McDonald's Franchise
Cost, fees, owner earnings, closure rate and litigation for a McDonald's franchise — pulled from the franchisor's own public FDD (2024), not its sales material.
Disclosure honesty
McDonald's discloses earnings (Item 19) — but the grade is how honestly. We graded it B.
What their own earnings claim actually says
Sales data for 12,605 domestic traditional restaurants (79% exceed $3M annually). Average sales $4.0M; median $3.84M. Pro forma statements at $3.0M, $3.2M, $3.4M sales levels provided.
What a McDonald's franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $45,000 | Item 5 — paid up front, before you open |
| Royalty | 4.5% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 4% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 8.5% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $522,500 – $2,642,000 | Item 7 — franchisor's own low/high estimate |
Royalty: 5% new/acquired restaurants; 4% existing. Rent: complex percentage-based structure on McDonald's investment. Multiple technology fees ($632-$2,303 annually).
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
McDonald's system size and owner turnover
| Total outlets | 13,457 |
| Ceased operations | 13 |
| Terminated by franchisor | 128 |
| Transferred to new owners | 672 |
| Closure rate | 0.1% of outlets |
2023: 128 terminations, 73 non-renewals, 33 reacquired by franchisor from 12,764 franchised outlets.
From Item 20 of the FDD 2024. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is McDonald's worth it? — how it compares to 164 similar franchises
| Ongoing fees | 8.5% of sales | steeper than 64% of quick service restaurants franchises |
| Startup cost | from $522,500 | about average (median $481,500) |
| Disclosure honesty | Grade B | more honest than 85% of quick service restaurants franchises |
| Closure rate | 0.1% of outlets | better than most (median 1.3%) |
| Disclosed lawsuits | 32 | more litigious than 99% of peers |
Benchmarked against every quick service restaurants franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a McDonald's
The franchisor's framing: Sales data for 12,605 domestic traditional restaurants (79% exceed $3M annually). Average … We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
See a full sample report → · 30-day guarantee
McDonald's franchise — frequently asked
- How much does a McDonald's franchise cost?
- The FDD lists a total initial investment of about $522,500–$2,642,000, including a $45,000 initial franchise fee.
- How much do McDonald's franchise owners make?
- Sales data for 12,605 domestic traditional restaurants (79% exceed $3M annually). Average sales $4.0M; median $3.84M. Pro forma statements at $3.0M, $3.2M, $3.4M sales levels provided. We grade this disclosure B for honesty.
- What are the McDonald's franchise fees?
- McDonald's FDD discloses a $45,000 initial franchise fee, a 4.5% royalty on gross sales, a 4% advertising-fund contribution, for roughly 8.5% of gross sales in recurring fees before rent, labor, or debt service. Royalty: 5% new/acquired restaurants; 4% existing. Rent: complex percentage-based structure on McDonald's investment. Multiple technology fees ($632-$2,303 annually).
- What is the McDonald's franchise profit margin?
- McDonald's does not publish a franchisee net-profit margin — almost no franchisor does. What Item 19 actually shows: Sales data for 12,605 domestic traditional restaurants (79% exceed $3M annually). Average sales $4.0M; median $3.84M. Pro forma statements at $3.0M, $3.2M, $3.4M sales levels provided. Recurring fees alone take about 8.5% of gross sales, before rent, labor, food or debt service. Margin has to be reconstructed from the disclosure, not read off it.
- What is the McDonald's franchise failure rate?
- 2023: 128 terminations, 73 non-renewals, 33 reacquired by franchisor from 12,764 franchised outlets.
- How many McDonald's locations are there?
- McDonald's FDD reports 13,457 total outlets, with 13 that ceased operations in the most recent reporting year and 672 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does McDonald's have complaints or lawsuits?
- McDonald's discloses 32 legal matters in Item 3 of its FDD. Item 3 covers the franchisor's litigation history, which is the closest thing to a public record of how it treats franchisees — read the case descriptions, not just the count.
- Is a McDonald's franchise worth it?
- It depends on the numbers, not the pitch. McDonald's scores B on disclosure honesty, carries about 8.5% of sales in ongoing fees, and discloses 32 legal matters. Get the real owner take-home before you sign.
Own a McDonald's? Add your real numbers (anonymous)
We publish only aggregated benchmarks — never your name. Contribute and we'll show you how your numbers compare.
Compare McDonald's to similar franchises
See all franchises ranked by disclosure honesty →
Source: MN CARDS 32701-202412-04 (Clean FDD 2024). FranchiseValidate is independent and not affiliated with McDonald's or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.