Newspapers Gone Charitable; Not All is Golden in Europe for McDonald’s; Starbucks Not Letting an Itty Bitty Downturn Get in its Way

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Not-for-profit has been taking on a whole new meaning lately for some unlikely reasons: newspapers. The Philadelphia Inquirer, the Philadelphia Daily News and Philly.com have gone tax-exempt. It’s probably not the first place you think of when you want to make a charitable contribution, but it’ll gladly take one now. Along with an additional $20 million donation, billionaire H.F. “Gerry” Lenfest, who controlled these publications, took the Philadelphia Media Network, tweaked things around a bit and morphed the newspapers into a public benefit corporation (PBC) that will be called The Institute for Journalism in New Media.  A little wordy, maybe, but the entity itself is dedicated to “independent public service journalism and investigative reporting that positively impacts the community, while also creating innovative multimedia content.” Got that?  The paper will still be run as a “for-profit” biz while getting you a tax deduction in the process.  In case you didn’t know, Kickstarter is also a PBC. Just saying. It’s an interesting idea just not an original one for a newspaper as there are a few other newspapers in Florida and Connecticut that have taken this approach. It’s a way to try and make newspapers relevant and successful in a digital era, not to mention, a last-ditch attempt to try and keep a publication from going bust

Hamburglar?

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So what are the Golden Arches accused of doing this time? Three Italian consumer organizations are charging that the fast-food chain is causing franchises in Italy to inflate the cost of menu items. You see, in order to snag a European franchise lease, a lessee must sign a twenty year contract – a contract that is twice as long as what other franchises require. But then, McDonald’s is also accused of licensing the premises for above market rates – by about ten times –  making it nothing short of a big pain in the but to switch competitors. So, in order to defray the costs of these above-market lease rates, European McDonald’s franchises jack up the prices on menu items with consumers bearing the brunt of the cost. At least that’s according to a survey cited by the coalition filing the complaint. Apparently, a whopping 68% – 97% of McDonald’s menu items in various Italian cities are more expensive in franchises than in company stores. Franchises make up 75% of McDonald’s European revenue and worldwide McDonald’s has made $9.27 billion in revenue from these franchises. But before the EU even considers launching a formal investigation into these alleged shifty practices, authorities will first send out a formal questionnaire. Depending on how well those questions are addressed will determine if there is sufficient cause to even open an investigation. Besides, those same EU authorities are already busy investigating McDonald’s in Luxembourg over allegations that it managed to evade paying $1 billion in taxes on its European operations.

Slowdown? What slowdown?

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There might be an economic downturn in China, but that’s not stopping Starbuck’s from expanding its empire there. Sure there are already 2,000 Starbucks stores caffeinating the world’s second largest economy. However, Starbucks feels that the country could use at least 1,400 more stores and plans to have them all serving up lattes by 2019. Starbucks CEO Howard Schultz feels that China has the potential to become the company’s biggest market. And that’s not so crazy considering that China is already Starbucks’ second largest market and is the fastest growing one too. At a recent Starbucks event in China called the “Starbucks China Partner-Family Forum” (Alibaba’s Jack Ma was at the event so you know it was a big deal), Schultz wanted to reassure the Chinese that he totally gets their culture and has tremendous admiration for it. Hence, he made sure to acknowledge and give major props to the parents of its baristas. In fact, Starbucks wants so badly play nice with China and shower the country with oodles of corporate respect that he is offering to cover 50% of monthly housing expenses for Starbucks employees in China. For baristas there who so valiantly served up drinks for ten years, Starbucks is offering them a “career coffee break” – a year long paid sabbatical. Hěn hǎo!

 

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