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Franchise of MacDonald's

McDonald’s has been the subject of two previous blogs, it is a company known by most.  However, what you may not realise is that over 80% of restaurants named McDonald’s are not actually owned by McDonald’s, they are franchisees. This means anyone one of us could own and run a McDonald’s restaurant, as long as we have sufficient funds.

 

So, how much does it cost to own and run a McDonald’s restaurant? First of all there is the one off cost, which ranges between £125,000 – £325,000 and this is dependent on location and size. In additional to this you have a one off franchise fee of £30,000. Both of the costs discussed so far are one off fixed costs.  Following the one off fixed costs you have the ongoing yearly costs, which consist of fixed rental costs and then two variable costs known as service fees and a contributions to the national marketing spend of McDonald’s. The two variable costs are based on sales with the service fee being 5% of sales and the contribution to national marketing costs currently sitting at 4.5%.

Of course, when considering the costs of any business you need to have an estimate of the revenues that you could gain in return and on average McDonald’s state this ranges from £95,000 -£200,000 per year. A potential business idea?

 

General data from: http://www.mcdonalds.co.uk/ukhome/Aboutus/Franchising/the-finance-bit.html?gclid=CjwKEAiAw56lBRCs29jB9uOvkygSJADnD3-6Bqs8NajrjDHTC6o3bzAE400lCd_MFVstgUfYCeL7KRoCkuPw_wcB