The Impact Of Higher Labor Costs

“I’m not in the food business- I’m in the human resources business”. That was a comment designed to me by a McDonalds franchise owner 10 years back. The comment has trapped with me. Junk food restaurants have constant turnover in staff. That presssing issues takes a huge investment in hiring, training, analyzing- and sometimes firing- personnel.

So what happens economically when you boost the hourly rate of pay across the board? Click for a free trial here. McDonalds announced an hourly rate increase for its workers recently. As mentioned here, the raise only applies to the 1,500 McDonald’s-owned restaurants in the US. The raise does not connect with franchise-owned stores, which will make up 90% of the restaurants and the majority of the workforce in america.

In a franchise, an investor- referred to as a franchisee- purchases the to use the McDonalds brand and operate a restaurant for a period of years. Page 45 of the McDonald’s 2013 Annual Report explains the arrangement. The franchisee pays an initial fee and annual royalties, predicated on a share of sales.

  1. An advanced presentation level, probably with an advance portal mechanism
  2. Interview with Blake Terry from the Bay Hill Club & Lodge
  3. Get Bank Accounts That Work for You
  4. Early knowing of potential issues and vulnerabilities through Oracle Security Alerts

So, your royalties are an additional expenditure on the franchisee’s income statement. The contract is normally in effect for 20 years. McDonalds defines margins as sales less operating costs. In 2013, company-owner restaurants noticed a 2% decrease in margins, due partly to higher labor costs. 9.01 presently.” To keep things simple, call it an 11% increase in labor costs. Consider the impact of this increase on the financials. The firm’s 2013 consolidated income statement claims that payroll and employee benefits account are 17% of sales.

Now, this statement includes both franchise-owned and company-owned stores. This line item includes wages for management- as well as benefit costs that are not payroll. But you are given by the schedule a sense of how a lot of each sales dollar will go toward paying employees. 10), the entire line item of payroll and employee benefits increases by the same percentage.

Payroll and worker benefits would increase to 19% of sales. Again, not just a perfect assessment- but you get the theory. A restaurant would spend 2% more of every sales dollar on employee costs. Higher payroll costs affect cash flow. If your costs increase by 2%, you will need 2% more money every two weeks to make payroll- the rest being the same. Rather than plowing 2% of your cash generation into business growth, you have to use it for payroll. All this is food for thought. Carefully consider the long-term impact of the pay scale increase on your cash and profitability stream.

The W.I.T.s Academy will be a daily strip about the comedic ventures of witches- and wizards-in-training. The series is created by Catharina Ledeboer and is made by Viacom International. The W.I.T.s Academy is executive produced by Tatiana Rodriguez. Russell Hicks, President, Content Production and Development, Nickelodeon. Friends and Dora and Blaze and the Monster Machines, amongst others. Noggin–Nickelodeon is introducing Noggin, a new mobile subscription service for preschoolers.

5.a month 99. Nickelodeon is also in discussions with marketers about offering this ongoing service as reduced supplement to authenticated clients. Noggin shall feature an enormous volume of long- and short-form content for preschoolers, with additional content regularly added. Nickelodeon Sports–Nick’s sports initiative encompasses the brand’s established relationships with major sports leagues, including NFL, NBA, MLS, NHL and NASCAR, across an array of off-channel activations, including pro-social initiatives and marketing partnerships. In 2014, Nickelodeon expanded its sports existence to add programming using its inaugural Kids’ Choice Sports Awards, executive and hosted produced by Michael Strahan, and the launch of NickSports. Launched on Nicktoons last fall, NickSports is a primetime (Wednesdays from 9-11 p.m.

Also defined was Nickelodeon Inside Out Solutions, Nickelodeon’s newly named integrated marketing and creative content offering for partners. Nickelodeon Inside Out Solutions is a collaborative service that attaches partners to the strengths of Nickelodeon’s systems and unrivaled characters, and provides Nick’s audience experience, creativity, advertising solutions and branded-entertainment opportunities. Nickelodeon, now in its 35th season, is the number-one entertainment brand for kids. It has generated a diverse, global business by placing kids first in everything it does.

The company includes television programming and creation in america and around the world, plus consumer products, online, recreation, books and feature films. Nickelodeon’s U.S. television network sometimes appears in almost 100 million households and has been the number-one-rated basic cable network for 20 consecutive years. Nickelodeon and everything related titles, heroes and logos are trademarks of Viacom Inc. (NASDAQ: VIA, VIAB).