McDonald's Big Secret...

Posted on March 29th, 2011

McDonalds is a real estate company. And here I thought McDonalds sold burgers. Well, I recently read an article that changed my perspective.

The article explains that McD’s has a subsidary company, Franchise Realty Corporation, that not only makes money from speculative land deals and the brokering of established restaurant lots, but also reaps profits from it’s franchisee’s by being their landlord.

Some stock speculators believe that, in part, this subsidiary company makes McDonalds stock a good value, as it is not as susceptible to the downturns in the market because of the diversity in its income streams.

What do you think? Should a company just stick to “what it does” (i.e., what it markets itself as), or is it a good business decision to get into real estate buying/selling/developing no matter what else it is that you do? Does it depend?

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