Now that McDonald's is experiencing tremendous loss in sales and profits through their restaurants, its investors are urging the company's shareholders to transfer their efforts to real estate investment trust to recover from said losses.
According to Wall Street Journal, the famous fast food chain McDonald's has been experiencing tremendous losses for over three consecutive years to date. Product sales and consumer preferences have changed, leading them to be in a very tough situation, especially when the company still wants to remain as a competitive entity in the market.
As a result, some of its investors have lost their confidence in the company's ability to rise up from falling down the stock market. To remedy their current situation, said investors have urged the shareholders to transfer their focus in earning profits to real estate investment trust.
Furthermore, since investors of the company suggested that Sears posted a profit during the recent quarter because of selling property to a trust, this angle would help McDonald's regain its profitability.
Currently, McDonald's still earn out from their franchisees through rentals, reported Consumerist. The company owns several estates worth around $20-35 billion, such properties being utilized as locations for their thousands of restaurants worldwide.
However, since the company is experiencing several losses in sales, the investors feel that I they were to spin their assets to real estate investment trust, they would be able to garner more profits in the future quarters to come.
Additionally, selling the assets to a trust would also benefit the said investors in a way. Since real estate investment trusts provide them with a different tax structure than a regular business, they would be able to get a higher value based on earnings from franchise fees.
At present, the McDonald's company has not complied with the said suggestion to transfer their assets into a real estate investment trust or REIT. However, since the possibility of gaining more profit from it is clear, the company's runners might re-consider in the future.
