McDonald's Franchise Costs, Fees & FDD

Note: FDD pages are provided for informational purposes only. This page is only a brief overview of what is contained in the full franchise disclosure document, which is to be given to the prospective franchisee by the franchise—and receipt of which must be formally notarized between the parties. Independent legal and professional advice should be sought before undertaking any investment in a franchise.

Year Business Began: 1955

Franchising Since: 1955

Headquarters: Chicago, Illinois

Estimated Number of Units: 41,825

Franchise Description: McDonald’s USA, LLC is the franchisor. The franchisor is a wholly owned subsidiary of its parent and predecessor, McDonald’s Corporation. The franchisor develops, operates, franchises, and services a system of restaurants that prepare, assemble, package, and sell a limited menu of value-priced foods under the “McDonald's System.” A grant of a McDonald’s franchise authorizes franchisees to operate a McDonald’s restaurant business at a specific location and to use the McDonald’s System in the operation of that restaurant business for a specific period of time. The franchisor offers four types of franchises:

1. Traditional Restaurant: franchise offered is located in freestanding buildings, storefronts, food courts, and other locations. The franchisee operates a full-menu restaurant, offering the public a high standard of quality and uniformity in food and service.
2. Satellite Locations: The franchisee is granted the right to operate the franchise in a retail store, strip center, airport, universities, hospitals, and other diverse locations. These restaurants serve a scaled-down menu of a traditional McDonald’s restaurant and, in some cases, may also serve non-McDonald’s trademarked products.
3. STO and STR Locations: “Small Town Oil” locations are situated in fuel stations/convenience stores and operate a full-menu McDonald’s restaurant within the shared space. “Small Town Retail” locations that anchor a small retail center in rural communities.
4. BFL Franchises: For “Business Facilities Lease” franchises, the franchisor grants franchises with leases that include the business facilities. These are limited cases.

Training Overview: The franchisor operates Hamburger University (HU), the international training center for the McDonald's system. The content and duration of all operations courses, which are offered at HU and various local sites, are revised and reconsidered from time to time to meet the needs of franchisees. All courses and learning events are offered at frequent intervals and are designed to give franchisees specific skill sets in the various facets of the conduct of a McDonald's restaurant. The basic minimum core training, which franchisees must complete to be qualified to operate a McDonald’s restaurant, is known as the Candidate Development Program. The Candidate Development Program is deployed through Campus and Fred, which allows franchisees to complete and track the progress of their assigned learning online. It can take six months to two years to complete all learning plans, from Shift Leader through Restaurant Leader. The complete training program and materials include many elements. As part of the training program, franchisees must perform and master all of the crew and management functions at the restaurant. At the opening of the restaurant, a franchise business partner will spend time with franchisees providing assistance and refinement of previous training and instruction. Franchisees must complete the training program successfully before signing the Franchise Agreement or paying any money to the franchisor. Annual meetings, conventions, various workshops, and other training sessions may be conducted on an ongoing basis within each field office, and McDonald’s may require franchisees to pay for the costs associated with that ongoing training or participation. Additionally, optional courses may be offered to franchisees or their employees for a fee.

Territory Granted: McDonald’s franchises contain a limited grant of authority to use the McDonald’s system in the operation of the specific restaurant developed by McDonald’s at that address. The Franchise Agreement does not contain any exclusive grant, exclusive area, exclusive territorial rights, protected territory, or any right to exclude, control, or impose conditions on the location or development of future McDonald's restaurants at any time. Franchisees may face competition from other franchisees, from outlets that the franchisor owns, or from other channels of distribution or competitive brands that the franchisor controls.

Obligations and Restrictions: Franchisees are required to provide full time and best efforts to, and personal on-premises supervision of, the day-to-day operation of their McDonald’s restaurant business. Franchisees may sell only products authorized by the franchisor and use the premises only as a McDonald’s restaurant. In the dispensing and sale of these products, franchisees may use only packaging, paper goods, ingredients, and handling and preparation methods that meet the McDonald’s system specifications and quality standards which the franchisor may designate and modify.

Term of Agreement and Renewal: The length of the initial traditional franchise term is generally 20 years. The Satellite term varies, and the length of the franchise term for STO and STR locations are generally 10 years. BFL term length is generally three years. Franchisees are given no right to renew or extend the franchise after the term of the contract. A New Term Policy is not part of the previous Franchise Agreement and is subject to change in McDonald’s sole discretion.

Financial Assistance: Typically, no financing arrangements are offered by the franchisor. As part of the Franchise Agreement, the franchisor issues an Operator's Lease for each site owned or leased by McDonald's. The Operator's Lease is a standard commercial lease under which the franchisee pays rent to the franchisor for use of the premises. The Operator's Lease does not contain any financing terms. For BFL franchises, the Operator’s Lease provides for the lease of the restaurant’s business facilities as well as the premises. The franchisor’s predecessor may, at its discretion, guarantee loans made by a third party lender, Bank of America, N.A., a National Banking Association, to franchisees for remodeling existing restaurants, working capital, refinancing existing restaurant loans, acquiring restaurant businesses, purchasing restaurant assets by exercising the option under a BFL Rider, and for other reasons approved by McDonald’s.

Estimated Initial Investment:

Name of Fee	Low	High
Initial Franchise Fee	$0	$45,000
Real Estate and Building – 3 months’ rent	Base Rent: $0 Percentage Rent: 0%	Base Rent: $313,000 Percentage Rent: 28%
Signs, Seating, Equipment, and Décor	$375,000	$1,715,000
Opening Inventory	$14,000	$39,000
Miscellaneous Opening Expenses	$52,500	$64,000
Travel and Living Expenses while Training	$3,000	$40,000
Additional Funds – 3 months	$80,000	$426,000
ESTIMATED TOTAL*	$522,500	$2,642,000

*The estimated initial investment range covers from satellite location size up to traditional restaurant location size.

 
Other Fees

Type of Fee	Amount
Service Fee	5% or 4% of gross sales, depending on the circumstances.
Rent	Varies.
Advertising and Promotion	Not less than 4% gross sales.
Audit/ Inspection Fee	Cost of audit.
Satellite Annual Fee	$500 to $2,500
Satellite Rent	Varies.
STO Rent	Varies.
BFL Rent	Varies.
Relocation Contribution	$50,000
Point of Sale (POS) – Core Product	$2,600 license fee (one-time fee); $1,058 annual fee.
Global Mobile App/ Digital Capabilities	$900 integration fee (one-time fee); $3,543 annual fee.
McDelivery Integration	$611 annual fee.
Self-Ordering Kiosk	$1,500 one-time licensing fee; $500 integration fee (one-time fee); $512 annual fee.
Digital Menu Boards	$500 integration fee (one-time fee); $107 annual fee.
Self-Ordering Kiosk Accessibility	$150 annual fee.
Hand-Held Order Taker (HHOT)	$500 (one-time fee); $50 annual fee.
eProduction	$34 annual fee.
Back Office Integration and Enhancements	$797 annual fee.
Payments and Fraud Management	$593 annual fee.
Employee Engagement Platforms	$404 annual fee.
People Data Warehouse (PDW) Reporting	$156 annual fee.
Deployment, OTP, Execution and Support	$2,111 annual fee.
Restaurant Network Management, Access and Security	$1,095 annual fee.
Restaurant Data Movement, Management and Monitoring	$546 annual fee.
Restaurant File Maintenance (RFM)	$512 annual fee.
Microsoft License Subscription	$588 annual fee.
Pricing Engine	$132 annual fee.
Workplace by Meta	$250 annual fee.
Store Mail (email accounts) Fee	$73.80 annual fee.

The above information has been compiled from the FDD of McDonald's. Year of FDD: 2024.

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