What are the
Initial franchise fee
Initial Franchise Fee ($45,000)
The initial franchise fee for a traditional McDonald's franchise is $45,000. This fee is due in full at the beginning of the new term franchise. The fee may be higher than $45,000 depending on the time the new term franchise begins. However, there are certain exceptions and variations to this fee based on the type of location and other factors. For instance:
- Franchisees of Satellite locations are required to pay a $500 initial franchise fee upon opening of the Satellite.
- Franchisees of STO and STR locations pay a $22,500 lump sum initial franchise fee.
Service Fee (4% of Gross Sales)
The service fee is a monthly fee based on the gross sales of the franchise. This fee is payable monthly on the 10th day of the next month.
The rent varies and is payable on the 1st day of the month. The base rent and pass thru rent, if applicable, are both due on this date.
Advertising Fee (Varies)
Most franchisees participate in local advertising cooperatives and the national advertising fund (OPNAD). The contribution rates are established by the franchisees and, depending upon then-current advertising costs and needs, may or may not exceed the required 4% of Gross Sales. "Grand Opening" promotions are strongly recommended.
Technology Fees (Varies)
There are various technology fees associated with different software and platform maintenance, including Point of Sale (POS) software maintenance, digital technology software maintenance, kiosk technology software maintenance, and others. These fees cover the support, integration, and localization of the respective technologies.
How much does
to start a
Starting a McDonald's franchise involves various costs, and the total investment range is estimated to be between $521,000 to $2,503,000. Below is a breakdown of the costs associated with starting a McDonald's franchise, as outlined in the FDD:
It's important to note that the real estate costs are a significant part of the total investment, and the costs can vary significantly based on the location and size of the restaurant.
Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.
McDonald's provides training for franchisees through a structured program. Here are the key points regarding the training provided:
Franchisees are granted the limited right to operate a McDonald's Restaurant at a specific location designated by McDonald's. The rights granted are limited to the franchised business location and any additional business locations designated under an Additional Business Amendment to the Franchise Agreement.
If McDonald's offers the opportunity to operate a food truck as an extension of an existing McDonald's Restaurant location, the food truck can only be used and operated at locations registered and approved by McDonald's.
This means that while franchisees have a specific location to operate, they do not have a broader exclusive territory, and their operations are confined to the designated and approved locations.
be run as
McDonald's expects the franchisee to be actively involved in the operation of the restaurant. The franchisee is required to personally devote full time and best efforts to the operation of the restaurant business.
This requirement is highlighted in the new term franchise ownership section, where it is stated that the franchisee will be the "approved operator(s)" of the restaurant and is expected to personally devote full time and best efforts to the operation of the restaurant business.