How Much Money Do McDonald's Franchise Owners Make?

Everyone knows McDonald's, whether for its crispy fries or ultra-bubbly "spicy Sprite". With over 41,000 locations worldwide, the chain is nearly in every corner of the globe. In the United States, McDonald's is the highest-earning chain restaurant, contributing billions to the economy each year. But how easy is it to own a franchise? The answer is simple — it's not.

There are numerous fees and requirements involved in owning a McDonald's franchise. While this isn't unique to McDonald's — other chains like Taco Bell and Wendy's have similar hurdles — it can still prove difficult for prospective owners. However, a single franchise generates and average of around $2.7 million a year in sales, seemingly justifying the investment, but that's a stretch when it comes to how much you're able to take home. The amount McDonald's franchise owners personally make per year varies widely, but it averages around $150,000 a year.

The take-home pay of franchise owners is relatively small in comparison to sales because of all the costs associated with running a franchise. Each month, franchise owners must pay a 4% service fee based on total sales per month. Additionally, rent, which averages around 10.7% of sales, must be covered. Oh, and don't forget the starting franchising fee of $45,000.

To start, you need a minimum of $500,000 in liquid assets and must cover 40% of startup costs with cash or non-loaned funds. Overall, new owners typically require roughly $1 million to $2.2 million to start off. Costs can vary depending on the various McDonald's store formats, from PlayPlaces for kids to McCafes featuring cafe-style drinks and baked goods. Each type impacts the investment needed for franchise ownership.

Since most McDonald's locations in the U.S. are franchised, a significant portion of the company's revenue comes from these individually owned locations. Despite the attractive sales figures, franchisees face numerous additional costs, including equipment, changes in the menu, and staffing. Each time a new item is introduced, or breakfast hours are extended, franchise owners bear the financial burden.