Why do crack dealers still live with their moms? | Hacker News Reader

Why do crack dealers still live with their moms?

ted.com

47 pointstyn20 comments

Short answer: because drug dealing gangs are organized like McDonalds franchises where most "foot soldiers" make minimum wage or less while the leaders make hundreds of thousands of dollars.

its a typical case of multi level marketing

I'd be surprised if the average McDonald's franchiser is making anything close to $100,000 per year. I'd guess that it's around $60,000 in a good location and year. McDonalds is known to be especially bad at fleecing franchise owners.

I worked at a chain grocery store one summer and had observations pretty similar to Barbara Ehrenreich's in Nickel and Dimed. "Four digits" (per week) was considered to be rarefied compensation. The #3 man in the store was making around $50k, and this was a huge store with about 150 employees.

Would you? Down here (Australia) it takes $0.5m-$1.5m to start one. I'd expect more thent 100k

The McDonald's site has some ballpark franching-cost figures for the U.S.: http://www.mcdonalds.com/corp/franchise/purchasingYourFranch...

The costs associated with new restaurants are as follows:

Initial Costs

$45,000 Initial Fee paid to McDonald's

Equipment and Pre-Opening Costs

Typically these costs range from $905,200 to $1,746,000. [...] The new Owner/Operators must pay forty percent (40%) cash of the total costs of a new restaurant, and may finance the remainder from traditional sources.

http://wiki.answers.com/Q/How_much_do_McDonalds_franchise_ow...

The average McDonalds franchise owner will make $240,000 per year for each restaurant owned. The average McDonalds restaurant will have sales of 1.9 million per year.

That's not to shabby.

It's $1m+ in America now, if you're lucky enough to find a spot where you can even open one. There are so many of them that the geographic restrictions make that hard. They're also a lot pickier about who they'll let open one than they used to be.

Took a glance at some numbers. It appears that I'm wrong. I had management and franchisee ownership compensation conflated in my mind for some reason.

The managers (2nd tear) may be in the $60k range but the owner would be on the 'Board of Dealers' while all the employees make minimum wage.

The owner (the franchisee) is the local head dealer.

Side note: I wish TED talks were available in text format. They're always interesting, but most of the time I'm unable (or unwilling) to hunker down and watch a 20 minute video. Web content needs to be scan-able.

This particular talk, at least, is from chapter 3 of Freakonomics.

The best part of that was hearing Steven Levitt say 'bling bling'

Another explanation why Google underpays its employees.

Google underpays because they have a 'cult' following similar to Apple which allows them to recruit not based on pay, but on their credibility as a cool-smart company, and other non financial perks.

There are a number of other interesting (though perhaps dubiously supported) similar arguments (including this one) in his book freakonomics.

Would your mom narc on you?

Although it isn't true - http://en.wikipedia.org/wiki/Blow_(film)

For those not acquainted with the book: "Freakonomics"

http://en.wikipedia.org/wiki/Freakonomics

Let's not jump to conclusions here. Maybe they are just saving money to make their own web 2.0 todo list app, so they can finally get rich.

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