The McDonald’s franchise fee is $45,000. The total cost of opening a franchise store is between $1 to $2.2 million. Franchises must have $750,000 in liquid capital. Franchises must pay 40 percent of the startup costs in cash. The rest can be financed.
When purchasing an existing restaurant, you pay 25 percent in cash. The rest can come from shares, stocks, etc.
To qualify for a McDonald’s franchise, you need $500,000 in liquid assets and 3 years business ownership experience.
The initial investment for a new McDonald’s franchise ranges from $1,314,500 to $2,306,500. This includes a $45,000 franchise fee.
The average McDonald’s franchise owner makes $150,000/year. This varies by location and experience.
McDonald’s receives the majority of franchise revenue through royalties and fees. Franchisees pay a 4% royalty on gross sales, plus over 4% in additional brand fund fees. McDonald’s aims to have 95% franchised and 5% company-owned locations.
The high startup costs can pay off for franchisees, with the potential for strong profits. However, McDonald’s corporate still makes the lion’s share from its franchise model.