Case 08 — McDonald's · Ray Kroc & Harry Sonneborn · 1956

Your franchise royalties barely cover overhead. Where does the money actually come from?

You are franchising the McDonald brothers' restaurant system across America. Growth is fast, but you are nearly broke: your cut is a 1.9% royalty on sales, of which 0.5% goes back to the brothers, and franchisees resist any price increase. Your CFO, Harry Sonneborn, has been looking at the numbers and says the restaurant business will never make you rich.

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