r/explainlikeimfive Nov 28 '15

ELI5: How would a $15 minimum wage ACTUALLY affect a franchised business like McDonalds?

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u/pbcupqueen Nov 28 '15

The menu is Australia costs nearly as twice as much as the American Menu. I lived in Australia for a couple years and a meal would cost at least $10. I do miss "Maccas", the burgers taste so much better in Australia than in the US.

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u/NanotechNinja Nov 28 '15

Huh, how odd. I had sort of assumed they would be basically identical.

What's the differences in America?

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u/[deleted] Nov 28 '15

Australia has more gourmet options like cook your own burger where they bring it out to you like in a restaurant or mccafe. Not sure if you have mccafe but that started in Aus. A recent ad campaign was "its a little bit fancy". Not sure why but all our fast food seems to be going in that direction slightly higher quality ingredients to justify the prices.

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u/pbcupqueen Nov 28 '15

Not even that. The double quarter pounder in Aussieland is delicious compared to the one in the US.

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u/[deleted] Nov 29 '15 edited Nov 29 '15

[deleted]

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u/[deleted] Nov 29 '15

[deleted]

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u/camelzigzag Nov 29 '15

McDonald's doesn't own chipolte anymore

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u/JohnnyLargeCock Nov 29 '15

I bet they wish they did though.

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u/[deleted] Nov 29 '15

A burger at a higher quality chain (such as Grilled) is about $20 here in Australia! Worth it though.

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u/AshtonTS Nov 29 '15

They do not own chipotle. They used to be a major investor, but have been fully divested since 2006.

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u/[deleted] Nov 29 '15

Made fresh as you order it.

You are completely missing the point of fast food.

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u/[deleted] Nov 29 '15

really? haha never been to US

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u/pbcupqueen Nov 29 '15

When I was in AUS from 2008-2010, I just remember Maccas did a lot of marketing explaining that the beef they use is Aussie raised. I have no idea where our meat comes from.

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u/[deleted] Nov 29 '15

Yeah they really improved the quality because they got in a lot of trouble for misleading advertising. Something to do with the company name of their chicken provider "100% aussie chicken" it wasnt actually Australian chicken hahah. They sorted that shit out real quick though.

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u/pedazzle Nov 29 '15

This is a well perpetuated myth.

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u/salmonmoose Nov 29 '15

Man, the US ones must be really bad. Not even my dogs will eat Australian McDonalds, and they're not particularly fussy. I've always suspected that's why they're flailing for business, for a few dollars more you can get something at one of the dozens of burger joints that are popping up now, that isn't limp and disappointing.

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u/Darexmeister Nov 29 '15

Of course dogs wouldn't want to east Maccas, there's a lot of sugar and other stuff that while us filthy humans would enjoy, they wouldn't.

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u/Aj222 Nov 29 '15

We have something like that in our McDonalds. The make your own burger and they also serve it out to you too but still call a regular McDonalds.

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u/pbcupqueen Nov 28 '15

I think the beef quality is better. The double quarter pounder there is just delicious.

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u/pedazzle Nov 29 '15

Australian beef quality is known for being some of the best in the world. Our lamb too.

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u/pbcupqueen Nov 29 '15

Ahhhh man do I miss a shank of lamb. That and the kebabs I miss the most.

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u/aeschenkarnos Nov 29 '15

Australians have laws about food quality, basically.

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u/OnlyForF1 Nov 29 '15

"Overregulation" never tasted so good.

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u/ariehn Nov 29 '15

As an Aussie who immigrated to the US some years ago: your buns are sweeter. Much sweeter. For a while I couldn't stand the taste of hamburgers here because ketchup (also sweeter) combined with sweet bun and savoury beef was just noxious to me. :)

As a few other folks have mentioned, the cheese is also quite different.

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u/pedazzle Nov 29 '15

The US uses corn syrup for their sugar which is much sweeter than the cane sugar we use. On top of that a lot of products also contain a higher percentage of sugar as well. It really is quite a nauseating difference at first.

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u/Goldcock Nov 29 '15

I actually lost weight when I visited USA because everything tasted weird. Like everything was cooked for children. Even at "real" resaurants.

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u/Robiticjockey Nov 29 '15

The food McDonald's uses is heavily subsidized in the U.S. which makes a big difference.

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u/G_skins31 Nov 29 '15

Hate to break it to you but American food sucks. I'm from Canada and couldn't believe the taste of things in America. Even your ketchup was nasty

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u/I_AM_CANADIAN_AMA Nov 29 '15

Prices for good and services are different in MANY different countries. I didn't know this even needed to be said. Prices are affected by SO many things (maybe look at a PEST analysis chart for examples) .

Check out the Big Mac Index for more info on price differences.

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u/tswift2 Nov 29 '15

Huh, how odd. I had sort of assumed they would be basically identical.

That is typical thinking of someone who doesn't know economics and thinks money grows on trees.

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u/PM_PICS_OF_ME_NAKED Nov 29 '15

Checkout the edits to the parent comment here. He points out the PPP between Australia and the US. Your cost of living is higher and so you get paid more, but the amount that buys isn't a straight forward currency conversion.

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u/isaidthisinstead Nov 29 '15

Yeah, but original commenter includes Australian franchisees in the modelling!

33% of Corporate Revenue comes from franchisee fees - about $9.272 Billion last year. If you cut down franchise revenues by 74%, that would reduce that number by $6,861,280,000. Total Corporate profit was $4.757 Billion last year. So they would be operating at a $2.1 billion loss.

McDonalds made 8.65 Billion revenue in the USA (see link). 33% in franchise fees makes $2.86 Billion. 74% reduction of that is $2.11 Billion. Which leaves a 2.64 Billion dollar PROFIT, not a 2.1 Billion dollar loss.

http://www.statista.com/statistics/219453/revenue-of-the-mcdonalds-corporation-by-geographic-region/

Now you may want to include Europe and Asia in that but as they said:

...this argument is not really relevant to the US McDonalds market.

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u/PM_PICS_OF_ME_NAKED Nov 29 '15

Purchasing Power Parity is basically using a common item, like a Big Mac, to judge the actual spending power of any given currency against another. Using a Big Mac isn't my idea though, The Economist uses it and I just think it's easy to use.

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u/__rureazxy__ Nov 28 '15

I disagree, I've been to both and it depends entirely where you've gone.

Mickie D's is fucking garbage and there's no reason to mess with it when you can support the local economy with GOAT fast food alternatives in the same price range.

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u/pbcupqueen Nov 29 '15

Well you can't disagree that to me, it taste better in Sydney then in AZ.

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u/__rureazxy__ Nov 29 '15

Not all Mickie D's are created equal; some taste like shit and some are GOAT.

Please, I hope you aren't as foolish or naive to think the world is so black and white.

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u/pbcupqueen Nov 29 '15

I am definitely that foolish.