If you’re interested in starting a franchise business in the fast food sector, McDonald’s has probably come to mind. It’s got thousands of outlets across the globe and a famous menu of tasty meals. But does McDonald’s franchise, and if so, can you get in on the action?
McDonald’s is one of the biggest fast food companies in the industry, with more than 36,000 restaurants across 100 countries. Every major town and city has at least one of the food giant’s outlets, whether it’s in the form of a sit-down restaurant or drive-thru. And customers visit it day and night to get their fast food fix. McDonald’s can cater to a range of customers, from time-strapped employees grabbing breakfast on their way to work, to families enjoying a sit-down meal as a weekend treat.
The famous ‘golden arches’ is a firm favourite among many fast food fans, so it’s no wonder lots of investors are keen to put their cash into the thriving business. Let’s find out more…
Does McDonald’s franchise?
Yes! McDonald’s uses the franchise system to expand across the world. This approach has paid off enormously, as the chain has almost tripled the number of its outlets using the franchise model in the past 15 years. Read on to find out about the evolution of the McDonald’s franchise, and how you can get involved and launch your very own fast food business under its world-famous branding.
When I started the process, I liked McDonald’s. By the time I’d finished, I fell in love with the brand. – Reema Mavani, McDonald’s franchisee
History of McDonald’s
It all started in 1954, when a man called Ray Kroc stumbled upon a small burger restaurant in California. He was impressed by the way the owners used multimixers to speed up their service and boost their efficiency. Kroc took the opportunity to become their franchising agent and, in 1955, founded McDonald’s System Inc.
Six years later, he bought the rights to the McDonald’s brand with the intention of building a network of restaurants selling a uniform product. Kroc wanted customers on the west coast to be able to buy the same delicious burgers and fries as customers on the east coast.
Over time, Kroc welcomed franchisees and suppliers into the McDonald’s family, working under the motto: ‘In business for yourself, but not by yourself’. The hardworking franchise leader knew his investors should be supported with a pre-approved training scheme teaching them everything they needed to know to add value to the McDonald’s brand.
Did you know? McDonald’s has nearly tripled its number of franchise units in the last 15 years.
So, in 1961, Kroc launched a training scheme (later named Hamburger University) in Elk Grove Village, Illinois. It taught processes based on research into new cooking, freezing, storing and serving techniques done in a nearby laboratory. Since then, over 275,000 franchisees, managers and employees have graduated from the course.
McDonald’s really values its franchisees, and while it expects restaurant owners to stick to the business’s branding and operational regulations, there is room for innovation. In fact, the Filet-O-Fish, Big Mac and Egg McMuffin were all invented by franchisees.
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Starting a McDonald’s franchise unit
McDonald’s is a household name, and the franchisor is passionate about making sure they only hand over the rights to use the powerful branding to the right person. Here’s a little more about applying for a McDonald’s franchise licence:
- Becoming a McDonald’s franchisee: The fast food brand is looking for investors who want to set up a business within 45 minutes of where they live. You’ll need to apply on your own, rather than with a business partner, and be prepared to sign a 20-year franchise agreement. You should also have good communication skills, financial acumen and a customer-centric approach.
- How much you need to invest: McDonald’s is a world-famous brand, and the set-up costs reflect its position as a leading fast food outlet. The amount you’ll pay will vary depending on the type of business you launch and its location. McDonald’s says the cost of buying the franchise rights and equipment for a 10-year period was between £350,000 and £1.85 million for 80 percent of restaurants in 2018.
As a franchisee, you’re likely to pay monthly fees of between 12 and 21 percent of your net sales, plus a monthly service fee of five percent of net sales. Then, you’ll contribute 4.3 percent to the franchise’s marketing fund.
- What you’ll get for your investment: You’ll be immediately enrolled onto an extensive training course lasting at least 26 weeks. McDonald’s makes sure you’re set up with an impressive supply chain and provides a fully equipped restaurant, which you’ll be expected to maintain and refurbish when necessary. You’ll also benefit from impressive returns, as 80 percent of McDonald’s franchisees achieved sales between £1.5 and £4.3 million in 2018/19.
“McDonald’s is a fantastic brand. It really invests in its people, and it’s not only the crew and the team, it also invests absolutely in the customer. From an innovation point of view, it’s so forward thinking in terms of technology… It also has amazing links with the community and that’s something I personally feel very passionate about… it really wants to embed the business and the people in its local areas.” – Sarah Lloyd, McDonald’s franchisee
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Find out more
If you’re interested in joining this iconic brand and launching your very own McDonald’s franchise unit, you can find out more about its investment opportunity on its website.
Here at Point Franchise, we also have a wide variety of other food franchises currently looking for new investors. Click on the links to browse our fast food opportunities or restaurant and café franchises. You’ll be able to sort the list by investment cost and popularity.
Or, if you’ve got a sizeable budget and want to invest in a household name, take a look at some of the biggest franchises out there.
Alice Tuffery, Point Franchise ©