Re:Ask HN: What did you do when you suddenly got rich?
by jaclaz on Thursday August 01, 2019 @12:44PM
(#20585630)
>Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it.
Yep, the whole point is that "they" decide (and can calculate at the third decimal point, remember it is "their" business and "they" have decades of experience in it) how much is what you bring home.
A "franchise" is also the closest thing to being between a rock and a hard place, you have more or less fixed prices (sale prices) and fixed (by them) costs, the only variables you can somehow manage is volume of sales (and it depends mostly or more than anything else on location) and personnel costs (which is anyway in most countries regulated by Law).
McDonald's, franchise or not, counts. Though to my understanding, they're not doing the franchise model as much anymore and are managing it themselves instead.
The linked article supports my view and is actually a little more profitable than expected. It quotes 20% net profit, which is amazing when most of the restaurants I see make close to 0% net profit.
Franchises add quite a lot of value. The hardest things in running a restaurant are marketing, product development & training, and supply chain. They supply all of these. If you want 'passive' income, franchises are the the closest thing to it.