Q:

What is a McDonald's franchise's profit?

A:

Quick Answer

An average McDonald's franchise makes between $500,000 and $1 million in profits per year as of 2013, according to McDonald's Franchise Disclosure Document. For restaurants open at least 1 year in the United States, average total revenues are $2.6 million.

Continue Reading
What is a McDonald's franchise's profit?
Credit: Mike Mozart CC-BY 2.0

Full Answer

As of 2013, the U.S. restaurant franchise with the highest sales is Chick-fil-A. Its restaurants average gross revenues of $3.1 million per year. McDonald's is second with $2.6 million in annual single-store sales. Jason's Deli comes in third with an average of $2.55 million in sales per store. Subway has more locations than McDonald's, but stores earn an average of only $481,000 in revenue each year.

Profit margins are typically low for restaurants in general and especially for restaurants owned by individual franchisees. The average profit margin for the restaurant industry overall is 2.4 percent, as of 2013. The margin is down from 3.2 percent in 2009. The average franchised restaurant location makes a profit of less than $50,000 per year as of 2013. Opening a franchised restaurant with an established brand sometimes costs as much as $500,000.

McDonald's is the largest restaurant chain in the United States as of 2013 and is highly profitable on a corporate level. The company earned revenues of more than $27 billion and profits of $5.5 billion in 2012, with a profit margin of almost 20 percent. The profit margin for large U.S. companies averages about 8.7 percent.

Learn more about Corporations

Related Questions

Explore