Morningstar Analyst Says A McDonald's REIT Spinoff Could Cause Disruption For Franchisees

Morningstar Analyst RJ Hottovy told Benzinga that one of the key strengths of McDonald’s Corporation MCD is the relatively strong relationship it has with its franchisees.

He explained that because McDonald’s operates as the landlord for its franchisees, spinning off the real estate assets would introduce a new landlord and could cause disruption. But it would ultimately depend on how the transaction would be put together, according to Hottovy.

“You understand the motivation from Ackman’s side if this is true just because the company does have probably the largest portfolio of real estate assets in the restaurant space, and a lot of that is high traffic real estate,” Hottovy said.