
McDonald's is considering rent deferrals for franchisees - supdatecron
https://www.cnbc.com/2020/03/17/mcdonalds-cant-estimate-coronavirus-impact-to-its-business-and-is-considering-rent-deferrals.html
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rubidium
This sort of action is what we need across the economy. Cancellation or
deferral.

Rent deferral, interest deferral, mortgage deferral... etc.

At the individual level maybe limit it to the lower 50%-70% of income earners.
Cancel interest and utility/rent/mortgage payments for lower income
population. Do it for 2-3 months.

The upper half will just eat into their savings some but won’t suffer like
those living paycheck to paycheck.

I’m fine coming out of this with $15k less savings. Im not ok with my neighbor
becoming homeless or permanently in debt because of it.

~~~
christiansakai
Why the divide? The middle class already pays most of the taxes and not
getting the benefit as much as the lower income earner and now they are not
getting help as well? If you want to make the divide why not just the really
high upper income earner vs the rest of the population, since most people in
middle class, though they have savings more than $15k are just regular people
like you and me, with families and responsibilities.

I personally don't like it, and I think a lot of middle class won't like it.
If you want to do something like this then do it like Andrew Yang, no
questions asked to all.

I'm not a lower income earner, but I don't have big ticket items as well (not
even a car or house).

~~~
brosinante
Those poor middle classes, haven't they been through enough? They can't even
lift themselves up through their bootstraps like those deplorable "low income
earners".

~~~
LunaSea
One social program for me, but not for thee.

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hef19898
If a company like McDonalds can pull it off, that will most likely give them
quite an advantage. Once things go back to normal, that would mean McDonalds
franchise network is likely to be in omaprativley good shape. When competitor
don't implement solutios like this, McDonalds would have quite a head start!
Not to speak about the franchise owners, and their employees to a certain
extent.

~~~
0xcde4c3db
As far as I know, most fast food franchises don't own the land under the
restaurants in the way that McDonald's does. I'm not familiar with the
numbers, but I've seen quips to the effect that McDonald's is a real estate
investment firm that does fast food as a side hustle.

~~~
klenwell
That quip was actually documented quite lucidly in The Founder (where Michael
Keaton plays Ray Kroc). I really enjoyed that film.

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larrywright
This is a good move on their part (assuming they go through with it). People
tend to think of restaurant owners like this as “the rich”, but if you look at
the numbers there’s actually not that much profit in a single restaurant. The
only ones who make good money own a bunch of them. Even then, the profit
margins are pretty low, and they’re going to struggle to remain profitable.

~~~
AmVess
You have to have a lot of money and a track record of success before
McDonald's will consider taking you on as a franchisee. McDonald's franchisees
are wealthy before they open their first restaurant.

~~~
larrywright
It depends. A lot of them start out with a couple of restaurants and then work
their way up. At least that was the way it worked years ago. But you’re
somewhat correct at least, they’re picky about who they give franchises too.
They’re also somewhat unique amongst the big restaurant franchises in that
they limit the number of restaurants you can own. They want hands-on owners,
and they actually require the owners to be trained on every function in the
restaurant.

Source: I worked for a local franchisee about 30 years ago, and still know
them casually.

~~~
AmVess
It doesn't depend. You need a lot of cash to open one, otherwise McDonald's
will not consider you.

~~~
larrywright
I’m not disagreeing with you, I’m just saying there’s a difference between the
capital needed to buy a two store franchise, and a ten store franchise. But
yes, neither is pocket change.

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jkestner
Next, it would be good if they would also cover the 90% of McDonalds workers
who aren’t their direct employees. Pretty weak to say they can’t tell
franchisees to follow their policy, and help cover the costs, when they can
dictate how to run most other aspects of the business. Critical especially
since these 500K workers are likely to need the income, and become a vector
for the spread of the virus.

[https://www.eater.com/2020/3/16/21181862/are-mcdonalds-
starb...](https://www.eater.com/2020/3/16/21181862/are-mcdonalds-starbucks-
and-other-chains-offering-paid-sick-leave-for-coronavirus)

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linsomniac
I suspect basically all commercial landlords are going to have to consider
rent deferrals or outright eating 3-6 months of rent. The alternative very
likely could be the majority of their properties simply becoming vacant, which
isn't a good business stance for coming out of all this.

~~~
bequanna
This kind of thinking astounds me.

What kind of margins do you think landlords are making so that they can afford
to ‘eat’ 3-6 months of rent?

~~~
fgonzag
He's saying if they don't, they will have to eat those rents permanently.

~~~
linsomniac
Well said.

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wegs
Without voluntary deferrals, we'll see cascading defaults.

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akeck
For context, McDonald's Corp buys the land (and building?) for each location.
Franchisees then rent those from the McDonald's Corp in addition to their
other franchise costs. Not all restaurant franchises work this way, as far as
I know.

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BubRoss
The actual title is:

"McDonald’s says it can’t estimate coronavirus impact to its business, it will
consider rent deferrals for franchisees"

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ukabwlsbeux
Now would be a good time for a general rent strike until the government steps
in to help small businesses

~~~
JadeNB
> Now would be a good time for a general rent strike until the government
> steps in to help small businesses

If we're talking about the US here, 'until' seems to be an optimistic
presumption that our government has any intentional of helping small
businesses.

~~~
ryanmercer
>If we're talking about the US here, 'until' seems to be an optimistic
presumption that our government has any intentional of helping small
businesses.

There are dozens of articles of Trump taking something to congress today
apparently to do just this

[https://www.chicagotribune.com/coronavirus/ct-nw-
coronavirus...](https://www.chicagotribune.com/coronavirus/ct-nw-coronavirus-
trump-economic-stimulus-20200317-zpsv5weei5gexphfrbog6g2eyq-story.html)

>Mnuchin planned to outline that roughly $850 billion package to Senate
Republicans at a private lunch, with officials aiming to have Congress approve
it this week.

and

>“The Senate will not adjourn until we have passed significant and bold new
steps above and beyond what the House has passed to help our strong nation and
our strong underlying economy weather this storm," McConnell said.

~~~
JadeNB
Ah, good point. Pandemics make even ISPs and Trump seek to be seen to be
acting in the public good. (But not Charter, and not hoarders.)

~~~
ryanmercer
Yeah, politicians need voters to not completely hate them so they can get re-
elected. Imagine if instead politicians were selected by lottery, served
shorter terms, and had their appointments staggered.

I wonder if any authors have given this a shot in fiction, I'd read it.

~~~
JadeNB
Well, there's
[https://en.wikipedia.org/wiki/The_Lottery_in_Babylon](https://en.wikipedia.org/wiki/The_Lottery_in_Babylon)
, but not in the realistic spirit that you probably intended. (There's also
HHGttG's
[https://hitchhikers.fandom.com/wiki/Ruler_of_the_Universe](https://hitchhikers.fandom.com/wiki/Ruler_of_the_Universe)
, again in a different spirit.)

~~~
ryanmercer
The Lottery in Babylon sounds worth a read, thanks!

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Simulacra
The least they can do. I was thinking of all of the strip mall style mom and
pop places, and how rent and such would affect that. I cannot imagine a
landlord evicting tenants any time soon, because who the hell is going to then
rent the space?!

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starpilot
Title has blatant typo for past 2 hrs.

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yownie
FORE!

