In the movie “The Founder,” Ray Croc is counseled by a finance specialist that franchising the McDonald brothers’ name and food prep systems was not where he would make his fortune. Croc needed to own and control the franchisee’s real estate assets.
Profits from capturing land value is not just for the burger business. Other hospitality services derive substantial profits from land that is given value by planning entitlements, public infrastructure and in some cases, the natural amenities of a community. State and local governments claw back some of this value through extraordinary taxes. But the one group left out of the profit sharing is the workers. Private and public profiteers justify cutting workers out of any profit-sharing by claiming without evidence the jobs in the industry are low-skilled or just temporary positions for people without work experience.
I’ve formed a nonprofit organization to acquire data and prepare reports on this subject. Follow my work in this area at the Community Equity Project.