The Pareto principle (also known as the 80-20 rule,[1] the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.[2][3] http://en.wikipedia.org/wiki/Pareto_principle
It costs about $3 or $4 to make a pizza and they re-sell it for $15-$20. Thats alot of profit to make and recycle back into the business. I used to live in a very small town of 10,000 people. In 20 years I saw every business in that town close up at least once except round table pizza and mcdonalds. In fact, im not sure I've ever saw a pizza place go out of business, unless it was really really hidden from the public.
A friend of mines dad owned a bunch of mcdonalds, the margins are crazy. McDonalds margins are even bigger than the pizza industry, it costs about 10 cents to make a cheeseburger they sell for a buck, or else 1 cent to make a soda which they resell for over a buck. The biggest cost in a fast food soda is the cup.
what about the rent and $1mm loan he needed to buy a mcdonalds franchise? when you consider those costs, the margins aren't as crazy as you say. and no, it doesn't cost 1 cent to make a soda. did you consider how much those machines cost to buy and maintain? perhaps you think that making a soda is just CO2, tap water and sugared flavoring.
Obviously i understand all these costs, im not an idiot, i was merely pointing out the margins in fast food vs. pizza, you got to settle down bill nye. You arent a genius, what you are pointing out is common knowledge to most people.
I'll point out thought a big difference between pizza and fast food. Fast food only has value because it is FAST. That FAST comes at a cost. McDonalds does not sell every hamburger it makes. Not even close. They waste a lot of food. Food that never gets sold but tossed in the trash. If they try to make it fresh and improve their margins, then they lose the speed. So there is a trade off between speed and margin. Pizza places don't waste food. They are made to order. Also the dollar margins are substantially higher. It caters to feeding the whole family, not just a single person. Another thing I'll point out is that most franchises, McDonalds included, you have to buy your food from them. They mark all that shit up. Benefits the company itself, but not the franchise owner. There is also fuel costs, insurance, payroll, etc.
Another point, when they tell you to paint or remodel or need an upgrade to look fresh, not negotiable. McCafe cost 100 grand to install.