1. By: Easton “Don Juan” Lyle and Grant “The Hammer” Nation

2.  Fast food restaurants provide a decent stable income for people who need a stepping stone to bigger and better things in life.  The reason this can occur is fast food restaurants are everywhere, meaning a production of millions of jobs.

3.  The number of fast food restaurants can be attributed to franchises. There are a lot of people with the business skills to run a business, but do not want to take the risk of starting their own company.  A great example of this from the book is General Motors. Since they could not hire enough salesman, they sold franchises to car dealers to earn more revenue.

4.  One of the first companies to implement this franchise system was McDonald’s in the late 1950s. They sold the initial investment as such a low price that usually, the franchise would bring in more money than the companies founders.  Then to insure the chains financial success, McDonald’s started buying the land on which the franchises were on.

5.  Today it cost about 1.5 millions dollars to invest in a Burger King franchise, but theoretically it should not be a problem because there is less risk involved. A new study shows that the franchise route is associated with higher business failure.  A Little Caesars franchise started in 1984 by Dave Feamster gave him the exclusive rights to open a restaurant in Pueblo. In return he had to give 5% of his annual revenues and contribute another 4% to the advertising.

6.  18,000 franchise loans between 1967 and 1979 were guaranteed by the Small Business Administration (SBA), according to a 1981 study by the General Accounting Office.  10% of those loans ended in default  Only 4% of independent businesses received SBA loans  Out of 13 loans to Burger Kings franchises, 11 of those defaulted  Burger King was “experimenting” during this time, so they did not lose money on the failed businesses. The money came from the government –backed loans.