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 button below, and subscribe to the
Minority Mindset YouTube channel, that way you don’t miss any videos every single week.
Oh and uh, make sure you hit that little bell too, that way you actually get notified,
when our new videos are released. 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 who are interested in
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HUSTLIN’ *