MCDONALD’S Franchise Fee, Revenue, And Profit Margin
How do you own a McDonald’s franchise?
Starting a Mcdonald’s franchise which is a foremost global fast-food chain, offers some exciting prospects for those seeking a partnership as a franchisee and invest in the business. It now has been the destination of choice for all who desire meals, which are affordable and qualitative, on the go.
The following are historical shots that may help in owning a Mcdonald’s Fast food chain:
Do you know how much franchising a Mcdonald’s cost? McDonald’s restaurants, as everyone knows, can be considered as the most popular fast-food chain in the world. They have a presence in most developed countries of the world and the McDonald’s logo is one of the most ubiquitous marketing symbols in any part of the world.
The 1st McDonald’s shop was opened in the year 1940 and it all started as a barbecue restaurant. Currently, they serve close to 68 million customers daily in about 119 countries of the world.
Now the question you want to ask as an entrepreneur is how much is a McDonald’s Franchise?
WHAT ARE THE REQUIREMENTS TO OPEN A MCDONALD’S FRANCHISE?
If you are concerned about the financial implication of opening a McDonald’s Franchise, then you would be asking to know the cost of opening a McDonald’s Franchise. If for instance, you can qualify to open a McDonald’s franchise and you are so much willing to invest your resources, the business can be so much lucrative and eventually change your lifestyle.
Firstly, before we talk about the requirements you need to start up a McDonald’s franchise, let’s go into brief information about the McDonald’s franchise system.
DOES MCDONALD’S SELL FRANCHISE
Does McDonald’s Sell Franchise? If that is the query to want to enquire about. The answer is YES and in the course of the article, you will be enlightened about the information you need to know about how to buy into a McDonald’s Franchise system.
FRANCHISE INFORMATION ABOUT THE MCDONALD’S FRANCHISE SYSTEM
The 1st McDonald’s franchise was sold in 1955 and the company has been dependent on their franchisees for their successes and remain committed to franchising as a means of running their business.
At the moment, McDonald’s franchise is the top global food chain outlet in the world. They have more than 35,000 restaurants in about 110 countries of the world. Within the United States only, there are about 13,000 McDonald’s franchises and 6000 company-owned locations.
If you have the intention of buying a McDonald’s franchise, there is a high possibility of you buying into an existing franchise unit. In the United States, the majority of the new franchisees enter into the business by buying an existing restaurant, either from an existing franchisee or from McDonald’s. It’s just a few percentages of the new operators that enter into the system by buying out rightly a new restaurant.
In most other franchise systems, the franchisee is responsible for the opening of any new location that will meet the standard of the franchisor, and then approval is given. But in the case of the McDonald’s Franchise system, the company acquires the location and then is responsible for the construction of the restaurant building.
HOW MUCH IS A MCDONALD’S FRANCHISE?
If you have been approved to open a new McDonald’s franchise, you should be ready to have an investment in the range of $1,000,000 to $2,000,000 to kick-start the restaurant and this will as well depend on so many factors. For instance, the location at which you plan to set up your restaurant and the design of the store will part of the total cost you will be incurring.
WHAT IS MCDONALD’S FRANCHISE FEE?
As a franchisee, you will be expected to pay an initial McDonald’s franchise fee of $45,000 and if you are given the approval to start a new location, you will be expected to pay 40% of the total cost and you must also have $500,000 liquid assets. You can then get access to loan the remaining 60% of the required funds and then the repayment plan will be spread over 7 years.
DOES MCDONALD’S OFFER ANY FORM OF FINANCING?
While McDonald’s does not offer to finance to its franchisees, you can enjoy the benefits of McDonald’s relation with financial institutions across the country. McDonald’s franchisees enjoy the lowest lending rates found within the industry.
During the period of your franchise, you will be expected to make the following payments to McDonald’s:
- SERVICE FEE: You will be expected to make a monthly service fee, which will be based on your restaurant’s sales performance. The current monthly service fee is 4% of the total monthly sales.
- RENT: You are also expected to make a monthly base rent
OTHER REQUIREMENTS NEEDED TO OPEN A MCDONALD’S FRANCHISE
- BUSINESS EXPERIENCE: You will be expected to have had successful management and ownership of different businesses before you can be considered to buy into a McDonald’s Franchise.
- GROWTH: Individuals who demonstrate the ability to grow rapidly with the company are also given more preferences.
- MANAGEMENT SKILLS: You need to commit to managing the running of the restaurant effectively.
- TRAINING: You also need to show the willingness to participate in an extensive world-class training program. And also to spend 9-18 months working with a restaurant near your home to allow you to become more efficient in the running of a McDonald’s restaurant.
- SUPERB CUSTOMER EXPERIENCE: You must possess the ability to manage effectively an organization that employs trains and then motivates its employees to deliver the best customer experience.