What's up everybody, I am Jaspreet Singh, and welcome to the Minority Mindset.
POP QUIZ! What is McDonald's moneymaker?
Cheeseburgers? Nope. French fries? Hmmm, Close, but no. Funny face
pancakes. Uuh no, that's IHOP. It's their real estate. Let me let you in on a
little secret. Come close, they don't want you to hear
this. McDonald's isn't actually in the Burgers and Fries business. What do you mean
Jaspreet? Mmm, I haven't had fries in a long time. Yeah, they sell burgers and
fries, but they have a little secret business model, behind their burgers and
fries, which allows them to bring in the big profits, and even bigger tax breaks.
But, before we get into how it exactly works, make sure you hit that thumbs up
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Okay, so the truth is, McDonald's is a real-estate company that sells burgers.
They sell you burgers, this way they can grow their real-estate empire. If you've
seen the movie The Founder—which talks about the growth, and the birth of McDonald's—you
might remember the scene where Ray Kroc, who is known for growing McDonald's, is
told: Ray, you don't seem to understand what business you're in, you're not in
the burger business, you are in the real estate business. You don't build an
empire, off of an one-point-four percent cut on a 15 cent burger. You build an
empire, 42 by owning the real estate, upon which the
burgers are cooked. And that's, when McDonald's shifted from the burger
business, to the real estate business. Here's how the business model works:
McDonald's creates their favorite products, you know the Big Mac, the fries
the McFlurry, not so they can sell you these things that make 25 cents, they
make these things, this way business owners and investors start salivating. No,
it's not because they're smelling the fries. When business owners and investors
see the long lines at McDonald's, they get excited, because they want to invest
in, and get a piece of the action. And, that's when the business owners, the
investors, and the entrepreneurs, they go to McDonald's, and
just say: hey! is there any way we can get in on this Mc-action. And, then McDonald's
will say something like: Ha, that is a great idea mr. or mrs. entrepreneur, and
you know what, we'll let you sell our food, our products, and the name. All you
have to do, is pay us a small percentage of your sales, and you know what, because
I like you so much, I'll even build you your own McDonald's franchise, this way you have nothing to worry about.
But, here's the kicker: This new entrepreneur can't just go, and
open up this McDonald's franchise anywhere they want, the McDonald's
Corporation gets to decide that, and McDonald's will only want to open up
restaurants, in areas, where there's a whole lot of demand. You ready for the
best part? McDonald's, the corporation, will then find you an amazing location,
and they will build you your property, and they'll get everything systemized, and
ready for you to go this way you can sell a whole bunch of, you know, happy meals, and
then you, get to pay McDonald's, the corporation, rent forever, because you are
using their real estate. Hmm, that's one smart happy meal. Maybe they should start
teaching financial literacy, instead of giving games in their happy meals.
Let me diagram this out, because this is big. So over here, you have McDonald's, the
corporation, and McDonald's creates their Mc-menu, with their burgers, fries, and
everything in between— you know gotta make the burger look good—
and then you come in, as the entrepreneur, the investor, the businessperson, and you
want to open up your own McDonald's store, this way you can get in on the
action. So, what you do is, you are going to pay McDonald's tens of thousands of
dollars as a franchise fee, this way you can open your own McDonald's restaurant.
So, then McDonald's will open up a McDonald's restaurant for you, and then,
you are going to sell these burgers, and every time you make a sale for these
burgers, you're going to pay McDonald's a little royalty, because you're selling
the McDonald's menu, and then no matter what happens, you are going to have to pay
rent to the McDonald's Corporation, because you are using
their real estate, and so now this process repeats itself, and it repeats
itself, and now, you have over—thirty seven thousand McDonald's locations
across the country paying McDonald's rent. See, McDonald's is using burgers to fuel
their real-estate Empire, which is their real business model. As long as people
are buying happy meals, and Big Macs, business owners, and investors will want
to come in, and open up their own franchise. So, this allows McDonald's, the
corporation, to buy the most prime-time real estate in the world, and they will
have guaranteed rent, with no vacancies, and a tenant they trust. The royalties
from the burgers are just the Mc-frosting on top. Plus, on top of all of
that, this real estate business model allows McDonald's, the corporation, to
make millions, and millions, and millions of dollars from rent, and pay almost no
money in taxes legally, because real estate investors get tax breaks. Now,
don't get me wrong, most McDonald's franchisees are still
making good money. Hopefully these franchise owners are using their profits
to build their own real estate empire, but you have to understand that the
corporation needs the franchise owners to be profitable, this way more
business owners, and investors will want to come in, and open up their own
McDonald's restaurant. So, while the majority people think of McDonald's as
over 99 billion burgers sold, I want you to think of McDonald's as over 37,000
tenants worldwide, with not a vacancy in sight. Now, you can kind of see why
McDonald's has such a successful business model. The burgers and fries are
almost like McDonald's side hustle. And, this is why I keep hammering home the
idea of real estate investing, because real estate brings you consistent
passive income and tax breaks. Now, while McDonald's is doing this on a massive,
massive scale, this is something you can be doing too, by modeling what McDonald's
is doing. You don't have to sell your own burgers and fries, but you can start
acquiring your own real estate to start generating passive income, while creating
tax breaks. I made a couple of videos showing you how to do this, even if you
don't have a ton of money to start, and I'll link those videos for you in the
description below. Now you know why McDonald's keeps saying:
♪, I'm loving it. They love this real estate game. And, for those of you
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