Katie is an auditor, and I don't really understand what she's saying, when she talks about business. So I decided to start studying economics. Now I kind of understand what she's talking about.
In the news this week, people were holding a big protest at McDonald's. They want McDonald's to pay all its employees at least fifteen dollars per hour. That's all well and good, but there's no reason for people to protest at my local McDonald's. The one in our town is a franchise McDonald's.
From what I understand, franchises work like this. Let's travel back in time to the 1980's, when my local McDonald's was built.
Dude: Hey, I want to build a restaurant!
McDonald's Agent: Why not build a McDonald's? They're very popular and make lots of money.
Dude: Isn't that illegal? I mean, I don't own McDonald's.
Agent: It's okay. We'll let you call your restaurant McDonalds, and give you permission to use our logo and sell our food.
Dude: Wow, that's really nice of you!
Agent: In exchange, though, you have to follow all of our rules.
Dude: (reads contract) Most of these rules talk about how food is prepared.
Agent: Of course! We want to make sure the food is prepared the same way at every restaurant.
And that's how my local McDonald's was born. McDonald's doesn't directly own that particular restaurant, but they do get a portion of the profits, and they get to decide what's on the menu. (I think they sell some ingredients to that particular store, but I'm not 100% sure.) I guess it's similar to how Her Interactive makes Nancy Drew games, but they don't actually own Nancy Drew. Simon and Schuster owns Nancy Drew, and they're not selling her anytime soon.