descriptionThe Franchise Dossier
FDD Sourced
Independent analysis. Not affiliated with, sponsored by, or endorsed by McDonald's. All figures sourced from public FDD filings.
Franchise dossier · Quick-service restaurant

Owning a McDonald's: what actually happens

VERDICT · ASSET — IF YOU SCALE
The gold standard of franchising — but McDonald's owns your real estate and your exit, so you're buying a very good job that only becomes real wealth once you own a fleet.
You'd pocket / yr*
$120K–$250K
1 unit · before your salary
Your time
50–60 hrs/wk
owner-operator
Becomes an asset at
~3 units
real wealth: 5-10+
Agreement term
20 yrs
then renewal
Year one, honestly

McDonald's overwhelmingly sells EXISTING, cash-flowing restaurants, so you inherit an operating store on day one — buying in is the hard part (they want ~$500K+ unencumbered cash and you often pay well over the FDD range once goodwill is priced in). Ramp isn't the risk; the debt you took to buy in is. A well-run inherited unit at ~$4M sales is profitable in year one, but percentage rent and loan service eat a big chunk of the margin.

Where each sales dollar goes
Food / goods ~32%Labor ~28%Rent ~13%Franchisor fees ~8%Other opex ~10%Left before debt & you ~14%

Illustrative split for a typical unit (industry estimate). The green slice is store cash flow before your loan payment and before paying yourself a salary — not profit.

If you want out

You can sell, but McDonald's controls the exit: Item 17 requires franchisor approval of the buyer, they hold a right of first refusal, the rent/service fee reset to current rates for the buyer, and the transfer fee runs ~$50K-$100K+. Because McDonald's owns the land and building, you sell the business and equipment, not real estate — a single unit trades on a multiple of cash flow into a deep buyer pool (843 franchisee-to-franchisee transfers in 2024). Walking away isn't clean; you don't own the dirt to fall back on.

Smart for

Operators with $750K+ liquid, an ops background, and the willingness to run one store hands-on then scale to a multi-unit org.

Dumb for

Passive investors expecting a mailbox-money brand-name annuity, or anyone who can't fund the buy-in without over-leveraging.

The disclosure it's built on

The verdict above is our read of the numbers McDonald's files with regulators — here they are, cited.

McDonald'sFDD 2024
Item 5 · Initial franchise fee
$45,000
Item 7 · Initial investment
$1,470,500 – $2,642,000
Item 6 · Royalty
4% + percentage rent
Item 6 · Ad / brand fund
4%+
Item 19 · Avg unit revenue
$3,964,000
Item 20 · US units (~2023)
12,772
SOURCEFranchiseChatter 2024 FDD Talk (from 2024 FDD); cross-checked FranchiseBA, vetmyfranchise. High confidence on fee, investment, royalty, ad fund, Item 19 mean, unit count, and the 0–33.3% percentage-rent range.
The catch

McDonald's is a landlord first and a burger franchisor second. It owns or ground-leases the real estate under nearly every restaurant and re-leases it to you at rent set as a percentage of gross sales — franchised-restaurant rent ran from ~0% up to ~33% of sales in 2023, layered ON TOP of the 4% royalty and 4%+ ad fund. That percentage rent, not the royalty, is McDonald's real profit engine, and it scales with your sales while your food and labor costs do too — so a big Item 19 revenue number does not become proportional owner profit. You can't own your building or freely sell or relocate: the lease is the leash.

*How to read these numbers. Disclosed: investment, ~$45K fee, 4%+4% fees, Item 19 ~$4.0M avg, percentage rent 0-33%. Cost-structure % and $120K-$250K take-home are industry ESTIMATES (Item 19 discloses sales, not a full P&L). Sources: FranchiseChatter FDD Talk 2024/25, Item 17 analyses. — "You'd pocket" is estimated owner cash flow for one average unit before a salary for your own full-time work, so it is not take-home pay. Averages are not promises; your unit could earn far less. This is analysis, not advice — read the current FDD in full and talk to current and former franchisees before you commit.

Seriously considering McDonald's?

Pressure-test the affordability, then read the full FDD and validate Item 19 (or its absence) with existing franchisees. When we add vetted franchise-consultant and financing partners, they'll be clearly disclosed here and never change our analysis.

Run a rough affordability check →