If you’re thinking of joining the world’s most iconic fast-food brand, you’re probably looking for many answers. How much does buying a McDonald’s franchise in the United States cost? How do I open an American McDonald’s franchise? We’ll provide helpful answers to all these questions and more. But first, let’s take a quick look at the legendary history of McDonald’s.
The History of McDonald's: From Humble Beginnings to a Global Fast-Food Icon
Before delving into franchise ownership, it's essential to appreciate the rich history of McDonald's, which is one of the most exciting stories in the world of franchising.
In 1940 (over 80 years ago), McDonald brothers Richard and Maurice opened a small drive-in barbecue called ‘McDonald’s Famous Barbecue’ in California. The brothers later realized that most of their profits came from hamburgers, so they ditched the drive-in barbecue and focused on burgers, potato chips, apple pie, soft drinks, and milkshakes. Due to a redesign and efficiency improvements, they managed to open six new locations.
By this time, Ray Kroc (a seller of the milkshake machines the brothers used) was interested in their successful business formula. Impressed by their innovative fast-food system, Kroc saw the potential for expansion.
Kroc acquired the rights to franchise the brand, and the first official McDonald's franchise opened in Des Plaines, Illinois, in 1955. From there, McDonald's quickly became an international phenomenon, known for its signature menu items, including the Big Mac and the Happy Meal.
As of 2024, McDonald’s has 41,822 restaurants worldwide, around 13,560 of which are in the USA. In 2023, McDonald’s generated US$25.49bn globally.
How Much Does a McDonald’s Franchise Cost?
The initial investment for a traditional McDonald’s restaurant ranges from $1,469,000 to $2,503,000.
The franchise fee is around $45,000 and a minimum of $500,000 in liquid assets is required. McDonald’s USA also requires an investor to have a minimum net worth of £1,000,000.
A down payment of 25% to 40% of the total cost in non-borrowed funds is also required.
Other costs and fees that prospective McDonald’s franchisees should be aware of are:
● Royalty fee: 4% of gross sales (increasing to 5% for new franchises in 2024)
● Advertising fund: Typically 4% of gross sales
If purchasing an existing franchise, they can range from $500,000 to $2,000,000, depending on profitability, renovation needs, and sales volume.
How Much Can You Earn From a McDonald’s Franchise?
Due to its popularity, demand, and sizeable setup costs, a McDonald’s franchise requires quite an expensive investment, but the returns can make it very worthwhile. While a McDonald’s franchise profit varies, here is some helpful financial information:
● Average annual profit: McDonald’s franchise owners can expect to make approximately $150,000 in profits per year.
● Average gross sales: The average McDonald’s restaurant in the US generates about $2,700,000 to $3,500,000 annually.
Franchised locations are generally more profitable for McDonald’s Corporation than company-owned stores. McDonald’s retains about 82% of the profit generated by franchisees, compared to only 16% from company-operated locations.
Training and Support: What Does McDonald’s Offer its Franchisees?
There’s no denying that the world’s largest food chain offers in-depth training and support to its franchisees.
When you become a McDonald's franchise owner, you'll benefit from:
- Training: Franchisees receive a comprehensive training program lasting between nine months and two years. The total training time is approximately 1,600 hours. Training includes in-restaurant experience, a self-directed online curriculum, and training at Hamburger University at McDonald’s headquarters in Chicago. The training program can also be tailored based on the franchisee’s previous experience.
- Consultancy: Regional offices throughout the US are available to respond to franchisee needs.
- Marketing and advertising: McDonald's conducts national and local marketing campaigns to drive customer traffic. Franchisees also receive support in executing local marketing initiatives.
- Ongoing support: Continuous operational support is available from Field Operations staff.
- Quality control: McDonald's conducts regular inspections to ensure franchisees maintain high-quality standards.
How Do You Become a McDonald’s Franchise Owner?
If you want to buy a McDonald’s franchise in America, you’ll need to jump through a few regulatory and legal hoops. On average, buying a McDonald’s franchise in America can take over a year. This is what it takes to become a McDonald’s franchise owner:
- Initial research and self-assessment
- Submit initial application
- Provide detailed financial documents and undergo a thorough financial background check
- Participate in a phone interview, followed by two founds of in-person interviews
- Complete a comprehensive personal and professional background check
- Complete training program
- Undergo continuous assessment throughout the training period
- Review franchise opportunities after completing training
- Review the Franchise Disclosure Document and sign the franchise agreement
- Complete your restaurant purchase
- Grand opening and begin operations
Other Franchise Opportunities You Can Consider
Owning a McDonald's franchise in the US can be a rewarding investment, offering the opportunity to be part of a global brand with a rich history. While the initial investment is substantial, the potential for profit and success is significant. With McDonald's training and support, you'll have the tools and resources needed to run a successful franchise and contribute to the legacy of the Golden Arches in the United States.
However, if you don't have sufficient capital to invest in a McDonald's franchise just yet, don't worry! There are hundreds of opportunities out there.
If you’re still deciding on what franchise to choose, you can take some time exploring other food-related franchise opportunities on BusinessesForSale.com.
You can also read our useful franchise guides. These offer credible information on the world of franchising, from how to choose the best franchise to understanding franchise agreements.
Frequently asked questions
How much profit does a McDonald’s franchise make in the USA?
McDonald’s franchisees can expect to make approximately $150,000 in annual profits.
How many US franchises does McDonald’s have?
McDonald’s has around 13,560 franchised restaurants throughout the USA.
Who owns McDonald’s in the US?
McDonald’s in the USA is owned by McDonald’s Corporation, a publicly-traded company listed on the New York Stock Exchange.
The largest shareholders include institutional investors such as The Vanguard Group. The general public, including retail investors, holds about 28% of the shares.