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Sauce and condiment companies that establish a franchise tend to be enormously profitable in general (see also pre-KHC Heinz or Lee Kum Kee). The product is very cheap to make, and as you note a bottle of sauce is pretty inexpensive (and contributes almost nothing to the cost structure of a full meal) so customers aren’t all that price-sensitive. These facts are a recipe for fat margins and high ROIC.


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