McDonald's Franchise Review - The Facts

McDonald's Franchise Review - The Facts

McDonald's Franchise Review - The Facts

Owning a McDonald's franchise can be one of the best business decisions that you make if you have the right stuff to succeed with this business. In fact, if done right, it can be one of the most rewarding experiences you'll ever have. But before you go out there and start serving your share of billions of hamburgers, there's certain things you must know about owning a McDonald's franchise.

Today, there are roughly over 30,000 restaurants spanning the globe in over 100 countries. McDonald's franchise has been in existence since 1955 and the franchise owners have played huge roles in the overall success of the company.

There are basically 2 scenarios to choose from in you are considering to buy a McDonald's franchise. The first is to purchase an existing restaurant from the company or another franchise owner, which happens to be the most common practice. The other scenario is to purchase a restaurant that is brand new and built from the ground up. Either way, you must have a minimum of $300,000 down payment that can NOT be borrowed. That's just the down payment.

Other important factors in buying a McDonald's franchise include having significant business experience, good management skills, the ability to manage finances well, you must be able to execute and deliver on a business plan, you have to maintain exceptional customer service and you have to have a good credit history. If you can't show you have all of these capabilities, then this franchise may not be a good fit for you.

It is widely agreed upon by most experts that if you can break even in the first 7-10 years then you're doing a great job running your McDonald's franchise. Part of the ongoing expenses include royalties of roughly 4% of gross monthly sales and the traditional business costs including rent, utilities, inventory, etc. What's not well known is that the McDonald's corporation usually owns the land and you pay your rent to the corporation. As a matter of fact, McDonald's corporation is one of the largest holders of real estate in the world. If you think about it, they are really in the real estate business and not the hamburger business.

Bottom line is buying a McDonald's franchise is not for the weak of heart. You have to have considerable net worth, a good track record and still get approval by the company. Not all franchises operate in this manner and if owning a McDonald's franchise is not a good fit for you, there's plenty of other options available.

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