McDonald’s does not develop sites for specific individuals. Our teams build locations, then field officers franchise them. Franchisees cannot select sites or territories. McDonald’s requires a minimum $500,000 in liquid assets and a $45,000 franchise fee. Total startup costs range from $1 to $2.3 million. New locations cost more as they must be built. Buying an existing store costs less since renovations are cheaper than new construction. However, used stores still require some kitchen upgrades.
The monthly service fee is 4% of gross sales. This does not include rent, which averages 8-12% of monthly sales. Overall investment is $500,000 to $2.2 million. Various franchise types exist like traditional, small town, airport, mall, hospital, and more.
Training is required before opening. McDonald’s provides free training but franchisees pay their own expenses. Contracts eventually expire and can be renewed or ended. Profitability depends on location and success but averages 20-25% returns. Many earn $550,000+ yearly. Qualified minorities can apply but competition is stiff. Owning a franchise demands much time.
In 1954, Ray Kroc, a distributor for a special milkshake mixing machine, was intrigued by the McDonald brothers’ need for eight mixers. Realizing that franchisees were vital to the company’s success, Kroc developed exacting standards for how each McDonald’s should be run, from food preparation to cleaning. To ensure the standardized operation of the outlets, he created a program in 1961, later known as Hamburger University, to train franchisees. In addition, he eventually changed the format of the restaurants, adding counter staff to take orders.
The McDonald’s story began as a humble hamburger stand. Through hard work it grew into a legendary global restaurant chain. While costs are high, opportunities and rewards can be great for committed franchisees. It takes heart, soul and a genuine commitment to the communities we serve. We couldn’t be more proud of the leadership our franchisees demonstrate each and every day.