how much does it cost to open mcdonald's franchise

How much is it to buy a McDonald's franchise?

Purchasing a McDonald's franchise, either from an existing franchisee or by opening a new restaurant, requires a large investment. While the initial franchise fee is $60,000 plus GST, you will generally need at least $1 million in order to purchase a McDonald's franchise, and may need more if you plan on opening a new location.

How much does it cost to start a McDonald's?

How Much Does It Cost to Open a McDonald’s?

Name of Fee	Low	High
Initial Franchise Fee	$0	$45,000
Real Estate and Building - 3 month's ren ...	Base Rent: $0 Percentage Rent: 0%	Base Rent: $229,000 Percentage Rent: 28%
Signs, Seating, Equipment, and Décor	$325,000	$1,550,000
Opening Inventory	$10,000	$39,000

How to start a McDonald's franchise?

Steps to starting a McDonald's franchise

1. The application process focuses on financial readiness and customer service. The process starts with an online application. ...
2. The training program teaches franchisees the business from bottom to top. ...
3. Buying a restaurant might involve a change of scenery.

How to buy a McDonald's franchise?

How to Buy a McDonald's Franchise

• Initial Steps. According to McDonald's, the majority of prospective franchisees generally buy existing restaurants, though a few open new sites.
• Buying a New Franchise. McDonald's charges an initial $45,000 franchise fee to get a new store. ...
• Buying Existing Arches. ...
• Flipping a Restaurant. ...
• Recurring Costs. ...

See more

How much does a McDonald's franchise make a year?

With an average initial investment of about $1.8 million, it would take you 8.5 years or less to recoup the McDonald's franchise cost with a 10% or more profit margin. These figures are calculated from the 2020 average median net sales from a McDonald's franchise in the US, which is about $2.9 million.

Is owning a McDonald's franchise profitable?

To the franchisor, McDonald's is a very profitable business with an average annual net income of over 2 billion dollars.

What franchise makes the most money?

What is the most profitable franchise to own? According to the Franchise 500 list of 2021, Taco Bell is the most profitable franchise to own. The food chain has been franchising for nearly 6 decades and is still seeking franchises worldwide. As of 2021, they have 7,567 open units.

What is the failure rate of a McDonald's franchise?

The 50th best default rate is at 25%, and the 50th worst default rate list starts at 52%. This means, that for McDonald's and other top franchises, between a quarter and about half of their franchisees failed.

What is the most profitable franchise to own in 2022?

Most Profitable FranchisesDunkin'7-Eleven.Planet Fitness.JAN-PRO.Taco Bell.Orangetheory Fitness.Great Clips.Mac Tools.More items...•

How much do franchise owners make a year?

According to a survey done by Franchise Business Review involving 28,500 franchise owners, the average pre-tax annual income of franchise owners is about 80,000 dollars.

Who owns the most McDonald's franchises?

Arcos Dorados Holdings Inc. is a company that owns the master franchise of the fast food restaurant chain McDonald's in 20 countries within Latin America and the Caribbean. It is the largest McDonald's franchisee in the world in terms of system-wide sales and number of restaurants.

How much do KFC owners make?

Although the exact salaries of KFC franchise owners are kept private by Yum! Brands, it is estimated that they take home around $120,000 per year. This is grounded on the average salaries of food franchise owners. Individual KFC units produce revenues between $942,000 and $1,000,000 per year.

How much does McDonald's franchise cost?

McDonald's franchisee applicants must have a minimum of $500,000 available in liquid assets and pay a $45,000 franchise fee.

How many McDonald's are there in the world?

McDonald’s Corporation has 38,000 restaurants located in over 100 countries and 93% of them are franchise operations. In other words, many entrepreneurs have chosen to make a living under the shadow of the ubiquitous golden arches. McDonald’s is a powerful brand, with many stores earning well over $2 million in sales annually. As a result, owning a franchise can be profitable for both the owner and McDonald’s when properly managed.

How much cash do you need to own a McDonald's franchise?

However, all applicants are required to have a minimum of $500,000 available in liquid assets, which is essentially cash to be used for investing in a McDonald’s restaurant.

Does McDonald's approve new franchises?

New Franchise. In some cases, McDonald’s approves the opening of new franchises in regions where the company wishes to enter the market, which is also considered "buying" a franchise. Typically, candidates that are approved to open new locations are existing franchisees with experience owning and operating a McDonald’s restaurant.

Who is Lisa Goetz?

Lisa Goetz is a finance content writer for Investopedia. She typically covers insurance, real estate, budgets and credit, and banking and taxes. McDonald’s Corporation has 38,000 restaurants located in over 100 countries and 93% of them are franchise operations. In other words, many entrepreneurs have chosen to make a living under the shadow ...

Does McDonald's offer financing?

McDonald's does not offer any financing or lending. Also, the new owner must pay down the debt over seven years. In rare cases, McDonald's adjusts prospective owner qualifying standards for franchises in urban and rural areas.

Do owners pay rent to McDonald's?

Owners also pay the monthly rent to McDonald’s based on a percentage of sales. Whether buying an existing McDonald’s franchise or building a new one, buyers can shop around to get the best interest rates on loans.

Background

McDonald's is the world's largest restaurant chain by revenue. The company serves tens of millions of customers daily across the world. They rechristened their business as a hamburger stand. Later they then turned the company into a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix, Arizona.

Company Details

Year Business Began: 1955 Franchising Since: 1955 Headquarters: Chicago, Illinois Estimated Number of Units: 39,396

Support and Training Offered By McDonald's

On-The-Job Training: 500 hours (average) Classroom Training: 72 hours Additional Training: At local McDonald's restaurant

Franchises Similar to McDonald's

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How much does McDonald's franchise cost?

McDonald's has the franchise fee of up to $45,000, with total initial investment range of $464,500 to $2,306,500. The data below, compiled from the McDonald's FDD (Franchise Disclosure Document) 2020, represent the estimated financial range for the initial setting up and first 3 months of operation for a new McDonald’s restaurant.

What does McDonald's sell?

Although McDonald's is known for its hamburgers, they also sell cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, wraps, and desserts.

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Is McDonald's a franchise?

Although McDonald's is known for its hamburgers, they also sell cheeseburgers, chicken products, french fries, breakfast items, soft drinks, milkshakes, wraps, and desserts.

The McDonald's Franchise System

McDonald's has been a franchising company since 1955 and has relied on its franchisees to play a major role in the system's success. McDonald's remains committed to franchising as a predominant way of doing business, and it's the leading global foodservice retailer with more than 36,000 restaurants located in more than 100 countries. 

Financial Requirements and Start-Up Costs to Open a McDonald's

An initial down payment is required when you purchase a new restaurant (40 percent of the total cost) or an existing restaurant (25 percent of the total cost).

Other Requirements to Open a McDonald's

Significant Business Experience: Individuals who have demonstrated successful ownership or management of multiple business units or have managed multiple departments.

Ongoing Fees to McDonald's

During the term of the franchise, the franchisee pays McDonald’s the following fees:

What it takes

Most new franchisees enter the McDonald’s system through the purchase of an existing restaurant from either one of our franchisees or McDonald’s USA, LLC.

What you bring to the table

If you’re ready to bring your passion and commitment to our system, McDonald’s provides an amazing opportunity to realize substantial personal rewards.

Welcome to McDonald's Franchising

Perhaps we were your first job. The go-to birthday outing for the kids. Your favorite fries. Maybe you’ve noticed the role we play in our communities and for charity. Or it just might be that you’ve wondered what it would be like to own a McDonald’s franchise in the United States.

Our Franchising Opportunity

To be a McDonald’s franchisee is to be part of something truly special. It is being part of a network whose sole focus is to help you succeed in delivering delicious, feel-good moments for each customer, in each restaurant, every single day. Learn more about McDonald’s Franchising Opportunity.

Global Effort to Increase Representation among Franchisees

McDonald’s announces global effort to increase the number of franchisees from all backgrounds, including historically underrepresented groups.

Why McDonald's?

For community-minded individuals willing to put in the work and inspired to delve into every aspect of the business, McDonald's has the established framework for success. Our resources are unmatched, and the McDonald's franchise model is the best in the world.

Our Values

Our values are our foundation and our core. Explore how they set us apart.

Acquiring A Franchise

If you are ready to explore the opportunity to use your skills, knowledge and experience to own and operate your own business, we want to get to know more about you and your aspirations.

Contact Us

To learn more about U.S. Franchising opportunities, email [email protected]