Anyone who has read biographies on the life of McDonald's Corp’s (NYSE:MCD) Ray Kroc or seen the movie “The Founder” is aware that the fast food giant is less in the hamburger business than in the real estate business. Ray Kroc made his fortune on that assumption. He ran with it, wrestling the company (depending on who is telling the story) away from the original founders, the McDonald brothers in San Bernardino, CA.
Even former McDonald’s CFO Harry J. Sonneborn, who died in 1992, publicly validated the strategy, which had become its worst-kept secret. Sonneborn was quoted as saying, “We are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us our rent.”
