MCDONALD’S Franchise Startup Cost, Profit Margin, Revenue and Locations
How do you own a mcdonald’s franchise? Starting a Mcdonald’s franchisewhich is a foremost global fast food chain, offers some exciting prospects for those seeking to partnership as a franchisee and invest in the business. It now as been the destination of choice for all who desire meals, which are affordable and qualitative, on the go.
The following are historical shots that may help in owning a Mcdonald’s Fast food chain:
• The first McDonalds restaurant was operated by brothers Dick and Mac McDonald in San Bernardino, California. In 1954 Ray Kroc visited the eatery and was so amazed by the efficiency and effectiveness of their operation that he proposed the establishment of McDonalds restaurants all over the US. At last, he went on to become the owner of the Macdonald business, after he paid a considerable sum for the brand.
• By 1958 McDonalds had served 100 million hamburgers to hungry customers.
• 69 million customers are served on a daily basis.
• At the moment, there are 36,258 McDonalds restaurants in 119 countries, out of which 29,544 are operated as a franchise.
• Some 350 McDonalds restaurants have been closed down so far this year, due to business violations. Majority of these shut branches are in the US and China.
• 32% of the groups total annual revenue comes from the US
• 40% of the groups total revenue comes from Europe – mostly from the UK, France, Russia and Germany.
• 23% of total revenue comes from Asia/Pacific, Middle East and Africa.
• US sales depreciated by 2.1% to $27.4bn (£17bn) in 2014.
• The number of customer visits, on a daily basis, declined by more than 4% in the US in 2014.
• McDonald’s has 420,000 employees on its payroll.
• Over 80,000 people have graduated from McDonalds Hamburger University training facility, located on outskirts of Chicago, since its inception.
• McDonald’s has resolved to pay $9.90 an hour to its staff after months of protest over poor remuneration. The current hourly wage is $9.01.
McDonald’s franchise has helped a lot of entrepreneurs around the globe. They create a system that is so easy for any gifted entrepreneur to run with.
Becoming a franchisee with McDonald’s opens the door to be in charge of a franchise business , whose brand and work ethic have come to be trusted over the years, by millions of customers worldwide.
Franchising is by no means a stroll in the park. Building and leading a team 70+ employees as well as administering a thriving business will demand time, investment and determination.
The steps and requirements it takes to getting franchisee license with Mcdonald is a thorough and extensive exercise, usually spanning about nine months, from when one’s application is adjudged successful. The steps include:
McDonald Application Process
The process is kick started with interested individuals and business concerns sending in an application. At this stage it is imperative that applicants have all required documentation and information, which includes bank and financial statements, franchise disclosure document mcdonalds, references amongst others.
Security and background checks
Mcdonald will act on submitted personal and business information, to ascertain the authenticity of such data, as well as to determine that applicants are legally able to run a franchise of Mcdonald.
A first Interview
Shortlisted applicants from the first screening exercise are usually interviewed by a panel of management personnel. This session aims to give applicants the opportunity to express their ambitions and to give reasons why they think the business will be a success.
At this stage, applicants are given the franchise opportunity to experience live, the day-to-day running of an existing franchise, in order to come to grasp of what is demanded as a potential franchisee. The internship usually lasts for 5 days.
Question and Answer session with older franchisees
At this stage, applicants join existing franchise owners, in a convivial atmosphere to ask questions on areas touching any aspect of the Mcdonald franchise business. This is an opportunity for applicants to really determine if the franchise is meant for them.
Successful applicants are now on the brink of joining the Mcdonald family. Hence they have an audience with senior and executive management staff.
Shortlisted candidates will undergo a minimum of a nine-month training and immersion program. This training takes place in existing restaurants and in the classroom. The training is unpaid, although applicants will be required to pay 800 USD non-refundable training fee and a refundable security deposit of 6,000 USD.
Applicants are also responsible for accommodation and other costs associated with trainings undergone away from home.
As soon has the applicant has successfully completed the training regime, Mcdonald will make arrangements to offer such candidates their first franchise. Upon acceptance, the franchise is set up for the applicant to begin to operate. On an agreed date, the keys to a franchise, as well as the daily running of the restaurant is handed to the new McDonald franchisee, under the support and advice of a Mcdonald business consultant.
The following statistics are associated with becoming and operating a Mcdonald Franchise:
• How much does a McDonald franchise cost in the USA? Restaurants typically cost between £150,000 and £400,000 to purchase.
• You’ll need to provide 25% of the investment in personal funds upfront the rest can be funded through a bank loan. McDonald may come in an advisory capacity, in helping applicants source for financial instruments.
• Shortlisted candidates will need to pay a one-time mcdonald franchise fee of £30,000.
• Training costs in the sum of £750.
• Candidates are required to pay a refundable £5,000 security deposit when you start your training, which we’ll refund when you buy your first mcdonald restaurant offered for sale.
Do you know how much franchising a MCDonalds cost? McDonald’s restaurants, as everyone knows, can be considered as the most popular fast food chain in the world. They have a presence in most developed countries of the world and the McDonald’s logo is one of the most ubiquitous marketing symbols in any part of the world. The 1st McDonald’s shop was opened in the year 1940 and it all started as barbecue restaurant. Currently they serve close to 68 million customers daily in about 119 countries of the world. Now the question you want to ask as an entrepreneur is how much is a McDonald’s Franchise?
WHAT ARE THE REQUIREMNENTS TO OPEN A MCDONALD’S FRANCHISE?
If you are concerned about the financial implication of opening a McDonald’s Franchise, then you would be asking to know the cost of opening a McDonald’s Franchise. If for instance, you are able to qualify to open a McDonald’s franchise and you are so much willing to invest your resources, the business can be so much lucrative and eventually change your lifestyle.
Firstly, before we talk about the requirements you need to start up a McDonald’s franchise, let’s go into a brief information about the McDonald’s franchise system.
DOES MCDONALD’S SELL FRANCHISE
Does McDonald’s Sell Franchise? If that is the query to want to enquire about. The answer is YES and in the course of the article, you will be enlightened about the information you need to know about how to buy into a McDonald’s Franchise system.
FRANCHISE INFORMATION ABOUT THE MCDONALD’S FRANCHISE SYSTEM
The 1st McDonald’s franchise was sold in 1955 and the company has been dependent on their franchisees for their successes and remain committed to franchising as a means of running their business.
At the moment, the McDonald’s franchise is the top global food chain outlet in the world. They have more than 35,000 restaurants in about 110 countries of the world. Within the United States only, there are about 13,000 McDonald’s franchises and 6000 company-owned locations.
If you have the intention of buying a McDonald’s franchise, there is a high possibility of you buying into an existing franchise unit. In the United States, majority of the new franchisees enter into the business by buying an existing restaurant, either from an existing franchisee or from McDonald’s. It’s just a few percentages of the new operators that enter into the system by buying out rightly a new restaurant.
In most other franchise systems, the franchisee is responsible for the opening of any new location that will meet the standard of the franchisor and then approval is given. But in the case of the McDonald’s Franchise system, the company acquires the location and then are responsible for the construction of the restaurant building.
WHAT IS THE COST OF A MCDONALD’S FRANCHISE?
If you have been approved to open a new McDonald’s franchise, you should be ready to have an investment in the range of $1,000,000 to $2,000,000 to kick-start the restaurant and this will as well depend on so many factors. For instance, the location at which you plan to set up your restaurant and the design of the store will part of the total cost you will be incurring.
WHAT IS MCDONALD’S FRANCHISE FEE?
As a franchisee, you will be expected to pay an initial McDonald’s franchise fee of $45,000 and if you are given the approval to start a new location, you will be expected to pay 40% of the total cost and you must also have $500,000 liquid assets. You can then get access to loan the remaining 60% of the required funds and then the repayment plan will be spread over 7 years.
DOES MCDONALD’S OFFER ANY FORM OF FINANCING?
While McDonald’s does not offer financing to their franchisees, you can enjoy the benefits of McDonald’s relation with financial institution across the country. McDonald’s franchisees enjoy the lowest lending rates found within the industry.
During the period of your franchise, you will be expected to make the following payments to McDonald’s:
- SERVICE FEE: You will be expected to make a monthly service fee, which will be based on your restaurant’s sales performance. The current monthly service fee is 4% of the total monthly sales.
- RENT: You are also expected to make a monthly base rent
OTHER REQUIREMENTS NEEDED TO OPEN A MCDONALD’S FRANCHISE
- BUSINESS EXPERIENCE: You will be expected to have had successful management and ownership of different businesses before you can be considered to buy into a McDonald’s Franchise.
- GROWTH: Individuals who demonstrate the ability to grow rapidly with the company are also given more preferences.
- MANAGEMENT SKILLS: You need to have a commitment to manage the running of the restaurant effectively.
- TRAINING: You also need to show the willingness to participate in an extensive world class training program. And also to spend 9-18 months working with a restaurant near your home to allow you become more efficient in the running of a McDonald’s restaurant.
- SUPERB CUSTOMER EXPERIENCE: You must possess the ability to manage effectively an organization that employs trains and then motivates its employees to deliver the best customer experience.