McDonald’s, a multinational disguised as an SME

McDonald's, a multinational disguised as an SME

“We don’t sell burgers. We’re a real estate business.” Attorney Rodolphe Boychow, who participated in the draft Collaboration ReAct (Networks for Transnational Joint Action) would like to recall the plan of American employer Ray Croke, a visionary who had the intuition to purchase their restaurant chains from the McDonald brothers regarding the practices of the American giant-Driver In 1961. In fact, if the general public had known that McDonald’s had drastically reduced its hamburgers, the paralysis of the former CEO’s genius would have, above all, created an economic model based on a real estate empire.

The group identifies the trusted land, buys it, builds restaurants there, and then puts it into rent management. Thus he gets most of his income from the rent paid to him by the operators. “Whether a McDonald’s restaurant is incorporated, owned or operated in a 50/50 joint venture, the restaurant operator formally signs a” lease management “agreement, which coordinates the customary duties of a franchise – Especially standardized food products, restaurant design, distribution requirements – related to commercial leasing ”, Describes the ReAct report. Through these deals, McDonald’s France SAS receives a 5% royalty on restaurant sales for using the brand and knowledge, and a turnover of 12% to 18%. Restaurant rental.

A devotion to the annual accounts of McDonald’s France S.A.S. Turnover continues to grow, from 694 million euros in 2009 to 1.06 billion euros in 2019, an increase of 53% over ten years. Is McDonald a happy owner?

This good growth is higher than restaurant openings (+ 28%), which went from 1,161 to 1,490, with an average of 30 openings per year. “Increase in overall revenue of all restaurants (+ 32%) During the same period McDonald’s France SAS claims to charge a higher percentage of restaurant sales than ever before. In fact, if McDonald’s France SAS invoices the same amount of royalties and rent annually, the increase in turnover of McDonald’s France SAS will be equal to the increase in the overall revenue of restaurants ”. Ask the authors of the report who estimated that these royalties could actually reach up to 28% of a restaurant’s revenue. Basically thanks for the rent. “Since the royalties paid to operate the McDonald’s system (brand and craft) must be in the same year each year in accordance with the terms of the transaction, McDonald’s can increase its revenue by increasing the invoice”, ReAct Profile.

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The convenience of McDonald’s France SAS is estimated to be around 2009 3 billion during the period 2009-2019, and then distributed in the form of dividends to its only partner, the McDonald’s System of France, a subsidiary of McDonald’s Corporation. In the state of Delaware in the United States, it is a well-known tax haven for companies looking for optimization.

Hold the participation

This is not to annoy restaurant operators. There is little controversy between management and owners (70% against restaurants, 14.5% against consolidated restaurants, and 15.5% in the 50/50 joint venture), who are sometimes former executives of the council. Despite the high royalties, restaurants make a considerable amount of money for them: an average of 200,000 euros a year. Those who pay the price are again employees (read our article “McDonald’s Bulimia for Public Assistance”), and it is far from certain that these profits will be deceived into their wallets. “Thanks to this sophisticated system of restaurant smashing, McDonald’s is making international profits, but exercising the social rights of an SME. This group must stop hiding behind these numerous small restaurants and accept its responsibilities as a large company to all its shareholders, especially its employees.”, Says Adele Lepoutray, React’s campaigner.

Restaurants may have made more than 2. 2.3 billion in profits between 2011 and 2019, most of them with less than 50 employees, so there is no requirement by law to pay for participation.

Restaurants may have made more than மேல் 2.3 billion in profits between 2011 and 2019, or over 7 187,000 per year per year and the net annual margin averaging 5.3%, which is the majority. Fewer than 50 employees (37 full average time equivalents) are therefore not required by law to pay contributions. It refers to “Lack of 1 000 Euros per employee per year ”, The co-author of the report continues. “However, there is nothing to stop a restaurant from making payments and, if it wishes, make a contribution to its staff, Comments Rodolphe Boychow. More confusing, Restaurants were merged into McDonald’s French subsidiaries, viz More than 50 Employees and therefore falling within the ambit of the law, only non-profit On average During the period 2011-2019. »

These are 100% integrated restaurants, usually operated by McDonald’s subsidiaries that generate more revenue than any other type of activity. For the rest, the integrated restaurants owned by McDonald’s France SAS are 51% better, averaging 9.1% net margin, followed by ownership restaurants (6.1%), integrated restaurants 90% (5.9%) and restaurants a 50/50 joint venture (5.8%). According to ReAct calculations, only 15% of restaurants pay employee participation.

Tax fraud complaint

A pill that is hard for some of them to swallow. In 2015, McDonald’s Oyster Parisian task force filed a criminal complaint for tax evasion. He accused McDonald’s France subsidiary of artificially reducing its profits to avoid paying dividends. A criminal complaint following investigations by the European Commission and French tax authorities into McDonald’s tax evasion practices.

“The European Commission has really underlined that the tax plan set up by McDonald via Luxembourg should not be taxed on the McDonald’s company responsible for collecting the royalties generated from sales in Europe. Does not conform to the principle of tax fairness», Recalls the voluntary charity. “We have no clear access to education, Says Rodolphe Boychow, Further There are magazines Echoes the debates between McDonald’s France and the Office of the National Financial Advocate to conclude a public interest justice contract (CJIP). It is a form of transaction in which a public interest penalty is imposede May be greater than 30 Average annual turnover%. » Taking McDonald’s France SAS (2017 to 2019) over the last three fiscal years, its average revenue was 970,338,984 euros. Thus a maximum of 30% of the average public interest penalty would mean a maximum of 291,101,695 euros. But it is unknown at this time what he will do after leaving the post.

Whatever the outcome, is this complaint likely to shake the McDonald’s system? The fragmentation of restaurants weakens union action. The creation of the 2016 Labor Act, a social dialogue system in employer networks, was repealed within a year of its enactment. “The unions are so isolated that it is difficult for them to recognize economic and social solidarity. (UES) will force McDonald to comply with corporate obligations ”, Adele completes the LBOUT tray. Proceed with several projects to open: “We demand greater transparency and statistics on the distribution of profits from McDonald’s, but we also call on public authorities to legislate for a real sharing of value added. » Meanwhile, McDonald has a textbook case of seizing profits for his own benefit.

Read today: “ McDonald’s bulimia for general help »

To be released tomorrow: “ McDonald’s, increasingly indigestible working conditions »

To be released on Wednesday: MEP An interview with Arrow Lalouk and Senator Eric Pocket.

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Cory Weinberg

About the Author: Cory Weinberg

Cory Weinberg covers the intersection of tech and cities. That means digging into how startups and big tech companies are trying to reshape real estate, transportation, urban planning, and travel. Previously, he reported on Bay Area housing and commercial real estate for the San Francisco Business Times. He received a "best young journalist" award from the National Association of Real Estate Editors.

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