When you think of McDonald’s (MCD), you typically think of the world’s biggest hamburger distributor, but they are also the world’s biggest toy distributor with their Happy Meals. MCD also has one of the world's best real estate portfolios. MCD owns much of the best commercial property all over the world.
MCD earns revenue as an investor in properties, a franchiser of restaurants, and an operator of restaurants. Approximately 15% of MCD restaurants are owned and operated by MCD directly. The remainder are operated by others through a variety of franchise agreements and joint ventures.
MCD buys and sells properties. Often these are restaurant lots, but MCD will buy properties that it feels are, or will be, hot locations, and it sells properties that are under performing or otherwise not doing so well, and also sells some of those unused properties when MCD decides to build on the next block or not at all where it bought speculative properties.
Secondly, on top of the franchise fee ( usually 8% ) which McDonald's charges its franchisees to use the " McDonald's " name, it charges rent to the franchisees to use the corporately-owned properties. That’s right. The franchise is on MCD-owned property. In addition to ordinary franchise fees and marketing fees, which are calculated as a percentage of sales, MCD collects rent, which may also be calculated on the basis of sales. In most, if not all cases, the franchisee does not own the location of its restaurants.
That all sounds pretty familiar to Jehovah’s Witnesses. There was a time when the Kingdom Hall franchises were owned locally. The members owned the property and borrowed the money, usually but not always directly from Watchtower. They had a mortgage they paid off and then it was theirs.
Slowly, Watchtower changed this arrangement to be more like MCD. The local members paid the mortgage but had to send so much money for a property they would never own. But MCD owns 15% of the restaurants and Watchtower is going past that point, going for 100%. That may have a lot to do with the Watchtower being a dangerous mind-control cult where the leaders can simply tell the franchisee to turn over everything. The comparison doesn’t fit perfectly as Watchtower is changing the rules again- waiving the mortgage but raising the cost of being a franchise, carrying the Watchtower name and using their materials. So think of it as lowering the rent but increasing the right to be carrying the logo and the products.
Looking at the business model of MCD might give us some clues as to what can happen to Watchtower.
Money might get tied up in speculative properties which could get dumped when they decide not to build there. Properties that go up extremely in value may be sold and locals can move to a less valuable property. Unprofitable Kingdom Halls already functioning might be closed and members can be sent down the road to a different franchise.
Just as MCD tries to look at the changing market, and occasionally focuses less on toys and hamburgers and more on coffee/ice cream shop styles or on healthy alternatives to fried foods, Watchtower may try to focus less on literature and more on getting members to give them money for aiding their brothers in other countries or for expanding headquarters or try to make the members feel that “instant” internet access to their information is a great privilege and advancement that costs just as much as delivering paper-and-ink literature. If marketing changes don’t work, MCD always falls back on the toys and the burgers. Watchtower almost certainly will not be able to return to focusing on literature, but can always fall back on telling the members to listen, obey, and “enjoy the Happy Meal we gave you.”
The two corporations have been compared before. Any others want to add their thoughts on similarities and differences?