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This same concept is also true of McDonalds historically - they own the land, lease it to franchisees, and realize the appreciation themselves. McDonalds are fairly economically valuable, so the capital gains by the time they're cleared and resold as development often dwarfs the value of the franchise fees.
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The thing is, they rarely sell the properties. At least from what I've seen. It's all unrealized appreciated value.
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Cashflow from renting to a franchisee must be fantastic. You pick the locations and the decor. If the business does well you prosper, but if the business does poorly you're insulated from the downside, the rent is due either way! If the franchisee can't hack it you repossess the building and rent it to some other suc^H^H^Hfranchisee.
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McDonald's is invested in franchisee's success, it wouldn't be a great business otherwise.
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It's actually hilarious sometimes. The business models that generate most scorn and incredulity on HN are the straightforward ones. They convert labor pretty much directly to a very basic product with a clear demand by society, that can't possibly be profitable, are we sure it's not actually a front for Real Estate or AI or Tax Evasion?
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I'm sure real estate is the primary business model of McDonald's but franchisees wouldn't be paying the rent and fees if the restaurant model itself wasn't very profitable.

Most restaurants in Europe generate an average of 250k in net cash flow per average restaurant, that's few years of work before ROI.

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They don't have to ever sell the properties. Property can be assessed by a third party and then function as collateral against a low-interest loan, which is real money.

Not that I think McDonald's will ever really find themselves in a pinch, but if they did, they would additionally be able to liquidate selected properties for cash. When you are rich enough, the promise of having money in the future is just as good as actually having money. It doesn't work like that for most of us, but that's the nature of risk assessment in finance.

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Rent is the realization of value appreciation - value is just the NPV of future rents
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Still looks good enough on financial statements if you’re ig enough to care about them, and it makes for great collateral in the process of buying the next one.
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As someone once put it: "McDonald's is a real estate company with a hamburger hobby"
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Reminds me of the similar one about Harvard with a hedge fund and a little school.
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Or quite a few religious organizations.

The whole reason why the Catholic Church doesn't allow priests to be married anymore was because it used to be that the individual churches were mostly the property of the priest, and would be passed down generationally (with some restrictions). The church phased in the ban on marriage so that over time, the churches would all in up in the estate of a priest with no heirs, where they'd become the property more formally of the Catholic Church proper. Today the Catholic Church is the single largest landowner in the world, with about 170 million acres.

More recent religious organizations have taken note of that, with LDS owning about 2.4M acres.

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Your comment dragged me into a rabbit hole, which is always a welcome surprise.

From my readings, one can always debate whether this reason for celibacy is whole or not (of course, more holy reasons were given, like purity of the ritual among others), but avoiding inheritance from father to sons was certainly a big factor. By barring heirs from the equation, it solved the whole dispute over inheritance. Yet, when it comes to clerical office and priesthood, "property" is not quite right, since it's mostly about usufruct and benefices, moreso. Which can be significant assets, that goes without saying, hence the Church did everything it could, for holy and not-so-holy-reasons, that traditional generational transmission does not apply. No next generation, no problem.

Quite importantly to the Roman Catholic Church, they wanted to avoid dynasties of priests that would grow in importance and out of their control, so they did whatever they could (ban marriage and fatherhood) so that a mis-aligned priest would only be a temporary nuisance to the Institution.

A lot went into this short burst of investigation, like the fact that early Churches were private property of land-owners, building churches for indulgences and power, reinforcing their ties with the Church, and I may dig deeper. Thanks for your comment again, if you have some references you recommend, I'd appreciate you share them!

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The original LLM agents
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I don't understand what you mean. Do you mean I or the GP used LLMs?

If you mean I did, yes, I have, to begin with, to get an overview and links. But to do any of the reading or to write my comment? No. What's wrong with that?

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That does not sound correct. Priests in Eastern rite Catholic churches get married, but they do not own the land in which their parish chirch stands and they do not pass that land on to their children. Note that the Catholic Church itself does not own that land, either. As I understand it, in most cases the parish land is owned by a Catholic episcopal See or eparchia, as in Latin rite Catholic Churches, in which the diocese owns the land.
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Duke: A healthcare system with a little University.
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Same is also true of DJT's various casino gambits. Pilloried in the media but rather sound (though high risk) from a land speculation perspective.
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You're saying that bankrupting a casino was actually 4D chess? Ok, buddy, whatever you say.
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Did I say that? Since they failed, they were obviously bad business. But they were a rational thing to attempt to do - taking on a massive loan to speculate on land and using a (potentially) high cashflow, quick to setup, easy to market business to offset the high initial interest rates. i.e. the same thing being discussed in this thread
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FWIW “Gambit” without elaboration strongly invokes the “the bankrupcies were on purpose” to me, so, did you say it? Strictly no, but it was very suggestive.
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Eh. I wanted to be provocative because I've heard a lot of educated but economically naive people assume 'highly leveraged hotel-casino project' is dumb a priori, even though it's (an example of a) a sensible and common business strategy available to the wealthy. I didn't mean to imply bankruptcy was intentional though.

As to whether Trump did this better or worse than others, I have no idea as I haven't studied it but would assume the latter given the outcome.

A certainty though - plenty of undeserving people you would consider contemptible have successfully played this hand many a time. Yet more reasons to tax land

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A rational thing for a competent person to attempt. Given the theoretical structural advantages of the idea, the 6 failures are even more embarrassing than failing at something that was actually a bad idea.
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Bankruptcy is great actually, you don't have to pay the money you owe but if you play your cards right you can still keep the benefits.
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Well it's not like it didn't work out very well for Trump. Idk if it's 4D Chess but a huge part of the expense that lead to bankruptcy was licencing of the Trump brand. Can't pay all the other vendors because we first had to pay to license the name. OK, bankruptcy.
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That's the answer, it's a way to squat on land. Another way I know of is a golf course. It's more maintenance but it's a way to generate some cash to offset property taxes and then wait for a decade or two and sell.
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I had an acquaintance who had a couple of driving ranges for golf for that exact purpose. He said it kept the property taxes lower than if he had built nothing on them. His only goal was to be break-even until he sold.
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Yeah, came here to post something similar. I used to hang around in real estate circles, and two businesses come up often: Self storage and car wash. These are two things people just can't get enough of.

(Car wash usage doesn't go down even during a recession, apparently).

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I personally don't get car washes. I just wait for it to rain. Then free car wash...
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There's aesthetic reasons (I'm proud of my car, I like it to look nice), and practical reasons (Leaving mud, grit, salt etc, will wear and corrode my car faster).

Where I live, summer rain doesn't really clean the car (if that's what you care about), and in the winter you are shortening your cars life by years if you don't try and get the salt off regularly.

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When I bought my 8 year old car, it was from the Midwest and the mechanic I asked to check it out said "Don't buy - it's got a good amount of rust because of the salt they use". I asked whether it means the car is less safe. He said "No, just more repairs and potentially costlier repairs. I said "Over the remaining life of the car, how much extra would it cost?" In today's dollars, the answer was $2000.

I bought the car. It easily lasted another 7 years before it died in a collision.

My car prior was a purely Midwest car, and I rarely washed it. It happily lasted 16 years. I passed it on to someone else, and he used it for a few more years.

I suspect the fear is overblown.

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The fear may be outdated.

I'm 62, and grew up near Detroit. I remember cars developing major rust holes after just a few years. The rusting also affected the inside of the engine compartment, and it did make repairs more difficult. There was an industry of aftermarket rustproofing shops, that were a scam. Every teenager with a car (which was still rare) learned how to patch rust holes with Bondo.

My first car, the frame rusted out and had to be welded back together.

Toyota and Honda put a stop to that. They did a number of things: Better steel alloys, better coatings, painting the bodywork before it could start rusting, eliminating places in the body where water could accumulate, etc.

Today, you rarely see totally rusted out cars on the road.

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The bodies are better, but I can assure you, the frames and suspension parts are not. They still rust out here in the salt belt after 10-15 years, depending on the brand and how often you drive them. If Michigan instituted mandatory annual car inspections, it would take about half the (still working, not unsafe) cars off the road.
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I've never had a frame go bad that soon. Most of those are recalls where they replace the frame
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Yeah my wife and I inherited her parents' Highlander from Boston when they moved back to their home country. The drive shaft literally fell out on the road because the brackets holding it on rusted out. Was lucky I had enough momentum to pull over.
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The old days the cars would rust and take the frame with it (I've literally had them get so bad they basically folded up) - modern vehicles will stay pretty darn decent until the first time the paint gets broken, then it'll begin - but the unibody usually lasts quite a long time.
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No, I watch video of cars coming into the shop and the models from the Midwest are usually in pretty rough shape due to all the corrosion from the salt on the roads. And brand doesn't seem to matter.
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Not disagreeing with you. That's exactly what my mechanic saw as well which is why he warned me.

But it really didn't make a difference to the longevity of the car. Sure, occasionally a repair was a tad more expensive, but that's it.

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I live in New York, which is heavy handed with salt. Paints and alloys are better, but there’s basically a 250k and about 10 year lifespan for a car that lives upstate.

The frame, exhaust and suspension generally get corroded and start to fail. You see a lot of 200k Civics and Accords, but few 250k.

You really notice it when traveling to California. Last time I was in SFO with my son, he counted 78 Porsche 911s and about 100 “old” (80s or older) cars on the roads.

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I've always lived in the midwest. Every car I've ever owned has been a car from the midwest, and has been driven in the midwest.

The salt from the road is driven by car tires into a briny mist that coats everything. It blocks vision through windows. It accumulates in chunks that can be kicked (like mud also can, except corrosive). It wicks its way into tiny crevices and betwixt layers and infects every part of the car that can be infected, and once there it rots everything that it can rot.

And I don't mean just the bodywork; that part has been getting better with improved processes and paint.

But stamped control arms often rust away while the ball joints and bushings are still in good form. Electrical connections rot. Frames and frame-like components often have scaly holes in them. Every exposed engine part corrodes; uncoated steel turns black, red, or brown; galvanized and aluminum parts turn white and kind of fuzzy (and stuck). Our junkyards are full of rusted-out hulks of cars with drivetrains that still work properly, even if they're ugly.

Fixing things when they break is tedious and time-consuming, and the most-sane approach to any repair on a car that's more than a few years old is to go into it with an expectation everything that doesn't crumble from rust is instead frozen with rust.

The work itself unilaterally causes a person a learn new facets of their verbal and mechanical vocabulary that they never even knew possible, and is arduous in ways that would test the emotional stamina of a Buddhist monk.

With enough cleaning and care (and just rinsing things off by driving in the rain), a car that is from the midwest can be largely saved. Getting rid of all of the salt slows the process down very dramatically.

But a car that is regularly driven in the midwestern winter is in the midst of a fairly quick process of being returned to the earth.

It's just a fact that is plain and that we live with every day. We do work to prevent it; on a warm-ish day in January, cars will line up around the block to get into a car wash and have a chance to dry out before ice freezes every orifice closed.

But it's not fear, I don't think. Just as we accept the sun coming up every day and disappearing over the opposite horizon every night, we accept the rot as something that will inevitably consume the most expensive machine that we own and that this will happen on a schedule that we play very little part in controlling.

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Watch the channel Auto Parts City on YouTube, I assure you it is not overblown. It's a junkyard owner. A ton of cars come through there that run fine and could otherwise be very serviceable, but the frame/body are crumbling from rust, so they have to be crushed. We're talking cars that are 10 years old. And yes, it even includes Toyotas and Hondas. (In fact they're more likely to end up crushed for that reason than another car is, since a Nissan or Hyundai's transmission and engine won't last long enough for rust to really end its life.)

From a certain perspective, maybe some people don't care if they would be getting rid of the car in like 5 years, but if you do want to keep a car 15 years and you live in "salt country" I would strongly suggest doing something about the salt regularly.

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Selection bias. Cars that were not treated for salt, and didn't die, didn't end up in the junkyard for stories to be told.

My first car spent its first 15 years in the Midwest. No garage. Very irregular car washes (perhaps once a year when I owned it). It lasted about 20 years total. When I lived there, I didn't know anyone who had to give up a car due to rust. There definitely was rust, but not something that caused the car to break down.

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Coincidently I was thinking about car wash just few days back, One was bought in 2014, never car washed seems fine so far. Another was bought in 2022 again no wash so far and no plan to.

I used to think everyone does it, I will do at some point but that point never came. Inside we vacuum and wipe every few months. Washed mats once in an year or so but car body wash rain takes care of it.

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I used to wash my car once a year, then I just ran out of time ;)
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I saw rusted out cars and trucks all over the place when I visited northern Minnesota and the UP of Michigan last year. Even late-model cars that couldn't have been more than 5-10 years old had rusted out rocker panels.
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Yeah, those are good points I hadn't really thought of much. Thanks! I guess it's less of a priority for me because I bought my car for $1000 and it came with Michigan rust already. Lol.
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I rarely wash as well. But we're in a minority in US society.
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Or a garden hose, bucket of soapy water, and a sponge. At least if you have a house with a garden hose. Many apartment complexes offer the amenity of an area for washing cars though.
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Most Canadian cities prohibit washing anything (car, bike, etc) outside with soap unless you're capturing the runoff. Even biodegradable soaps.

Car wash is the only legal way to use soap, for better or worse.

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> unless you're capturing the runoff

And doing what with it, exactly?

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Not sure if it's the same in Canada, but where I am from the problem is the oil (lubricant and fuel) from the car and at car washes the runoff gets treated by letting it go through an oil trap.

The trapped oil gets disposed of separately, the treated oil-free water goes to the sewer.

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Hell if I know.

AFAIK the regulations were put into place to prevent untreated water from going into storm drains and into the water system, so presumably the cities are fine if you pour it down into the bathtub drain and let it go to the waste water treatment plants.

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I appreciate the sentiment, but is the gunk on the car not the gunk that would have washed down the drains in the first place? Clearly there are plenty of nasty cleaning agents, but one supposes that safe ones might be used (I actually spent a while considering exactly this, and it's possible but not super easy getting an environmentally friendly car cleaner). I guess the issue is it's hard to tell from mere drive-by observation what cleaner is being used.
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You can allow the liquid to evaporate off in an evaporation pond, or combine it with an absorbent gel. Then the solids can be put in trash.
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I assume no one actually does this when washing their car.
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Car washes are an order of magnitude more water efficient (enforced by state agencies) than individual home car washing.
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Yeah that could be a concern depending where you live. Where I live, water is cheap and abundant. And I've never measured, but I would guess I use maybe 10 gallons to wash a car. 2 gallons in the bucket, and just a light wetting followed by soapy sponge and then a rinse, using a nozzle to create a high velocity spray. The water doesn't run at all unless I'm spraying it on the car.
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Water is cheap and abundant where I live, too. If we have a problem with water in any normal year, it is usually that we have to deal with a surplus of it. (We put drainage tiles under our farm fields to get rid of excess water and generally don't even bother with irrigation systems at all.)

But car washes are interesting systems and one of the things that makes them interesting is that the water they use is (often) recycled. The same water gets reclaimed and re-used to wash cars over and over again.

I didn't look very deep at all, but one car wash chain suggests[1] a reclamation rate of 70%. Not perfect, but way better than 0.

[1]: https://www.tsunamiexpress.com/our-washes/

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You can probably match that efficiency at home by using an electric pressure washer. Mine does 1.2 GPM, which means an entire car wash is only a few gallons.
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Yes. In the same way that dishwashers are an order of magnitude more water-efficient than washing by hand. (But consume a kilowatt of electricity heating the water and running the pump, which is the part that everyone always leaves out.)
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You heat the water when you wash dishes by hand too, don't you? It's not very hygenic to do dishes with just cold water.

Given that by hand you use much more hot water than the dishwasher would, you're using more electricity (or gas). Since a little pump doesn't use much at all, it's mainly just the drying heat that matters. Though nobody is forced to use the drying cycle - if one enjoys drying dishes by hand, they can still use the dishwasher to do the washing.

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In my house you don't heat the water but it's been sitting in a metal water tank at equitorial latitude for hours so is generally quite warm for evening dishes.

Is it safe? Not for a restaurant where the temps need to get to parasite killing temps to pass muster.. but if I had to guess, the odds of getting killed by a bad-tempered cow outweigh it by 10x.

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You're assuming an absence of solar hot water heaters - the world isn't homogenous.

eg. Our household conserves water (we track every litre we bring up to the tanks and filter) and we don't have a dishwasher - hot water is heated by the sun and run-off goes to the grey water tank for the garden.

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When my water heating was electric, switching to a dishwasher consistently led to lower electric bills compared to a year prior (confirmed for 12 whole months).

You save water and electricity.

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But can you put dishes with food on them in the dish washer?
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Yes.
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That's surprising. I once tried an automated car wash just to see what all the hullabaloo was about and I think the rain actually does a better job. Worst $5 I've ever spent...
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I live next to a college. The Sororities will hold car washes. Of course, they ask us to get out of the car first, so that Cheerleading movie w/ Kristen Dundst lied. :-)
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Rain tends to just move the dirt around, at least where I am.
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Where do you live? I live in the Midwest (SE MI) and when there's rain it tends to be medium-to-heavy rain and with wind so sideways.
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Other continent :)

You ever park under trees?

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I think I may have an autistic affinity for washing machines, but I would LOVE to own a laundromat. I feel like this would fit into the self storage/ car wash category.
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> I would LOVE to own a laundromat.

My (late) kid brother did that for a number of years. Big time sink and PITA.

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too many moving parts lol
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There's a guy Investment Joy on YouTube who you would probably enjoy watching, then. Just a pretty normal guy who runs a few small businesses. I think he has at least one car wash and a laundromat among other things. He talks about the various costs and problems, too.

https://www.youtube.com/watch?v=nikXsAW12Wo

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Oh actually, yes - that comes up once in a while as well.
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Ha, I watched some guy on Youtube who bought a carwash. It's seems like a decent way to basically make some money with not a ton of work. Plus, you can get a lot of money as cash too, makes it easy to not report as income, which I bet a lot of their owners do.
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Or conversely, if you have cash income you need to launder…
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Land value tax!
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Or, you jack up prices to pay for the renovations. Self storage out in the middle of nowhere is cheap, but self storage in a urban location that's easily accessible is not.
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Both are correct. The decision will come down to what the cash flow and demand actual is and what they expect the future land to be worth. Sometimes you just let it go down to a low tier of maintenance, avoid all R&M and ride it out until you’re ready to cash in. The appreciation is collateral for future developments to so the model scales well.

As long as home ownership declines, storage facilities will continue to flourish. There may be a blip when all the boomer downsizing demand evaporates as their kids will trash the junk.

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