McDonald’s franchise: Cost & process | Swoop US (2024)

FAQs

McDonald’s franchise: Cost & process | Swoop US? ›

The total cost of opening a McDonald's franchise can range from $1 million to $2.3 million, depending on the location and size of the restaurant. This includes the franchise fee, which is $45,000, as well as equipment, inventory, and other startup costs.

How Much Does A McDonald's® Franchise Cost?* Most McDonald's franchise owner/operators have entered the corporation by purchasing an existing restaurant. To open a McDonald's franchise, however, requires a total investment of $1-$2.2 million, with liquid capital available of $750,000. The franchise fee is $45,000.

On average, however, owner-operators can earn anywhere from $50,000 to $150,000 per year per store after accounting for expenses and royalties paid to McDonald's corporate. So, someone with multiple successful franchises could potentially earn a substantial income.

McDonald's is 95% franchised in the U.S., and we are outperforming our competition due to the hard work and commitment of our franchisees. As you will see throughout this brochure, franchisees are the key ingredient to our brand.

Yes, McDonald's continually seeks qualified individuals to become franchisees. Since the total cost varies from restaurant to restaurant, the minimum amount for a down payment will vary. Generally, we require a minimum of $500,000 of non-borrowed personal resources to consider you for a McDonald's franchise.

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

The company makes money by franchising its fast-food brand and leasing properties to franchisees, often at significant markups. Approximately 95% of all McDonald's locations worldwide are franchises. Franchisees are attracted by the impressive profit margins, making McDonald's franchises a highly profitable investment.

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

However, a record 1,750 US restaurants changed hands in 2021 and the number of US outlets continues to shrink even as the company grows in international markets. However, some sources give a failure rate of less than 0.5%, which is very low.

High equipment and supply costs: McDonald's requires franchisees to purchase equipment and supplies from approved suppliers, which can be more expensive than sourcing from other suppliers. This can increase the initial investment required to start a franchise and can also impact ongoing operating costs.

In a nutshell, it's an upfront fee charged by franchisors that grants you a license to operate their business for a defined period of time. And once you pay it, you officially become a franchisee.

New franchisees in the McDonald's system will have to pay 5% royalty fees starting Jan. 1, up from the current rate of 4% and the first increase in nearly 30 years. CNBC initially reported the increase Friday morning, citing an internal message from McDonald's U.S. President Joe Erlinger.

Arcos Dorados is the world's largest independent McDonald's franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean.

At the McDonalds I worked at, my managers decided 25 employees operating the store was a little excessive, so some people were able to leave early that day. I'd say, to keep the store running properly, the minimum amount of people needed ranges to about 16–19.

While operating a Chick-fil-A restaurant franchise costs a modest $10,000 initial financial commitment, it requires a holistic commitment to own and operate the business in a hands-on manner.

The royalty fee is a monthly percentage of sales. The change won't apply to all franchise operators. The rate will stay the same for those currently running McDonald's locations who extend their leases, as well as those selling their franchises to other operators.

The initial franchise fee is $15,000* for each Subway Franchise location.