My immediate reaction when I read this article about fast food workers wanting to unionize and striking against the stores that employ them was “I wonder if they realize that they’re striking against the wrong people?” Most McDonalds stores are franchises, owned and operated by the franchisees. Here’s a typical income statement for an average McDonalds store, compiled by Janney Montgomery Scott restaurant analyst Mark Kalinowski:
As you can see it’s a high volume/low margins business. If the workers are striking for just a 10%, an $.80 an hour, raise, that’s a third of the present operating income. $1.60 would be two-thirds. Obviously, the only way for the franchises to raise wages is to raise prices, too, which in turn means that the volume will probably go down. Since fairness seems to be the watchword these days, what’s fair?
The people making money are the McDonalds Corporation and, probably, the landlords.
That girl can rock n’ roll.
“9 to 5”
Rally on.
Osmosis is an interesting phenomenon. It’s a pump though the cell walls.
That’s big science.
Can you possibly resist Dolly Parton’s call?
Or we’re both psychotic. How much money doe she have now?
My late husband and I are liberals. Y’all got a problem with that?
You have a problem with that? I will remind you:
Bambi Meets Godzilla
I can’t say that the production values are all that great.
I have come. Take that as you will.
Nevah fuck with me, son.
or daughter.
Scares hell out of me.
And I lived with the man for nearly 20 years. The man, Mind.
We’re talking boots.
http://youtu.be/BdJgwf-_HGY
He’s perfectly prepared to kick your ass.
Did mine.
And he loved me.
So I suggest being very careful, rabbit.
Drew, are you there?
Which way do we go now?
Which way do we go now? Sweet baby of mine.
Women are such a drag.
Wives are such a drag.
She reminds me of my Mother.
Turn out the lights, the party’s over.
Time to go to Dallas.
@Janis Gore
It looks like you have been up all night. I hope you are not driving.
@Janis Gore
I once made it from New Orleans to Spring, TX (north of Houston) in a little under 4 hours. We were late for a wake, and it is the only time my wife did not b*tch about my driving.
@Dave, I think my linked study supports the view that the corporation controls pricing, it was just interesting to learn how they go about doing it. The one dollar menu items can only do regulate price if the customer is very price sensitive, so maybe they should be striking against the customers. L.A. bans new fast food restaurants in poor areas like South L.A., which presumably means In-and-Out Burgers are out and the poor residents will have to learn to pay more for burgers.
Two other things in the link I found interesting. One, the McD corporation owns all or most of the real estate, so they are the landlord. The corporate interest is protected by the value of the real estate and a franchise that closes can be replaced with a new one.
Second, franchise owners purchase their food through competitive means. They are not required to purchase from a single corporate source, but have alternatives, which is presumably intended to keep costs low.
Not exactly. At least in the case of McDonalds although the corporation doesn’t sell the franchises food directly, the franchises are required to purchase the food they sell from approved third-party vendors. That restricts competition and is another method of indirect control by corporate.
The last Burger King I walked into (earlier this year), I walked right out of and went to the McDonald’s next door. The BK was dysfunctional, understaffed and depressing. I think BK is failing; its fallen behind Wendy’s in total sales. McDonald’s somehow has been able to keep prices low, while improving the quality of the food and updating its buildings.
@Dave, it does appear that the third-party vendors can compete with each other on price for franchise purchases, though that may be very substantially limited by the corporate requirements. I just thought it was interesting and would have assumed franchises would be required to purchase the food at set prices. Also, thought it was interesting that the rent charged by the corporation is based upon sales, not a flat rate.
@michael reynolds
With the trends in publishing physical books, magazines, and newspapers, you may soon have first hand experience of a low profit, high volume industry.
If I understand you correctly, the problem with newspapers is that they do not pay enough to attract the good writers, editors, etc. This leads to crappy articles, and disgruntled workers are encouraging customers to not purchase the paper or giving them away (username/password).
Here we agree.
@PD Shaw
… updating its buildings.
McDonald’s will tear down and rebuild its stores. In addition to the overall appearance and cleanliness, it creates a “buzz” during the process. It usually only takes a few weeks, but when it re-opens, it is as if it was never there.
Tasty:
I have no useful insights on the newspaper business. Ive free-lanced for papers on occasion – long ago. Both were evening papers and not surprisingly both went belly-up. (Not my fault, I don’t think.)
Like everyone in book publishing I’m trying to figure out what’s happening, and all I know so far is that established patterns have persisted longer than I expected them to. I consistently overestimate the speed at which people will adapt to new situations.
But publishing is uniquely (or maybe not so uniquely) data-free. Only recently did we discover that as much as 50% of readers of “young adult” books are older than the target demo. In other words we had no idea who was buying books. It’s a fairly astounding degree of ignorance, and it may be one reason why Amazon has successfully challenged publishing, forcing (so far) the Big 6 to become the Big Five (Random/Penguin merger) and soon the Big 4 (Simon and Harper are talking merger.) In the end it will probably be the Big One (Amazon) and the Three Pygmies.
How the details all shake out we won’t know until Jeff Bezos tells us.
My local newspaper just unionized. They say its not for the $, but to protect quality. We’ll see how that goes.
What in the world is with this comment thread?!
As far as we can figure, Dave is trying to boost his numbers by paying Janis for each comment.
Ah, so that’s their “business model.” http://www.reddit.com/tb/1436mw
Well, James, one explanation is that my brother dropped me off at a Waffle House in Terrell, TX, home of the state mental hosipital, ie, that the girl done gone round the bend.
He left me to make my way to the facility proper — he didn’t have the heart to just drop me off at the door.
And TB, I drive that purty white Infinity G37 acoss Louisiana to Longview, TX. That’s a fine little steed there, but the seat kicked this cowgirl’s butt but good. I had to bathe in Dead Sea salts when I finally made it to my sister’s house.
I better hunt for a hemorrhoid cushion if I plan to drive it any distance back home.
If any of you happen to turn up in Longview, make it a point to eat at Johnny Cace’s. What a great New Orleans style restaurant. Attractive atmosphere, friendly atmosphere and superb food that they virtually give away. It’s on HWY 80.
That would be friendly staff.
“Give me my Tahoe, or give me death!” or Percocet, or something. Demerol, that’s the ticket!
Maybe just a six-pack of Shiner Bock.
No way I could hold up my BIL’s bikes, but he’s added a sidecar to the big Harley.
The seat looks a lot more comfortable than the Infiniti’s.
Fast food jobs are entry level and there is no advancement beyond head burger flipper. These jobs need a high turnover rate. Anybody who is trying to support a family by being a burger flipper is not going to be a content worker. It does not matter what they are paid. These are dead-end jobs, and with the exception of managerial positions, these jobs are designed to be filled by non-skilled workers. Product consistency is a major goal of a fast food chain, and these jobs need to meet that goal.
Eating fast food was once a treat, but now it has become a regular dining option. This creates several problems. Most people do not want to eat the same thing every day, but the chains were designed to serve the same thing every day. They are now competing against the upper level fast food chains for service, but they were designed to be fast and cheap. Serving food quickly tends to lower the quality of the food and service.
For a long time, BK and Wendy’s had no breakfast options, and this has hurt them beyond the fast food breakfast market. Most people getting breakfast at McDonald’s do not want much variety, and for take-out, they accept that several menu items are going to suffer if not eaten quickly. The additional advantages of breakfast is that customers are exposed to new lunch and dinner menu items, and the breakfast customers will have higher brand loyalty.
Walmart has a similar problem. They once decided to compete for women’s clothing purchases, but they were trying to tap into the higher end market. They came out with a “designer line”, but it failed. The problem was not price. It was the shopping experience, and Walmart cannot reproduce it.
The chain business model is losing its relevance. Customers have changed, but they cannot easily change if it is even possible. Newspaper and magazine are affected also, and increasing the worker’s pay is not going to fix their problem. Book publishers are going to be affected by ebooks, and they will begin to cut wages as a solution.
@
I think we were in a Camry for that trip. There were some layout issues, but the top end acceleration made up for them. It could go from 95 to 110 in nothing flat, and the handling was outstanding.
I’ve lined up Michael and Katherine’s next series — Galactic Cowgirl.
It should be a doozy.
A YA riff off “Even Cowgirls Get the Blues” from Tom Robbins. In fact, they might need to speak with him first, so as to not be sued.
The Infiniti was really fun to drive, but the seat needs a lambswool cover or something. The seats have ridges parallel to the thigh, and my slender buttocks were about beaten raw.
I’m taking ibuprofen, too.
The damned camel saddle was more comfortable.
James, I have not only lost my husband, but I have been mentally assaulted by my stepsons, deprived of my work and income, and forced to deal with apathy, indifference and ineptitude at the highest corporate levels. My mind and my emotions are utterly shot.
However, I am now ensconced with one of my favorite people and her fun husband and will be treated like a queen for a couple of days, in a cozy Texas cottage in the countryside.
Sunday we will attend a Christmas party thrown by the last sapient aunt and uncle from either side of the family. I’ll see my nurse SIL there and THAT brother (there are five) and cousins I like but haven’t seen in decades.
My mind may not be irreparably lost after all.
OT- Any thoughts on the Unz article?
Steve
Yeppers. It looks pretty inane to me.
Duh. People are pissed off because they aren’t getting any respect for their dignity or their labor.
Wonder where I heard that before?
My BIL has a Sig Sauer 229.
Mothers of all kinds and temperaments have noticed a generational glitch that puzzles us.
I was talking to a dog rescue worker in Wylie, TX yesterday. Just two days ago her husband told his two daughters, 26 and 31, that the dogs at the rescue center treated his wife better than they do.
Nearly everyone I know has at least one, step or natural. It’s nuts. These people do not honor a moral code. Now why their ages roughly coincide with the Reagan era, I do not know.
My elder is something of outlier. A genuine son of a bitch. I should know, because I’m the bitch.
Maybe not. He was born in 1967, turning 20 in ’87. Pretty damn close, hunh/ The generation of which I write has an extraordinary sense of entitlement to wealth and privilege, and wouldn’t have a pot to piss in but for mama and daddy. Mr. Ryan, anyone?
Of course, that boy has his pretty blonde wife, too.
That would be your current managerial class.
My Sig is a 220.
Steve
Now then, Michael, the title of the first volume in the series is “Escape from the Tropic of Cancer” co-written by ghost writer Henrietta Miller.
@Janis Gore
Many parents want to be friends with their children, and they treat the parents like their friends. Respect is earned, but you need to want to be respected. Many of these children have never been told “no”.
This is also a problem throughout society. At the workplace, managers do not want to be the “bad guy”, and it is the same for politics. I find many people who have never been told “no”. I guess most people make-up some excuse rather than say “no thank you”. The look of confusion is the tell-tale sign. I try to be firm but polite.
I have a Sig P220, but I prefer the Ruger SP101 (.357).
@TB
Oh, I think people are quick enough with the “nos”. They have a much harder time with “that’s morally wrong.”
Tell me a little more about that Ruger.
Cousin L was at the party. She has a near 40 year old male “beast”, and lost her lovely, good-hearted Downs daughter about 15 years ago to heart problems.
Wow! The Ruger is my favorite. I am really a wheel gunner at heart, though my eyesight is kind of going and my groupings are so-so now. With less time, shoot pretty infrequently and bad habits come back. Also have a little Buckmark for plinking. No long guns now.
Steve
@Janis Gore
The Ruger is a five shot snub nose .357 revolver (model 5720). It has fixed sights and no hammer spur. It can only be fired double action, but if you practice, you can get it to the cocked position before firing. I got it for personal protection, and the spur can get caught when you are pulling it out. I can put it into my back pocket, and you would never know I had it.
I have a Ruger as well a .357 stainless with a 6″ heavy barrel. Not very practical, but fun for the range. Haven’t gone in ages though. My only other gun is another Ruger – a 10/22.
What an informative site you keep, Mr. Schuler!