How Much Does It Cost to Own a McDonald's Franchise?

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Ever wondered how much it costs to own a McDonald's franchise. If you are interested, here are the details... direct from the McDonald's site:

Acquiring a Franchise

Most Owner/Operators enter the System by purchasing an existing restaurant, either from McDonald's or from a McDonald's Owner/Operator. A small number of new operators enter the System by purchasing a new restaurant.

The financial requirements vary depending on the method of acquisition.

Financial Requirements/Down Payment

An initial down payment is required when you purchase a new restaurant (40% of the total cost) or an existing restaurant (25% of the total cost). The down payment must come from non-borrowed personal resources, which include cash on hand; securities, bonds, and debentures; vested profit sharing (net of taxes); and business or real estate equity, exclusive of your personal residence.

Since the total cost varies from restaurant to restaurant, the minimum amount for a down payment will vary. Generally, we require a minimum of $750,000 of non-borrowed personal resources to consider you for a franchise. Individuals with additional funds may be better prepared for additional or multi-restaurant opportunities.

Financing

We require that the buyer pay a minimum of 25% cash as a down payment toward the purchase of a restaurant. The remaining balance of the purchase price may be financed for a period of no more than seven years. While McDonald's does not offer financing, McDonald's Owner/Operators enjoy the benefits of our established relationships with many national lending institutions. We believe our Owner/Operators enjoy the lowest lending rates in the industry.

Ongoing Fees

During the term of the franchise, you pay McDonald's the following fees:

  • Service fee: a monthly fee based upon the restaurant's sales performance (currently a service fee of 4.0% of monthly sales).
  • Rent: a monthly base rent or percentage rent that is a percentage of monthly sales.

Source: McDonald's Franchising

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About this Entry

This page contains a single entry by Michael Webster published on January 15, 2015 8:00 PM.

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