McDonald’s Franchise FDD, Profits & Costs (2025)

McDonald’s, founded in 1940 by Richard and Maurice McDonald in San Bernardino, California, is a globally recognized fast-food franchise. In 1955, Ray Kroc opened the first McDonald’s franchise in Des Plaines, Illinois, and later acquired the company. Today, McDonald’s headquarters is in Chicago, Illinois.
The franchise expanded rapidly under Kroc, focusing on a consistent and efficient service model. Since franchising began in 1955, McDonald’s has grown to over 38,000 locations in more than 100 countries.
Around 93% of McDonald’s restaurants are owned by independent local business owners. The franchise system is known for its strong operational standards and comprehensive franchisee training.
McDonald’s stands out with its iconic brand, consistent product quality, and innovative marketing. The company adapts to consumer trends by introducing new menu items and focusing on food quality and sustainability.
McDonald’s Franchise Initial Investment
It costs on average between $521,000 – $2,503,000 to start a McDonald’s franchised restaurant.
This includes costs for construction, equipment, inventory, and initial operating expenses. The exact amount depends on various factors, including the type of restaurant you choose, the location, and whether the franchisee chooses to lease or purchase the property. McDonald’s offers 3 types of franchises:
Franchise Type | Initial Investment Range |
---|---|
Traditional McDonald’s restaurant | $1,469,000 to $2,503,000 |
STO and STR Locations | $1,012,500 to $1,708,500 |
Satellites | $521,000 to $854,000 |
We are summarizing below the main costs associated with opening a traditional McDonald’s restaurant franchise. For more information on the various types of franchises and its costs, refer to the Franchise Disclosure Document (Item 7).
Traditional McDonald’s Restaurant
Type of Expenditure | Amount |
---|---|
Initial Franchise Fee | $45,000 |
Real Estate and Building – 3 Months’ rent | $0 to $313,000 |
Signs, Seating, Equipment, and Decor | $1,100,000 to $1,650,000 |
Opening Inventory | $20,000 to $39,000 |
Miscellaneous Opening Expenses | $51,000 to $62,000 |
Utilities Travel and Living Expenses While Traveling | $3,000 to $39,000 |
Additional Funds – 3 Months | $250,000 to $355,000 |
Total | $1,469,000 to $2,503,000 |
McDonald’s Franchise Average Revenue (AUV)
A McDonald’s franchised restaurant makes on average $3,505,000 in revenue (AUV) per year.
Here is the extract from the Franchise Disclosure Document:
This compares to $1,548,000 yearly revenue for similar restaurant burger franchises. Below are 10 McDonald’s competitors as a comparison:
McDonald’s Franchise Disclosure Document
Frequently Asked Questions
How many McDonald’s locations are there?
As of the latest data, McDonald’s operates over 38,000 locations worldwide, spread across more than 100 countries. Approximately 93% of these restaurants are owned by franchisees, with the remaining 7% being company-operated.
This global reach makes McDonald’s one of the largest and most recognizable quick-service restaurant chains, offering franchisees a strong brand and a broad customer base. In the U.S. alone, McDonald’s has thousands of franchise-owned and a smaller number of company-owned locations, highlighting its vast network and potential for growth.
What is the total investment required to open a McDonald’s franchise?
The total investment required to open a McDonald’s franchise ranges from $1,469,000 to $2,503,000 for the Traditional McDonald’s Restaurant.
What are the ongoing fees for a McDonald’s franchise?
For a McDonald’s franchise, the royalty fee is set at 4% of gross sales for existing franchises. However, starting in 2024, this fee will increase to 5% for new franchise locations in the U.S. and Canada. This marks the first increase in nearly 30 years.
Additionally, franchisees are required to contribute to McDonald’s advertising fund, which typically amounts to 4% of gross sales.
What are the financial requirements to become a McDonald’s franchisee?
To begin a McDonald’s franchise, prospective franchisees are generally required to have a minimum net worth of $500,000 and liquid assets of at least $250,000. These financial requirements help ensure that potential franchisees have the necessary resources to support the significant investment involved in starting and operating a McDonald’s restaurant.
How much can a McDonald’s franchise owner expect to earn?
The average gross sales for a McDonald’s franchise are approximately $3.51 million per location. Assuming a 15% operating profit margin, $3.51 million yearly revenue can result in $526,000 EBITDA annually.
Who owns McDonald’s?
McDonald’s is a publicly traded company, meaning it is owned by shareholders who hold its stock. The largest shareholders typically include institutional investors like Vanguard Group and BlackRock, which are major asset management firms.
Additionally, the McDonald’s Corporation operates under a board of directors and is led by its CEO and executive team.
Disclaimer
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