The McDonald's franchise requires a total investment of $1.47M – $2.64M with a 5.0% royalty fee and operates 12,772 units in the QSR category. This report analyzes the full Franchise Disclosure Document including unit economics, fee structure, growth trends, and risk indicators to help you evaluate the cost of investing in McDonald's.
Critical issues identified from FDD analysis that warrant serious consideration before investing.
Composite quality score based on growth, stability, efficiency, fees, transparency, and system size.
Estimated initial investment range as disclosed in the most recent FDD.
| Line Item | Low Estimate | High Estimate |
|---|---|---|
| Franchise Fee | $45,000 | $45,000 |
| Real Estate | $0 | $313,000 |
| Equipment | $1,100,000 | $1,715,000 |
| Inventory | $20,000 | $39,000 |
| Other | $52,500 | $64,000 |
| Training | $3,000 | $40,000 |
| Working Capital | $250,000 | $426,000 |
| Total | $1,470,500 | $2,642,000 |
Ongoing fees as disclosed in the FDD.
| Fee Type | Rate | Type | Basis | Frequency |
|---|---|---|---|---|
| Royalty | 5.0% | PCT | Gross Sales | monthly |
| Rent - Base Rent | N/A | VARIABLE | McDonald's total acquisition and development costs with finance factor applied | monthly |
| Rent - Pass Thru Rent | N/A | VARIABLE | Rent escalations from third party landlord | monthly |
| Rent - Percentage Rent | N/A | VARIABLE | Gross Sales when exceeding base sales figure | monthly |
| Advertising and Promotion | 4.0% | PCT | Gross Sales | annually |
| Audit/Inspection Fee | N/A | VARIABLE | Cost of audit | one_time |
| Satellite Annual Fee | $1,500 | VARIABLE | Per satellite location | annually |
| Satellite Rent | N/A | VARIABLE | Varies by location - determined case-by-case | monthly |
| STO and STR Rent | N/A | VARIABLE | McDonald's total acquisition and development costs | monthly |
| BFL Rent | N/A | VARIABLE | Determined case-by-case | monthly |
| Relocation Contribution | $50,000 | FIXED | Per relocation | one_time |
| Sesame - License Fee | $2,600 | FIXED | Per location adoption | one_time |
| Sesame - Annual Fee | $1,096 | FIXED | Per location per year | annually |
| Global Mobile App / Digital Capabilities | $632 | FIXED | Per location per year | annually |
| McDelivery Integration | $610 | FIXED | Per location per year | annually |
| Self-Ordering Kiosk - License Fee | $1,500 | FIXED | Per location adoption | one_time |
| Self-Ordering Kiosk - Annual Fee | $534 | FIXED | Per location per year | annually |
| Self-Ordering Kiosk Accessibility | $150 | FIXED | Per location per year | annually |
| Hand-Held Order Taker (HHOT) - One-Time Fee | $500 | FIXED | Per location adoption | one_time |
| Hand-Held Order Taker (HHOT) - Annual Fee | $50 | FIXED | Per location per year | annually |
| eProduction | $45 | FIXED | Per location per year | annually |
| Back Office Integration and Enhancements | $755 | FIXED | Per location per year | annually |
| Payments and Fraud Management | $700 | FIXED | Per location per year | annually |
| Employee Engagement Platforms | $391 | FIXED | Per location per year | annually |
| People Data Warehouse (PDW) Reporting | $156 | FIXED | Per location per year | annually |
| Deployment, OTP, Execution and Support | $2,303 | FIXED | Per location per year | annually |
| Restaurant Network Management, Access and Security | $999 | FIXED | Per location per year | annually |
| Restaurant Hardware, Data Movement, Management, and Monitoring | $802 | FIXED | Per location per year | annually |
| Restaurant File Maintenance (RFM) | $565 | FIXED | Per location per year | annually |
| Microsoft License Subscription | $671 | FIXED | Per location per year | annually |
| Pricing Engine | $264 | FIXED | Per location per year | annually |
| Workplace by Meta | $150 | FIXED | Per location per year | annually |
| Store Mail (email accounts) Fee | $74 | FIXED | Per location per year | annually |
Financial Performance Representations not disclosed by this franchisor
Approximately 40% of franchisors choose not to include Item 19 financial performance data in their FDD. This does not necessarily indicate poor performance -- it simply means the franchisor has elected not to disclose this information.
Model your personal financial scenario by adjusting the assumptions below.
Automated risk indicators based on FDD data analysis.
Franchise unit trajectory based on FDD Item 20 data.
| Year | Start | Opened | Closed | Transferred | End | Closure Rate | Net Growth |
|---|---|---|---|---|---|---|---|
| 2021 | 13022 | +101 | -- | 1758 | 12775 | -- | -247 |
| 2022 | 12775 | +84 | -- | 1169 | 12764 | -- | -11 |
| 2023 | 12764 | +128 | -- | 672 | 12772 | -- | +8 |
How McDonald's compares to peer brands in the QSR category.
Ratio = Investment midpoint ÷ median annual revenue. Lower is better. A 0.5x ratio means the initial investment equals half of one year's gross revenue. Does not account for operating costs, margins, or time value of money.
| Brand | Total Units | Investment Range | Median Revenue | Royalty | Inv/Rev Ratio |
|---|---|---|---|---|---|
| Subway | 19502 | $3K – $630K | No Item 19 | -- | -- |
| McDonald's | 12772 | $1.47M – $2.64M | No Item 19 | 5.0% | -- |
| Dunkin' | 8499 | $527K – $1.83M | $1.43M | -- | 0.8x |
| Domino's Pizza | 7043 | -- | $24K | 5.5% | -- |
| Burger King | 6701 | -- | No Item 19 | -- | -- |
| Wendy's | 5552 | $393K – $2.99M | $2.23M | 4.0% | 0.8x |
| Little Caesars | 3705 | $446K – $1.82M | No Item 19 | 6.0% | -- |
| KFC | 3558 | $135K – $3.77M | $1.27M | 5.0% | 1.5x |
| Papa John's | 3291 | $261K – $853K | No Item 19 | 5.0% | -- |
| Popeyes Louisiana Kitchen | 3177 | $505K – $3.92M | No Item 19 | 5.0% | -- |
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