McDonald'Äôs: The Amazing Billion Dollar Method Beyond Burgers.
In fact, McDonald'\''s doesn't make much revenue from its menu. Through the first three quarters of 2023, the company generated more than $7.3 billion in revenue from something that has nothing to do with hamburgers or fries. And amazingly, it is the biggest source of revenue for the company.
Even more important to investors is that this underappreciated business model can be considered its real competitive advantage, or, in other words, moat. Harry J. Sonneborn was one of McDonald'\''s first employees and said: "We're not technically in the food business. We're in the real estate business." That's right, Mickey D'\'s is one of the largest real estate empires in the world. As of the third quarter of 2023.
The company has relatively few restaurants of its own, so you might think it doesn't have much real estate. But the balance sheet shows that it has $42 billion worth of real estate and equipment. Management understood the benefits of owning real estate long before the battle. That's why they have many locations operated by their franchisees. In return, franchisees are required to pay rent every month, in addition to franchise fees.
As noted, McDonald'\'™s earned more than $7.3 billion in rent in 2023. That amounts to
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