We initiate coverage of McDonald’s with a NEUTRAL rating. As we wrote in our report on Starbucks, we like the quick service business because the set-up costs are relatively low, and the return is relatively high. Well-known brands are easier to sell; everyone knows what McDonald’s is. There’s a high degree of predictability baked into the model. We especially like McDonald’s because it is really a real estate company. The company owns roughly 70% of the buildings and 45% of the land of McDonald’s locations worldwide (excl. Russia). Franchisees pay a percentage of gross revenue (~10.7%) as rent and another percentage (~4%) as a franchise fee. The fact that McDonald’s sells burgers is incidental - it is a highly effective driver for franchisees to pay rent to the parent company.