Re:WeWork’s CEO Makes Millions as Landlord to WeWork
by unreal37 on Wednesday January 16, 2019 @01:02PM
(#18923172)
Some people say that McDonald's Corp is not a restaurant, but a real estate company. They get other people to own and run the restaurants, but they buy and lease the land to them at a profit.
So how is this different than WeWork's CEO owning the building and leasing it to WeWork?
He's essentially acting like Ray Kroc.
Re:WeWork’s CEO Makes Millions as Landlord to WeWork
by telotortium on Wednesday January 16, 2019 @01:30PM
(#18923480)
In that case, McDonald's still owns the real estate, not Ray Kroc. Here the interests of the corporation and Ray Kroc (as shareholder of McDonald's) are aligned - McDonald's has no incentive to overpay for the real estate, because that would reduce its profits.
Re:WeWork’s CEO Makes Millions as Landlord to WeWork
by CalChris on Wednesday January 16, 2019 @01:35PM
(#18923535)
Did Ray Kroc personally buy real estate and then lease it to McDonalds to sublease it to franchisees? Was he on both sides of the transactions, leasor as owner of the property and leasee as CEO of the company signing the first lease?
Re:WeWork’s CEO Makes Millions as Landlord to WeWork
by l33tbro on Wednesday January 16, 2019 @02:31PM
(#18924163)
McDonald's are basically profit engineers. There franchisee terms here is Aus:
• 20 year minimum lock-in for franchisee.
• A monthly service/royalty fee based on a percentage of the restaurant’s gross sales (currently 5%).
• A monthly rental being a fixed base rent and a percentage of the restaurant’s gross sales
• A monthly advertising contribution of not less than 4% of gross sales.
• All Outgoings including rates and utilities.
Also a metric butt-tonne of start-up costs.
A CEO being the landlord strikes me as a big potential conflict of interest. For example, if the company needs to move to a larger space to grow, the CEO might want to delay to avoid losing income. Perhaps the company might have a prospective buyer who'd want to relocate everyone to their campus. In that case, there would be an external incentive for the CEO not to make the deal.
Why wouldn't levandowski just employ his own company to supply components he was procuring for Google?
The way this used to work, is that the employee would become aware of a market need because the current company had that need and would be a great customer, so the employee spins out her own business, then leaves to run it.