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QSRRevenue OnlyItem 19: ✓ DisclosedHigh Confidence · 100/100FDD data: 2026 · Fresh

McDonald's Franchise Cost and Profit

FDD-based startup cost, franchise fee, revenue, profit, SBA default rate, and investment risk signals for McDonald's using its latest 2026 FDD coverage.

Based on 2026 FDD · 8 filings in corpus · Latest FDD: 2026

FranchiseIQ Score
84
A
Low Risk
Composite score from 3 risk dimensions. Click for breakdown ↓
Health Score
B
74/100
7/7 metrics · High confidence
Full analysis unlocks:
✓ Cash-on-Cash return
✓ Payback period
✓ SBA default rate
✓ Red flags assessment
✓ Comparable franchises
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Cost and profit at a glance

How much does a McDonald's franchise cost and make?

Based on FDDIQ's FDD corpus, a McDonald's franchise shows an estimated initial investment of $1.5M – $2.7M. Reported owner economics show $154K. Use the links below to compare the cost, revenue, SBA loan history, and ROI against other franchises before you request the full FDD.

Startup Cost
$1.5M – $2.7M
Total initial investment
Profit / Revenue
$154K
FDD Item 19 signal
Payback Signal
13.7 years
Modeled return metric
SBA Default Rate
0.0%
Loan repayment history
Compare franchise costs →Estimate franchise ROI →Check SBA default rates →Browse QSR franchises →Compare similar franchises →

Quick fee read: $45K franchise fee · 9% royalty/ad burden. These figures are directional screening data, not a substitute for reading the current FDD and speaking with existing operators.

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The unlocked report ties this brand's FDD disclosures to SBA outcomes, Item 20 movement, fee load, missing-data labels, and buyer assumptions — so you can decide whether this is worth deeper diligence.

FDD disclosure qualitySBA default outcomesItem 20 unit movementFee/cost stressComparable brands
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McDonald's Franchise Analysis

McDonald's requires a total initial investment of $1.5M to $2.7M (midpoint approximately $2.1M), with an initial franchise fee of $45K. The ongoing fee burden is 9% (5% royalty plus 4% advertising fund). This is below the industry average of approximately 14.2%, leaving more margin for the operator.

According to Item 19 of the 2026 FDD, the median revenue for McDonald's locations is $3.8M. The implied franchisee EBITDA is approximately $154K, based on the margin assumptions disclosed in the FDD. The estimated cash-on-cash return is 7.3% with a payback period of approximately 13.7 years.

McDonald's operates approximately 12,772 franchised units. Unit count is relatively stable with a 0.8% year-over-year change. The SBA 7(a) loan default rate of 0.0% is well below the industry average of approximately 9.4%, indicating strong franchisee financial outcomes.

Prospective franchisees should verify all figures against the most recent FDD, conduct validation calls with multiple existing franchisees, and consult with a franchise attorney before signing any agreement.

Analysis based on 2026 FDD filing. FDDIQ Editorial Team · Methodology

Total Investment Range$1.5M – $2.7M
MinMid: $2.1MMax

Key Metrics

Franchise Fee
$45K
Royalty Rate
5%
Ad Fund Rate
4%
Total Burden
9.0%
Royalty + ad fund
Units (2023)
12,772
+102 vs prior yr
Net Unit Growth
→ 0.8%
Year over year
June 2026 strategy update

McDonald's > NEXT: A four-pillar overhaul reaching 13,500+ U.S. franchise units

Unveiled June 1, 2026, at the biennial Worldwide Convention in Las Vegas, "McDonald's > NEXT" replaces "Accelerating the Arches" (2020) as the company's global growth strategy. CEO Chris Kempczinski framed it as a response to specialists like 7 Brew, Dave's Hot Chicken, and Raising Cane's redefining consumer expectations across chicken, beef, and beverages. Financial targets are expected at a dedicated investor day in September 2026.

Pillar 1 — Menu
Elevate taste & quality
Hand-breaded chicken strips (in test, Chicago markets), upgraded McCrispy line, beverage innovation (dirty sodas, Refreshers, energy drinks H2 2026), half-pound Big Arch burger.
Pillar 2 — Consumer
Co-create with fans
Influencer marketing push, social media brand engagement, viral cultural moments (Grimace shake, Minecraft collab as templates), tighter pricing consistency across locations.
Pillar 3 — Restaurant
Tech & design upgrade
ArchIQ AI-based restaurant operating system; ARCHY voice-activated drive-thru AI (testing at 5 locations with Google, rollout target 2027); new restaurant prototype for upcoming remodels.
Pillar 4 — People
Redefine hospitality
Crew training for warmer in-store customer service, counterbalancing automation-driven interaction loss. Goal: make every visit feel personal despite self-service kiosks and AI ordering.
Buyer diligence implications
  • Capex burden: Hand-breaded chicken requires new prep stations and fryer capacity; the new prototype design triggers remodel costs for units approaching renovation cycles. Historical precedent: remodel mandates have already pushed some legacy operators to sell.
  • Tech adoption timeline: ArchIQ/ARCHY are in early test (5 locations). Full rollout by 2027 means franchisees should expect phased technology investment over 12–18 months.
  • Competitive pressure: Strategy explicitly targets 7 Brew, Dave's Hot Chicken, Raising Cane's — specialists winning on single-category quality. McDonald's must prove it can match them across all four pillars simultaneously.
  • Resale screen: Any McDonald's acquisition or development deal should underwrite remodel timing, kitchen equipment compatibility, technology adoption cost, and whether the unit's sales density justifies the incoming capex cycle. September 2026 investor day will clarify financial targets.

Sources: McDonald's corporate NEXT announcement (June 1, 2026), CNBC, Restaurant Business Online, Quartz. This section will be updated after the September 2026 investor day when financial targets are disclosed.

Cash-on-Cash Return
7.3%
Annual estimated return
Payback Period
13.7 yrs
Break-even timeline
SBA Default Rate
0.0%
vs ~7.2% industry avg
Median Revenue
$3.8M
Item 19 disclosed
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CoC ReturnPayback PeriodSBA Default RateMedian RevenueEbitda MarginRisk Score
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Estimated using sector-average margins. Actual franchise economics vary by location, operator, and market conditions.

McDonald's vs. QSR Average

MetricMcDonald'sQSR Avg
SBA Default Rate0.0%▲9.4%
Cash-on-Cash Return7.3%▼14.2%
Total Investment$2.1M$380K

Industry averages based on FranchiseIQ corpus benchmarks. ▲ = better than avg, ▼ = worse.

SBA Loan Performance

Real lending data from SBA 7(a) loans (2010-2010). 1 loans across 1 states.

Default Rate
0.0%
Low Risk
Total SBA Loans
1
1 states
Total Loan Volume
$80K
SBA 7(a) approved
Avg Loan Size
$80K
Per franchisee
Loan Status Breakdown
1
Paid in Full (100%)
0
Currently Active
0
Charged Off
$0
Total Charged Off ($)
● Paid● Active● Charged Off

Source: SBA 7(a) loan data via FOIA. Default rate = charged-off loans / total originated. Industry avg default rate ~7.2%.

Compare

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$427K – $2.3M
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Questions to Ask Before You Sign

5 data-driven questions every McDonald's franchise buyer should ask.

  1. 1.What is McDonald's's SBA default rate compared to its competitors?Learn more →
  2. 2.Does McDonald's disclose Item 19 financial performance representations?Learn more →
  3. 3.What is the net unit growth trend over the past 3 years?Learn more →
  4. 4.What is the franchisee termination and transfer rate per Item 20?Learn more →
  5. 5.What do the FDD litigation disclosures (Item 3) reveal about franchisor legal history?Learn more →
Generate attorney questions for McDonald's →Validation call guide →
Data sourced from publicly filed Franchise Disclosure Documents (FDDs) submitted to state franchise regulators. SBA loan data from public SBA 7(a) records. Information reflects the most recent FDD filing in our database and may not reflect current terms. Always verify with the franchisor's current FDD before making any investment decision. Not legal or financial advice.

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