McDonald's franchise
McDonald's is the world's best-known quick-service hamburger chain, serving burgers, fries, breakfast and drinks from drive-thru and walk-in restaurants. McDonald's usually develops the restaurant and leases it to the franchisee through an Operator's Lease, so buyers run a site McDonald's controls. At the end of 2023 there were 13,457 McDonald's locations in the US, 12,772 franchised and 685 company-owned.
- Cost to open
- $1.47M–$2.64M
- Franchise fee
- $45,000
- Royalty
- 4–5%
- Locations, 2023
- 13,457−250 in 3 yrs
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Company snapshot
- Franchisor based in
- Chicago, Illinois
- Agreement length
- 20 years
- Territory
- No exclusive territory
- Financing
- None offered
From McDonald's USA, LLC’s 2024 filing.
How much a McDonald's franchise costs
Opening a traditional McDonald's restaurant costs an estimated $1,470,500 to $2,642,000. That covers the franchise fee and everything else needed to open, through the first months of working capital.
Source: McDonald's USA, LLC, 2024 filing, page 26
McDonald's franchise fee
The franchise fee is $45,000, for a traditional restaurant ($22,500 at small-town oil and retail sites, $500 for a Satellite). You pay it when you sign the franchise agreement.
Source: McDonald's USA, LLC, 2024 filing, page 18
Royalty and ongoing fees
| Royalty | 5% or 4% of gross sales depending on the circumstances, paid monthly. McDonald's also charges rent on the restaurant it provides. |
|---|---|
| Brand or marketing fund | At least 4% of gross sales spent on advertising and promotion each year. |
Source: McDonald's USA, LLC, 2024 filing, page 19
Sales and earnings
Shares figures McDonald's publishes sales or earnings figures for its locations: domestic traditional franchised restaurants open at least a year averaged $3,964,000 in sales in 2023. The full tables, with notes on which locations are counted, are in its filing.
Source: McDonald's USA, LLC, 2024 filing, page 44
Locations opened and closed
| Year | Franchised | Company-owned | Closed |
|---|---|---|---|
| 2021 | 12,775 (−247) | 661 | 348 |
| 2022 | 12,764 (−11) | 691 | 95 |
| 2023 | 12,772 (+8) | 685 | 120 |
Closed or left counts terminations, non-renewals, locations bought back by the franchisor and locations that stopped operating.
Source: McDonald's USA, LLC, 2024 filing, page 46
How McDonald's compares
Of the 11 burger franchises on this site, McDonald's is the 7th cheapest to open and the largest by number of locations.
| Measure | McDonald's | Typical burger |
|---|---|---|
| Cost to open, low end | $1.47M | $1.39M |
| Closed or left per year | 1.5% | 1.9% |
| Change in franchised locations, 3 yrs | −1.9% | −2.4% |
| Shares earnings figures | Yes | 9 of 11 |
Typical is the median across the 11 brands in burger franchises.
Other burger franchises
McDonald's franchise questions
Does McDonald's help with financing?
No. McDonald's does not offer financing or guarantee loans or leases, so buyers arrange their own, usually a bank or SBA loan.
Do McDonald's franchisees get a protected territory?
No. McDonald's grants the right to run one location but no exclusive area, so another McDonald's can open nearby.
How long is a McDonald's franchise agreement?
The initial term is 20 years. Renewal is usually possible if you're in good standing, often for a fee and a remodel.
Is McDonald's growing or shrinking?
Over the last 3 years 313 franchised locations opened and 563 closed or left, a net change of −1.9%. About 1.5% of locations closed or left each year. That is in line with the 1.9% typical for burger franchises.
How does McDonald's compare with other burger franchises?
Of the 11 burger franchises here, McDonald's is the 7th cheapest to open (low end $1.47M against a $1.39M median) and the largest by number of locations.
Does McDonald's say how much franchisees make?
Yes: domestic traditional franchised restaurants open at least a year averaged $3,964,000 in sales in 2023. Your results can differ; the filing explains which locations are counted.
Where is McDonald's based?
McDonald's USA, LLC is based in Chicago, Illinois.