A McDonald’s franchise costs between $1 million to $2.2 million, which includes the $45,000 franchise fee. Franchisees are required to have $500,000 in liquid assets. On average, a McDonald’s franchise owner makes $150,000 annually, though this can vary based on location and tenure.
The average yearly sales at a McDonald’s is $2.7 million, with profitability reliant on managing operating costs and efficiency. McDonald’s promotes the operation of multiple locations by capable individuals and favors experienced business owners. The franchise system also provides comprehensive training and support.
Franchise Fee and Initial Investment
The franchise fee for starting a McDonald’s franchise is $45,000. The total investment required ranges from $1,366,000 to $2,450,000, including the franchise fee. Franchises must cover 40 percent of startup costs with non-borrowed resources, while the remainder can be financed. Royalties are 4% on gross sales, plus an additional brand fund fee.
Opening your first McDonald’s location expects an investment of $1 million to $2.2 million, depending on the location. This amount includes the franchise fee.
Franchise Profitability
Based on data from Glassdoor, the average McDonald’s franchise owner’s annual income ranges between $92,000 and $171,000, with $123,043 as the average. The profitability of a franchise depends greatly on its location and operation.
Qualifying for Franchise Ownership
To qualify for a McDonald’s franchise, you need a net worth of $500,000, with at least half in liquid assets. Prospective franchisees must also have either successful business ownership experience or relevant management experience. For purchasing existing restaurants, a requirement of 25 percent in cash applies, with flexibility in financing options for the remaining amount.
It’s worth noting that the top McDonald’s franchise owners can achieve net sales of up to $9 million. The earning potential is significant if one can invest the initial amount, typically between $1,013,000 and $2,185,000.
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