Q:

How much money does a McDonald's franchise make?

A:

Quick Answer

According to Forbes, McDonald's 12,600 franchises earned on average $2.6 million in 2013; this was slightly higher than the 2012 level of $2.5 million. McDonald's franchises are second in earnings to Chick-fil-A, whose franchises average around $3.1 million annually.

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Full Answer

McDonald's franchisees must come up with a big down payment in order to buy a store. According to McDonald's, franchisees interested in buying a new restaurant must pay 40 percent of the total cost upfront, while 25 percent of the cost of an existing restaurant is required upfront. Although the amount required varies between restaurants, McDonald's states that most would-be franchisees need to put up $750,000 in nonborrowed money before McDonald's will consider them for a franchise.

McDonald's notes that the remaining cost of the franchise after the down payment is made can be paid over the course of 7 years. McDonald's does not offer financing, however.

McDonald's franchisees, in addition to buying their franchises, must also pay McDonald's various fees each month, including a monthly service fee that is based on the sales of the franchise. As of 2014, the fee is 4 percent of monthly sales. Restaurant owners must also pay a base rent, which is also calculated as a part of monthly sales.

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Related Questions

  • Q:

    Where was the first McDonald's?

    A:

    The first McDonald's restaurant was opened in 1940 by brothers Dick and Mac McDonald as a barbecue establishment in San Bernardino, Calif. The restaurant opened as a drive-through featuring a large menu.

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  • Q:

    What is the history of McDonald's?

    A:

    In 1940, Dick and Mac McDonald opened the McDonald's Bar-B-Q, a drive-in restaurant with a car hop service in San Bernardino, California. In 1948, the brothers closed shop for renovations and reopened as a self-serve restaurant featuring nine items and focusing on hamburgers. Ray Kroc, a Multimixer salesman, who had a vision of expanding the restaurant all over the United States, visited this small but effective restaurant in 1954.

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  • Q:

    Does McDonald's own any other companies?

    A:

    The McDonald's Corporation has owned a few other companies. The corporation acquired other restaurant chains in the 1990s, but has been divesting itself of many of these other brands to focus on the growth of the McDonald's brand.

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  • Q:

    How many employees does McDonald's have?

    A:

    McDonald's and its franchisees employ approximately 1.9 million employees as of 2014. McDonald's has more than 35,000 locations in over 100 countries as of 2014. About 80 percent of locations are franchised.

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