So to summarize, you have a minuscule revenue stream. No cash reserves. And an albatross of a contract that requires you to go through a slow approval process to enact changes if they're approved at all.
Ray Kroc
Which they never are.
Am I missing anything?
Ray Kroc
That about sums it up.
Tell me about the land.
Ray Kroc
The... land?
The land, the buildings, how that whole aspect of it works.
Ray Kroc
Oh, pretty simple really. Franchisee finds a piece of land he likes. Gets a lease, usually 20 years. Takes out a construction loan, throws up a building and off he goes.
So the operator selects the site.
Ray Kroc
Yeah.
He picks the property?
Ray Kroc
Right.
You provide the training, the system, the operational know-how, and he's responsible for the rest?
Ray Kroc
Is there a problem?
A big one. You don't seem to realize what business you're in. You're not in the burger business. You're in the real estate business. You don't build an empire off a 1.4 percent cut of a 15-cent hamburger. You build it by owning the land upon which that burger is cooked. What you ought to be doing is buying up plots of land then turning around and leasing said plots to franchisees who as a condition of their deal, should be permitted to lease from you and you alone. This will provide you with two things. One, a steady, up-front revenue stream. Money flows in before the first stake is in the ground. Two, greater capital for expansion. Which in turn fuels further land acquisition, which in turn fuels further expansion and so on and so on. Land. That's where the money is.
