Food & Beverage

McDonald's Franchise

The world's largest hamburger quick-service chain by unit count, operating under a real-estate-driven model where McDonald's itself owns or leases nearly every restaurant's land and building and franchises the right to operate at that location, rather than a conventional royalty-only structure. McDonald's predecessor began granting franchises in 1955; about 95% of U.S. restaurants are run by independent franchisees today, with the rest company-operated ("McOpCo"). Franchised unit count was roughly flat over the three years shown, a net loss in 2021 offset by small gains in 2022 and 2023.

Opening more locationsFounded 1955HQ: Chicago, IL

Every franchisor has to file a document called an FDD before they can legally sell you a franchise. Buried in it are the two things a sales rep won't volunteer: what you'll actually spend to open, and whether existing locations are opening or closing. That's what's below, pulled straight from McDonald's's own filing.

What it costs to open

From the filing's investment breakdown -- not a "starting at" number a sales rep quoted you.

Franchise fee

$45,000

Total to open

$1,470,500–$2,642,000

Ongoing royalty

5% of gross sales

What you'd actually spend, over time

The upfront cost is only part of it. Plug in what you expect a location to bring in, and see the real total once royalties over a few years are added on top.

Your estimated annual revenue

Defaulted to a rough food & beverage industry average, not a figure from McDonald's's own FDD -- change it to your own estimate.

Years of ownership

Total cost of ownership over 5 years

$1,720,500 – $2,892,000

Startup investment

$1,470,500–$2,642,000

Royalty per year (5%)

$50,000

Total royalty, 5yr

$250,000

When would you break even?

Revenue alone doesn't tell you this -- it depends on what's left after rent, labor, and everything else. McDonald's's FDD doesn't disclose a reliable profit figure (most franchisors don't), so this starts from a typical food & beverage profit margin (~8%) and applies it to the revenue you entered above -- adjust the percentage to your own realistic estimate.

Estimated profit margin (% of revenue)

%≈ $80,000/year

Defaulted to a general food & beverage industry benchmark, not a figure from McDonald's's own filing -- this is a starting point to adjust, not a promise about what franchisees actually make.

At that profit, you'd break even in about

18.4–33.0 years

Weigh that payback period against what you already know: McDonald's is opening more locations. A long payback period on a shrinking brand is a very different bet than the same payback period on a growing one.

Is McDonald's actually growing?

Franchisors have to report, every year, how many locations opened, closed, or changed hands. Most franchise sites never show you this. Here it is:

Locations opened vs. closed, by year

Growing

From Item 20 of McDonald's's FDD, the section franchisors use to disclose real openings and closings.

-247

-11

202120222023

Year	Franchised units, start	Franchised units, end	Net change
2021	13,022	12,775	-247
2022	12,775	12,764	-11
2023	12,764	12,772	+8

Most recent year (2023): gained 8 franchised units, ending the year at 12,772 total.

What you're actually signing up for

The cost and growth numbers above are only part of the picture. These three FDD items are the ones a prospective franchisee tends to weigh most heavily once they're past the sticker price.

Training & ongoing support (Item 11)

Training is delivered through Hamburger University and other designated training centers, and franchisees must enroll their managers; McDonald's also makes its Operations and Training Manual available for review before purchase and provides ongoing consultation through operations consultants, seminars, and printed/online resources. McDonald's does not maintain a central advertising fund -- franchisees participate in local advertising cooperatives and the national OPNAD fund they themselves help set contribution rates for.

Territory protection (Item 12)

The Franchise Agreement grants no exclusive territory, exclusive area, or protected territory of any kind, and explicitly states sales patterns at any location don't represent a continuing entitlement -- McDonald's can develop other franchised or McOpCo restaurants nearby, and reserves the right to sell McDonald's-branded products (like McCafe packaged coffee) through supermarkets, e-commerce, and other channels.

Renewal & termination terms (Item 17)

Traditional restaurant terms run about 20 years. Franchisees have no contractual right to renew or extend -- continuation runs through McDonald's discretionary "New Term Policy," which McDonald's can change at any time and which is not itself part of the Franchise Agreement. McDonald's can terminate for cause on a defined list of material breaches (payment defaults, food-safety violations, unauthorized transfer, and similar).

How McDonald's compares to other Food & Beverage franchises

Across the 52 food & beverage franchises we've hand-verified so far, the typical range to open runs $860,899–$2,165,095, with royalties averaging around 5.6% of gross sales (based on the 48 of them that charge a flat %-of-revenue royalty).

Dave's Hot Chicken

$617,800–$2,170,000 · 6% royalty

Slim Chickens

$1,188,900–$4,944,000 · 5% royalty

Ziggi's Coffee

$315,830–$2,093,361 · 6% royalty

Crumbl

$848,566–$1,472,533 · 8% royalty

Little Caesars

$376,500–$1,769,200 · 6% royalty

Jamba

$480,850–$941,300 · 6% royalty

Tropical Smoothie Cafe

$300,000–$720,500 · 6% royalty

Playa Bowls

$188,675–$636,458 · 6% royalty

Kona Ice

$114,730–$228,601 · non-%-of-revenue royalty

Firehouse Subs

$166,671–$950,351 · 6% royalty

Wingstop

$310,400–$1,048,500 · 6% royalty

Jersey Mike's Subs

$436,176–$1,162,228 · 6.5% royalty

Dunkin'

$532,400–$1,832,500 · 5.9% royalty

Popeyes Louisiana Kitchen

$1,222,045–$3,923,245 · 5% royalty

Del Taco

$1,461,200–$3,313,500 · 5% royalty

Blaze Pizza

$757,000–$1,297,100 · 5% royalty

Church's Texas Chicken

$1,202,400–$1,886,300 · 5% royalty

MOD Pizza

$924,732–$1,220,633 · 5% royalty

Twin Peaks

$2,959,000–$5,734,000 · 5% royalty

Subway

$263,000–$630,000 · 8% royalty

Taco Bell

$1,859,750–$4,312,200 · 5.5% royalty

Domino's Pizza

$231,450–$743,500 · 5.5% royalty

KFC

$2,107,575–$4,155,000 · 5% royalty

Burger King

$2,039,200–$4,730,600 · 4.5% royalty

Chick-fil-A

$317,521–$3,463,155 · non-%-of-revenue royalty

Penn Station

$507,500–$858,750 · non-%-of-revenue royalty

Nekter Juice Bar

$243,155–$647,160 · 6% royalty

Jimmy John's

$366,200–$733,500 · 6% royalty

Sonic Drive-In

$1,485,200–$2,522,900 · 5% royalty

Papa John's

$281,485–$890,267 · 5% royalty

Hungry Howie's Pizza & Subs

$238,982–$697,322 · 5.5% royalty

Jack in the Box

$1,909,500–$4,041,500 · 5% royalty

Wendy's

$1,523,957–$2,992,000 · 4% royalty

Marco's Pizza

$286,477–$811,186 · 5.5% royalty

Pizza Hut

$846,000–$2,130,000 · 6% royalty

Chicken Salad Chick

$777,000–$998,500 · 5% royalty

Teriyaki Madness

$392,667–$1,121,405 · 6% royalty

Cold Stone Creamery

$390,675–$680,775 · 6% royalty

Scooter's Coffee

$1,163,650–$1,345,750 · 6% royalty

Nothing Bundt Cakes

$475,200–$994,100 · 6% royalty

Five Guys

$977,850–$1,375,750 · 6% royalty

Tim Hortons

$427,500–$3,312,500 · 6% royalty

7 Brew

$940,500–$2,283,500 · non-%-of-revenue royalty

Swig

$608,400–$1,718,000 · 7% royalty

Culver's

$3,406,350–$10,294,100 · 4% royalty

Dairy Queen

$1,516,200–$2,543,050 · 4% royalty

Paris Baguette

$727,515–$1,860,550 · 5% royalty

Jollibee

$1,614,568–$4,589,057 · 5% royalty

Smoothie King

$329,850–$683,215 · 6% royalty

IHOP

$380,550–$3,735,850 · 4.5% royalty

Cinnabon

$256,950–$703,500 · 6% royalty

McDonald's Franchise FAQ

How much does it cost to franchise a McDonald's?

Based on McDonald's's own FDD, total initial investment to open one location runs $1,470,500–$2,642,000, including the $45,000 franchise fee. McDonald's only files a Net Worth/Experience Exemption notice, not a full FDD, with California DFPI, so this entry is sourced from Minnesota's CARDS registry instead: FDD issued May 1, 2024 (MN File No. 10, filed 12/31/2024, effective in Minnesota 1/8/2025) -- the most recent Minnesota filing carrying a full clean FDD text (the two more recent 2025/2026 MN filings are marked/redline copies only). Item 5: $45,000 lump-sum initial franchise fee for a conventional restaurant ($22,500 for small-town-oil/small-town-retail locations, $0-$500 for Satellite locations). Item 6: royalty is 5% of Gross Sales for new restaurant openings, McOpCo-sale purchases, and right-of-first-refusal resales effective 1/1/2024; a grandfathered 4% continues to apply to certain existing restaurants changing hands among existing franchisees (family transfers, new term agreements, franchisee-to-franchisee sales, rebuilds). McDonald's also charges Base Rent plus Percentage Rent (0%-28% of Gross Sales) on the land/building it owns or leases to the franchisee -- a bigger and more variable cost than the royalty itself -- plus a 4%-of-Gross-Sales local/national advertising contribution. Item 7: $1,470,500-$2,642,000 TOTAL for a conventional restaurant (separate, lower ranges apply to small-town and Satellite formats). Item 20 Table 1 franchised outlets, for the FDD's own reporting years 2021-2023 (this filing is a year behind the 2023-2025 window used elsewhere in this dataset); company-owned (McOpCo) outlets grew from 657 to 691 in 2022 before easing back to 685 in 2023.

What is the McDonald's franchise fee and royalty rate?

The initial franchise fee is $45,000, and the ongoing royalty is 5% of gross sales, per the filing on record.

Is the McDonald's franchise growing or shrinking?

Growing. Across 2021–2023, McDonald's added a net -250 franchised locations, per its own annual FDD filings.

Keep going

McDonald's and Del Taco are both food & beverage franchises; Del Taco's total investment starts about $9,300 lower than McDonald's's. Del Taco Franchise
McDonald's and Sonic Drive-In are both food & beverage franchises; McDonald's's total investment starts about $14,700 lower than Sonic Drive-In's. Sonic Drive-In Franchise

Where this came from: McDonald's only files a Net Worth/Experience Exemption notice, not a full FDD, with California DFPI, so this entry is sourced from Minnesota's CARDS registry instead: FDD issued May 1, 2024 (MN File No. 10, filed 12/31/2024, effective in Minnesota 1/8/2025) -- the most recent Minnesota filing carrying a full clean FDD text (the two more recent 2025/2026 MN filings are marked/redline copies only). Item 5: $45,000 lump-sum initial franchise fee for a conventional restaurant ($22,500 for small-town-oil/small-town-retail locations, $0-$500 for Satellite locations). Item 6: royalty is 5% of Gross Sales for new restaurant openings, McOpCo-sale purchases, and right-of-first-refusal resales effective 1/1/2024; a grandfathered 4% continues to apply to certain existing restaurants changing hands among existing franchisees (family transfers, new term agreements, franchisee-to-franchisee sales, rebuilds). McDonald's also charges Base Rent plus Percentage Rent (0%-28% of Gross Sales) on the land/building it owns or leases to the franchisee -- a bigger and more variable cost than the royalty itself -- plus a 4%-of-Gross-Sales local/national advertising contribution. Item 7: $1,470,500-$2,642,000 TOTAL for a conventional restaurant (separate, lower ranges apply to small-town and Satellite formats). Item 20 Table 1 franchised outlets, for the FDD's own reporting years 2021-2023 (this filing is a year behind the 2023-2025 window used elsewhere in this dataset); company-owned (McOpCo) outlets grew from 657 to 691 in 2022 before easing back to 685 in 2023. You can pull the same filing yourself from the California DFPI's public franchise search. Filed 2025-01-08. None of this is investment advice -- get the franchisor's current FDD and talk to a real attorney or accountant before you sign anything.

If you see a different unit count elsewhere: franchisors only have to refile their FDD annually, so the numbers here can run 6–18 months behind a franchisor's own real-time marketing claims -- which often aren't independently verified, and sometimes count signed-but-not-yet-open locations. A gap isn't necessarily an error on either side; it's two different snapshots in time from two different sources.