With over 36,000 stores and counting, McDonald’s maintains a strong presence nationally and worldwide. Ever thought about owning one and perhaps wondering how much the McDonald’s franchise cost is? Check out how you can own a McDonald’s franchise and how much you should prepare if you’ll decide to get one.
McDonald’s Store Franchise and Market
Before the world was introduced to the famous McDonald’s golden arches, The McDonald brothers (Dick and Mac) started their venture as a drive-in restaurant in the late 1940s. As their success flourished, they franchised their drive-in to nine locations.
When Ray Kroc came into the picture, he saw the restaurant’s potential. So, he became the brothers’ franchising agent, and by 1955, he established his first McDonald’s in Des Plaines, Illinois. This store followed the redesign integrating the golden arches.
McDonald’s then started its international operations back in the ‘60s when the franchises opened in Canada and Puerto Rico. Since then, more franchises have opened globally, with franchises available in countries like the United Kingdom, Philippines, Australia, and Japan. Thus, McDonald’s has become a notable global brand.
The fast-food chain faces stiff competition from local and national quick-service restaurants (QSR) and other foodservice businesses. KFC, Wendy’s, and Burger King are its biggest competitors nationally and globally. Still, McDonald’s maintains high rankings in different company or brand lists.
QSR Magazine lists McDonald’s at the top of their rankings. On the Forbes 2020 Global 2000, McDonald’s snags the 209th spot. In 2019, McDonald’s reigned over the Franchise 500 list. However, Dunkin’ and Taco Bell overtook the fast-food chain in the 2020 ranking, dropping to number 3. On the other hand, Interbrand lists the QSR at number 9, the only fast-food chain making it to the top 10.
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How Much Does a McDonald’s Franchise Cost?
Based on the McDonald’s Franchise Disclosure Document, you should have a total investment starting at $1,314,500. It can go upwards to $2,306,500. You’ll also have to pay a franchising fee of $45,000.
According to McDonald’s, they advise you have at least $500,000 non-borrowed personal resources to qualify for a franchise. Plus, McDonald’s requires you to pay an initial down payment of 40% (of total cost) for a new location or 25% (of total cost) for an existing location.
Below is the table that breaks down the initial investment costs.
Initial Cost Breakdown
Name of Fee
Low
High
Initial Franchise Fee
$0
$45,000
Real Estate and Building – 3 months’ rent
Base Rent: $0Percentage Rent: 0%
Base Rent: $229,000Percentage Rent: 28%
Signs, Seating, Equipment, and Décor
$325,000
$1,550,000
Opening Inventory
$10,000
$35,000
Miscellaneous Opening Expenses
$46,500
$56,500
Travel and Living Expenses while Training
$3,000
$36,000
Additional Funds – 3 months
$80,000
$355,000
ESTIMATED TOTAL*
$464,500
$2,306,500
Ongoing Cost Breakdown
Aside from the initial McDonald’s franchise cost, you have to pay a 4% service fee and rent. Plus, you’ll also have to take note of annual fees in the POS and other management software applications.
Check the table below for the ongoing cost breakdown for a McDonald’s franchise.
$1,000 one-time licensing fee; $1,000 annual fee (for kiosk only restaurants without outdoor digital menu boards, the licensing fee, and annual fees are each reduced to $500).
Kiosk Software – (McD Corp)
$1,500 one-time licensing fee; $350 annual fee.
How Do I Start a McDonald’s Store Franchise?
To start the McDonald’s franchise, you need to ensure that you have (more than) enough of the initial investment required by McDonald’s. If you have the cash to start the franchise, you can fill out and submit their free form online on their website. Otherwise, download the form and send it via email or fax. By then, McDonald’s will have to undergo an interview and an extensive 18-month long training process, if you qualify.
Now that you have an overview of the McDonald’s franchise cost and other requirements, it’s time you decide if owning a McDonald’s would become a good fit for you.
Summary: Chick Fil-A is a safe bet for a restaurant franchise. The low starting cost makes this one of the most sought-after franchises for first-time owners.
Summary: Burger King is a tried and true franchise with worldwide appeal and recognition. The high starting cost can turn away some prospective franchise buyers, however, the payout after 5 years is worth the investment.
Jersey Mike’s announced a new catering program this week that provides customers with a more secure meal option for gatherings. The program offers contact-less choices for guests that include:
· Subs By The Box: Features individually wrapped and labeled subs. Each box feeds 12 people. The box includes four sub varieties, prepared the sub shop’s iconic “Mike’s Way.” (onions, lettuce, tomatoes, “the juice” and spices).
· Individual Lunch Boxes: Perfect for grab and go. Lunch boxes come with a choice of two sub sizes (regular or mini), with sub sandwiches prepared Mike’s Way. Each box includes a bag of chips and a fresh-baked cookie. A 20 oz. bottled drink can be added.
Cookie and brownie platters are also available.
“Although planned before the pandemic, our updated catering program addresses the need for individually wrapped meal options requested by so many of our customers,” said Rich Hope, Chief Marketing Officer, Jersey Mike’s Franchise Systems, Inc. “Demand right now is for catering options for small gatherings as well as for feeding essential workers.”
Jersey Mike’s also using the introduction to hint at a new contemporary design launching in outlets nationwide. The graphics on the catering boxes mirror the the new store design.
During the pandemic, franchise owners across the country have donated millions of sub sandwiches to healthcare workers, seniors, and children. Jersey Mike’s also donated more than $2 million to Feeding America and $1 million to Aaron Judge’s ALL RISE Foundation.
About Jersey Mike’s
Jersey Mike’s, a fast-casual sub sandwich franchise with more than 2,500 locations open and under development nationwide, believes that making a sub sandwich and making a difference can be one and the same. Voted America’s Favorite Sandwich Brand in Market Force Information’s 2019 QSR study, Jersey Mike’s offers A Sub Above®, serving authentic fresh sliced subs on freshly baked bread – the same recipe it started with in 1956 – and is passionate about giving back to its local communities. (Founder and CEO Peter Cancro shares company history.) For more information, please visit www.jerseymikes.com or follow us on Facebook (facebook.com/jerseymikes), Instagram (instagram.com/jerseymikes) and Twitter (twitter.com/jerseymikes).
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Sylvan Learning is offering its franchisees relief options, including fee deferral, amid the pandemic. The supplemental education franchise is also offering online learning resources for families amid coronavirus restrictions.
Sylvan announced a $2.5 million royalty and fee deferral program for pandemic affected franchisees. Amid the Coronavirus (COVID-19) pandemic, Sylvan franchisees pivoted their business delivery to be exclusively online. The company is offering the deferral to ensure franchisees focus on providing families educational support.
“It’s been a difficult time for families, in particular those with school-age children, and small business entrepreneurs. The families who rely on Sylvan for their children’s supplemental education have had their educational lives turned upside down with the closure of many schools,” said John McAuliffe , CEO of Sylvan Learning. “These families are looking for solutions that allow them to continue to learn at home and to also continue to receive the supplemental education they were receiving from Sylvan. Our franchise owners have risen to the occasion by quickly pivoting to online delivery and providing support to families and their fellow franchisees during this uncertain time.”
Technology Shifts
Sylvan has been focusing attention to technology-based learning for some time. In June 2018 , the brand launched Sylvan Nation, a free online education portal. The resource offers educational support tips, worksheets, a teacher resource section and educational videos. Students can also access workbooks online through Random House.
When many centers had to close, the vast majority of Sylvan franchisees pivoted to live, teacher-led online instruction. Sylvan offers the classes through its proprietary technology platform SylvanSync. The company has also repurposed its remaining paper-based content to be delivered online. Centers are able to offer teacher led, online small group instruction based on grade and subject to further address needs.
The pandemic also fast-tracked Sylvan’s proprietary tutoring marketplace. The program allows parents to easily schedule both in-home and online tutoring. The marketplace was piloted in Baltimore and D.C. area and will now be expanded to other parts of North America .
“The Sylvan Learning system is stronger, more nimble and more united than ever. We have ramped up our already strong training in online education, local marketing and technology for our franchise owners and expanded our reach for families and students,” said McAuliffe. “We are confident we will exit this situation as a company that has transformed itself to better serve every family’s educational needs in the most convenient way, whether they prefer in-center, in-home or online delivery.”
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