurants and food markets on the corners instead of McDonald's, Wendy's, Burger King, and Pizza Hut. Poor people will eat better too. Trading in the quarter pounder with cheese for real food. That's just a win win! I don't consider having billion dollar enterprises paying non-poverty level wages for work as a welfare state.
I worked and managed at one throughout high school and college. Five years at the same store. The owner owned three different stores.
There are many jobs out there that pay decent that do not require education, problem is the workers at McDonald's don't have the drive to do those jobs. A car dealership will take anyone who can speak English and shows up in a tie. Anyways for the side topic.... As a poli sci graduate.... DON'T DO IT! If you're parents have money and law is your dream, it's not a bad idea. Even then law schools prefer a more diverse degree. Anyways by the time I graduated I was tired of being a broke college kid and decided not to pursue law school. I will say having a degree helped me get my current job, but if I could go back I would major in something else. In addition to my degree I had experience in my field and minored in a foreign language. And even though it was a liberal arts degree I did graduate with honors which I imagine looked better than barely getting by with that type if major.
For the average McD.... The crew payroll is 20% of net sales. Manager is 4%. Source: Janney Capital Markets Double the salary would result in close to 50% of net sales. Easy fix. Own/Operate multiple McD's.
Do you think the "real" restaurants are avoiding the poorer neighborhoods because they can't get real estate? They are avoiding them because it isn't profitable. Having to pay their workers more and reducing competition won't get good restaurants in the poorer neighborhoods. If the ling ling data is even close to accurate, most of these guys will go out of business with a mandatory wage increase.
I don't know. Maybe the better question is why fast food restaurants flood poorer neighborhoods and the effect that has on the physical health of people who live in those neighborhoods. The normalization of a fast food diet.
Irritation of reading the predicement he finds himself in without taking any responsibility--that it's his employers fault. I know the type.
If you don't pay people a living wage, they will find a way to survive... Be it government assistance... Selling drugs... Breaking into homes or stealing ...
