Business Insights

How Much Do McDonald's Franchise Owners Earn?

Ken Metral

11 Nov 2024 — 1 min read

Image Credit: McDonald's Corporation

Owning a McDonald's franchise can be a lucrative venture, but it requires substantial initial investment and ongoing expenses. On average, a single McDonald's franchise generates approximately $2.7 million in annual sales.

Initial Investment and Fees

Prospective franchisees need a minimum of $500,000 in liquid assets. The total startup costs typically range from $1 million to $2.2 million, depending on the restaurant's location and size. This includes a franchise fee of $45,000.

Ongoing Costs

Franchise owners are responsible for several ongoing fees:

Service Fee: 4% of monthly sales.
Rent: Averages around 10.7% of sales.
Marketing Contribution: Approximately 4.3% of net sales.

Additionally, costs for equipment upgrades, staffing, and menu changes can impact profitability.

Earnings

After accounting for expenses, franchise owners typically earn about $150,000 per store annually. This figure can vary based on factors like location, management efficiency, and market conditions.

While owning a McDonald's franchise offers the potential for significant income, it requires careful financial planning and management to navigate the associated costs and maximize profitability.

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