FINANCE THE HUNGER GAMES It’s 3am and you’re down with a serious case of hunger pangs, what do you do? Don’t lie, we know you’re not going to cook. You’re going to order from McDonald's, Wendy's or a fast food joint that can deliver as quick as possible. Weakness kicks in and the diet flies out the window, that’s precisely how the founders of these fast-food eateries make their billions By Meryl D’souza 14 EQUITY
FINANCE The city of Mumbai is generally referred to as India’s financial epicentre. The city that changed its name from Bombay to Mumbai over two decades ago is built on a peninsula that narrows sharply at its southern tip, a geography not dissimilar to Manhattan. The heart of the city’s financial district is Nariman Point where money makers have no time to talk, let alone have lunch. On the few occasions, they do make time for their stomachs, they settle for street vendors. Ironically, some of those street vendors are richer than the suits they cater to. Earlier this year, Scroll.in ran a video story on one such street vendor and the economics around his business. Mariappan works six days a week. He sets up shop at 8am and ends his day at four in the evening. His modest cart has only three items on the menu; each priced between $0.3 and $0.4. He claims to sell 1,050 items per day with a net daily expense of $77, on items like onions, potatoes, tomatoes, coconut, oil, rice, lentils, transportion and gas. Not impressed yet? His monthly revenue is never below $5,600. Monthly expenditure is a maximum of $2,712 – that includes bribes of $77 per week to the city’s municipality and cops. Mariappan also budgets for the Municipality confiscating all his equipment or even bulldozing his shop twice a month. That means he spends on all his equipment – from vessels to cutlery – all over again. After accounting for all this, he makes a net profit of $2,096 per month. To put that figure into perspective, $2,096 per month is how much an Indian with a postgraduate degree would make after 10 years of work experience in the IT sector or in a senior management role. If you’re still scoffing at that man and the money he’s making, understand that he’s making that much as a local, stand-alone, non-franchised – and illegal – operator. If he were to double down and build a franchise, there’s no doubt he’d be rolling in (more) cash. Don’t take our word for it? 14 of the 2,043 names on the <strong>2017</strong> Forbes World’s Billionaires list are fast food moguls. The list featured the likes of Marian Ilitch and family (Little Caesars, $6 billion), Bubba Cathy and Dan Cathy (Chick-Fil-A, $3.8 billion), and Tony Tan Caktiong and family (Jollibee, $3.4 billion) amongst others. Just to be clear, these are businesses that have made their billions by selling $5 foot-long sandwiches and $3 chicken noodles. That’s where the brilliance and skill of the business is. Fast food joints similar to McDonald's and Jollibee turn incredibly high profits despite selling meals at a fraction of the cost. It shouldn’t work, but it does. These outlets are smart in this regard. They make you feel they’re pricing themselves into bankruptcy with low prices, but they employ a number of good strategies to keep patrons coming back for more. And not all of it is done by lowering prices. FRIES French fries contain more Acrylamides than just about any other food. The chemical has been shown to cause tumors BURGER McDonald's feeds about 68 million people per day, that's about 1 percent of the world's population COFFEE Sir Paul McCartney ditched his longtime label to make music for Starbucks 15 EQUITY
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