Video narration
People say McDonald’s isn’t just in the burger business—it’s also in the real estate business. Here’s the simplified idea. When a new location is planned, McDonald’s may buy the land or lock in a long-term lease in a prime spot. Then a franchise owner runs the restaurant, but the property is often controlled by McDonald’s. That franchise owner pays monthly rent to McDonald’s, like a tenant. On top of rent, McDonald’s also earns a percentage of the restaurant’s sales. So there are two income streams tied to the same building: rent, and a share of revenue. Multiply that across thousands of locations worldwide, many sitting on valuable corners and busy roads. And if those properties rise in value over time, the land under the Golden Arches can become an asset too. Big brand on top—billion-dollar business model underneath.