Requirements to Open a McDonald’s Franchise
Significant Business Experience:
- Business plan
- Good Credit History
- High-end financial management
McDonald’s Franchise Cost: On-going Fees
Service Fee: A monthly fee of 4% of gross sales
Advertising and Promotion take more than 4% of gross sales
How Much Do the Franchise Owners Make?
The median annual sales volume of franchised McDonald’s restaurants open at least 1 year as of December 31, 2020, was $2,908,000.
Using the median annual sales and the midpoint investment of $1,813,897, we calculated the time it would take for you to recoup your investment. Below are the results of our analysis.
Initial investment (midpoint) | % Profit margin of median franchise sales | Estimated Profits | Time to recoup the investment (including 2.5 years for scaling up) |
---|
$1,813,897 | 10% | $290,800 | 8.5 years |
15% | $436,200 | 6.5 years |
20% | $581,600 | 5.5 years |
With a profit margin of 10% or more, it would take about 8.5 years or less to recoup your initial investment.

Is the Franchise Profit Worth the Franchise Cost?
When you go to sell a McDonald’s franchise based on the median multiple of 0.34 and net sales of $2,908,000 in 2020, it would sell for $988,720. This is lower than the midpoint initial investment of $1,813,897 by about $800k. Therefore, your business would sell for less than your initial total investment.
However, with net sales over $5 million, the median multiple increases to 0.86. Hence, owning multiple franchises whose average net sales are over $5 million would yield a bigger income. For example, if you own 10 outlets, the estimated net sales would be about $29,080,000. With a sell median multiple of 0.86, the resale value of this multi-system business would be $25,008,000. This number is higher than the estimated initial investment of $18,138,970. The business will therefore be worth over $6 million more than your initial investment.