McDonald’s Franchise Owner Salary, Cost, Profit 2024

McDonald’s, the biggest name in the fast-food chain industry, and is quite a profitable business opportunity to invest in, but what does it take to be a McDonald’s franchise owner?

How much does a McDonald’s franchise owner make? How much money should you have? What are the pros and cons of this franchise?

Find out answers to all your burning questions related to McDonald’s franchises in this easy-to-read guide!

How Much Does A  McDonald's Franchise Owner Make

About McDonald’s

McDonald’s is a well-known international fast-food chain, it was originally founded by two brothers, Maurice and Richard Macdonald, but Ray Kroc saw an opportunity in this business In the year 1955 and thus founded McDonald’s System, Inc.

Consequently, after six years, he bought exclusive rights to the name McDonald’s, and by 1958, this fast-food giant sold its 100 millionth hamburger.

Currently, McDonald’s has more than 38,000 locations in 100 countries and counting.

A McDonald’s franchise is a golden opportunity for an entrepreneur who is willing to invest in an enthusiastic franchise and wants to make a lot of money.

But getting your hands on McDonald’s franchise is not easy; want to find out why? Keep reading!

((https://www.mcdonalds.com/us/en-us/about-us/our-history.html))

Is McDonald’s A Franchise?

Yes, McDonald’s is indeed a franchise. It operates on a franchise business model, which means that individuals or groups can purchase the rights to operate a McDonald’s restaurant in a specific location.


McDonald’s Franchise Key Investment Figures

Cost Or FeesAmount
Franchise fee$45,000
Royalty fee4%
Marketing fee4%
Investment (mid-point)$1,908,000
Minimum liquid capital$500,000

How Much Does It Cost to Open A McDonald’s Franchise?

To open a McDonald’s franchise, the key investment figures include a franchise fee of $45,000, a royalty fee of 4%, and a marketing fee of 4%. The total investment required, at the mid-point, is approximately $1,908,000.

Additionally, aspiring franchisees should have a minimum liquid capital of $500,000. These figures represent the estimated costs involved in opening a McDonald’s franchise.


How Much Does A McDonald’s Franchise Owner Make?

McDonald’s serves approximately 69 million customers daily and thus makes a very handsome amount of sales.

Although, the sales of different McDonald’s franchises may vary from each other depending on their location, size, type of business model, operating expenses, etc.

According to data, McDonald’s Franchise Owners make annual net sales of $2.7 million on average, with top franchise owners making net sales of as much as $9 million.


How Much Does McDonald’s Employee Earn?

The salary of a McDonald’s employee may vary depending on their experience level, location, department, skills, designation, etc.

However, according to Indeed, the average hourly pay for a McDonald’s employee ranges from $8.25 per hour for an entry-level position, say of an Order Taker, to $20.22 per hour for a position of Maintenance Technician.

If we see this figure in yearly terms, then the average McDonald’s employee pay ranges from approximately $18,000 per year for the position of Team Trainer to $86,784 per year for the position of Project Manager.


Pros And Cons Of McDonald’s Franchise

Pros Of McDonald’s Franchise

  • Offers quality food.
  • Highly profitable.
  • Huge customer base.
  • Global presence.

Cons Of McDonald’s Franchise

  • High-cost investment.
  • Low profit margin.
  • Rigourous training process.
  • Strict eligibility criteria.

McDonald’s Franchise Average Revenue & Profit

McDonald's Franchise Average Revenue & Profit
McDonald’sAmount
Annual Revenue$2.7 million
Profit Margin6% – 8%
Yearly Profit$189,000 (approximate average)

As mentioned earlier, a McDonald’s Franchise owner makes $2.7 million in revenue every year on average.

However, because of n number of expenses, including operating costs, crew payroll, food costs, etc., franchise owners are left with a meager profit margin of 6% -8% only.

Hence, with a profit margin of 6%, McDonald’s Franchise owner makes yearly profits of $189,000 on average.

This is how we calculated this amount:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%2700000.00
Rent11.63%(313875.00)
Insurance5.81%(156937.50)
Salaries23.25%(627750.00)
Franchise Royalty Fees5.81%(156937.50)
Utilities2.33%(62775.00)
Cost of Goods Sold (COGS)29.06%(784687.50)
Labor (Variable)15.11%(408037.50)
Total (Expenses)93.00%(2511000.00)
Net Profit7.00%189000.00

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.

What Is Mcdonald’s Franchise Owner Salary?

The average salary for a McDonald’s franchise owner, taking into account the profit margin of 7%, is approximately $189,000 per year.


McDonald’s Franchise Failure Rate

To find out the McDonald’s franchise failure rate let us have a look at this table below:

System-wide McDonald’s Outlet Summary for 2019-2021

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201913,22913,185-44
202013,18513,022-163
202113,02212,775-247

For the Franchised outlets:

  • In 2019, the failure rate was (44)/13,2291×100≈0.33%
  • In 2020, the failure rate was (163)/13,185×100≈1.24%
  • In 2021, the failure rate was (247)/13,022×100≈1.90%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2019683659-24
2020659657-2
2021657661+4

For the Company-Owned outlets:

  • In 2019, the failure rate was (24)/683×100≈3.51%
  • In 2020, the failure rate was (2)/659×100≈0.30%
  • In 2021, the growth rate was (4)/657×100≈0.60%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
201913,91213,844-68
202013,84413,679-165
202113,67913,436-243

For Total outlets:

  • In 2019, the failure rate was (68)/13,912×100≈0.48%
  • In 2020, the failure rate was (165)/13,844×100≈1.19%
  • In 2021, the failure rate was (243)/13,679×100≈1.77%

From the above-mentioned data, we can see that the franchised outlets for McDonald’s declined from 2019 to 2021, showing a failure rate between 0.33% and 1.90%.

On the other hand, for company-owned outlets, the failure rate of McDonald’s was lying in the range between 3.51% and 0.30% in 2019 and 2020. The company experienced an incraese in the number of outlets in 2021, showing a growth rate of 0.60%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the McDonald’s franchise has declined in the years 2019-2021, showing a total failure rate between 0.48% and 1.77%.


McDonald’s Franchise Payback Period

To calculate the McDonald’s franchise payback period let us quickly do some calculations:

AVERAGE INVESTMENT$1,908,000
AVERAGE REVENUE PER OWNER$2,700,000
AVERAGE PROFIT PERCENTAGE7%
AVERAGE PROFIT PER YEAR$189,000 
AVERAGE PAYBACK PERIOD12 years

PAYBACK PERIOD = TOTAL INVESTMENT / PROFIT PER YEAR

= 1908000/189,000 = 12.72 = 12 Years based on median

The average investment for a traditional McDonald’s Franchise is $1,908,000.

With an average profit percentage of 7%, the average profit per year is $189,000.

This means that the average payback period for a McDonald’s Franchise is 12 years, and the total investment of $1,908,000 would be recouped within this period.


McDonald’s Might Be The Hardest Franchise To Get

Owning one of the most well-known fast-food brands in the world does not come easy. In order to be eligible for a McDonald’s franchise, you must meet the following criteria:

  • Have the ability to put in an initial investment of $1,366,000 to $2,450,000 without any partnership or financing.
  • Have minimum liquid capital of $500,000.
  • Pay $45,000 as a franchise fee.
  • Attend training that lasts for 6-18 months.

Facts About McDonald’s

Facts About McDonald's
  • In 1975 McDonald’s opened its first drive-through was inspired by the military.
  • There are more McDonald’s outlets in the U.S. than hospitals.
  • McDonald’s invested in Chipotle in 1998, and by 2006, it owned almost 90% of Chipotle.
  • Coca-Cola in McDonald’s tastes different because it is delivered to McDonald’s in steel tanks, whereas at other places, it is delivered in plastic.
  • McDonald’s serves approximately 69 million customers daily across the world.
  • McDonald’s menus are different across the world and have some items that are suitable to the local taste.
  • The largest McDonald’s in the world is situated in Orlando, Florida.
  • The Orlando branch lets customers create a custom deluxe sundae dessert.
  • They also have stools that allow the customers to watch the employees prepare their food.
  • The smallest McDonald’s outlet is in Tokyo.
  • McDonald’s didn’t hire female employees initially because the owner thought that would attract displeasing teenage boys.
  • Walt Disney and Ray Kroc were colleagues during their training for ambulance drivers for WW1. 
  • The famous “I’m lovin’ it” ad campaign was launched in 2003 and was McDonald’s first ad campaign.
  • With a revenue of a whopping $24 billion, McDonald’s is the 90th largest economy in the world.
  • Rachel McAdams worked at McDonald’s.
  • There is a floating McDonald’s in Vancouver, Canada, called “McBarge.”
  • In every 14.5 Hours, a new McDonald’s opens up.
  • The queen of England also owns a McDonald’s.
  • McDonald’s in Hong Kong caters to weddings.
  • McDonald’s is banned in Bermuda, Macedonia, Montenegro and Kazakhstan.

((https://facts.net/mcdonalds-facts/))


What Is McDonald’s Best Known For?

What Is McDonald's Best Known For
What Is McDonald’s Best Known For

McDonald’s is well known fast-food giant and is known for its delicious french fries, cheeseburgers, and hamburgers.

Although its menu includes a variety of items such as fish, salads, chicken, etc., its best-selling items are french fries, followed by the Big Mac.

The founder of McDonald’s, Ray Kroc, wanted to start a restaurant that would be known for providing consistently high-quality food, and this is exactly what McDonald’s follows today.

This, along with quality ingredients, affordable prices, and consistent taste, is the reason behind the success and popularity of McDonald’s.

Here’s a list of the most loved items on the McDonald’s menu:

  • McGriddles Breakfast Sandwich
  • Double Cheeseburger
  • Premium Salads
  • Chicken McNuggets
  • Baked Apple Pie
  • Egg McMuffin
  • Happy Meal
  • Snack Wrap
  • Big Mac
  • French Fries

Is The McDonald’s Franchise profitable?

Is The McDonald's Franchise profitable?

Yes, The McDonald’s franchise is very profitable, with franchise owners earning $189,000 a year on average in profit.

However, as compared to the initial investment amount of $1,366,000 to $2,450,000 that the franchises are supposed to put in, the profit seems quite less.

Not to mention, in spite of a good profit range, you, as a franchise owner, would be able to enjoy all of it once the investment amount is recovered, and that can take 8-12 years.

So McDonald’s franchise is profitable, but is it worth it? That’s for you to think.


McDonald’s Franchise Earning Potential

As mentioned earlier, a McDonald’s Franchise owner make $189,000 in net profit on average, which is at par with $2.7 million of median sales.

However, there are outlets that have generated over $9 million in sales, and as such, they must have generated quite a lot of profit.

So, in short, McDonald’s has the potential to make a good profit. And the fact the sales of McDonald’s have increased over the years strengthen this point.


Wrap Up

After looking at the details of McDonald’s franchise closely, here’s what we think:

McDonald’s is definitely a profitable franchise to invest in, with the potential to make more money. However, it might take 8-12 years for you to recoup your initial investment, which is a lot.

It is counted amongst the 10 biggest franchises in the world that you can own.

Also, in order to be eligible, you cannot take financing help for putting in the initial investment amount, and even if you qualify for this, you would have to attend 6-18 months of training which is all very rigorous.

Now if you have this kind of investment, are willing to undergo a long period of training, and are willing to wait for years before you actually start to keep most of the profit earned in your pocket, then only then should you invest in this franchise.


Frequently Asked Question

How much royalty and marketing fees does McDonald's charge to its franchises?

McDonald’s charges 4% of net sales as their royalty fees and an additional 4% on gross sales plus brand fund fees for their marketing fees.

What is McDonald's franchise fees?

McDonald’s charge a franchise fee of $45,000.

Can I buy McDonald's franchise in partnership?

No, McDonald’s does not allow you to buy its franchise in a partnership or take help from investors.

What Is McDonald's Profit Margin?

On average, McDonald’s franchise owners tend to have profit margins in the range of 6% to 8%

Who owns McDonald’s?

McDonald’s is owned by different shareholders as it is a publicly-traded company. Most of the company’s shareholders are institutional investors.

Who founded McDonald’s?

The real owners of McDonald’s is Richard James McDonald’s and Maurice James McDonald’s. However, in 1961, Raymond Albert Kroc, an American businessman purchased the company from the McDonald’s brothers.

Where is McDonald’s headquartered?

The headquarters of McDonald’s is located in Chicago, Illinois, United States.

How many location does McDonald’s has?

As of 2023, there are more than 36,000 restaurants in over 119 countries.

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