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  • Jim Costa

Jim’s Daily Rant. Why McYDees Hasn’t Filed Bankruptcy.

About a month ago McDonald's Headquarters announced that their business model is breaking down due to [hyper] Inflation [coming]. They will immediately lay off most of their 40,000 headquarter employees.

This was as much of a jolt to me as to the drive-in hospitality business. I was proud of them spelling it out to the world.

But for those of you who have not yet seen the movie The Founder, about Ray Kroc and his creation of McDonald's, I will give you a hint. Before I saw the movie I read in Robert Kiyosaki’s book Rich Dad, Poor Dad this event. A big school like Harvard Business School invited Kroc to talk to their MBA students. He started by saying, “My name is Ray Kroc. Guess what I do for a living. Everyone said “Hamburgers, you sell hamburgers” and laughed.

Kroc responded “No, my business is real estate. I own all the real estate the franchises have buildings on.” The franchise owners lease the real estate and pay to construct the buildings. If a franchise fails then McDonald's now owns the land and building. ______________________________________________

When I studied business survival methods during hyperinflation I discovered some businesses elect to close their doors during that period. This saves them from forced bankruptcy in trying to maintain the business during the dying spell. They can then re-start their business after the currency collapse.

Is this what McDonald's Corporate is doing? Are they going into hibernation waiting for all the franchises to fail trying to remain in business, then resurface and resell the franchises? I believe this is exactly what they are doing. It is a brilliant move to survive hyperinflation that they are making because they can make it.

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