Established in California in 1948, McDonald’s has grown to be one of the biggest burger chains in the world. Starting from that very first burger place in California over 80 years ago, McDonald’s has since exploded to become the much-loved highstreet fast food chain that it is today. It’s thanks to American businessman Ray Kroc that brought Richard and Maurice Mcdonald’s concept to the billions of people that visit the golden arches every year. It was a franchise that Ray Kroc bought from the “McDonald’s Brothers” all them years ago, but are McDonald’s still selling franchises?
Is McDonald’s a Franchise?
Yes! Ray Kroc was the first McDonald’s franchisee, and McDonald’s are still franchising to this day. McDonald’s is one of the world’s biggest fast food restaurant chains with over 40,000 restaurants globally. Around 1,400 of those restaurants are here in the UK!
Rather than being owned and run by the head office, McDonald’s are actively selling franchises to investors looking to open up a golden arches restaurant in their own area. This means, anyone who can afford the investment can make their dream of owning a McDonald’s restaurant a reality. If you’re not sure what franchising is, franchising is where the owner of a brand (franchisor) sells the rights to trade as their brand to an investor, to run the business in their own area – the franchisee. Through a fixed but renewable franchise agreement term – usually five years – franchisees can enjoy the luxury of owning a part of the best-known fast-food brand.
How to Open a McDonald’s?
To become a McDonald’s franchisee, you need to raise the required franchise investment. The cost to set up and run a McDonald’s franchise can be anywhere from a few hundred thousand up to two million pounds. Obviously, the cost will vary depending on the size of the venue, but up to 75% of the franchise cost can be funded by a bank. McDonald’s has relationships with a number of banks who of which can offer competitive rates.
You’ll need premises or land to open a McDonald’s franchise, and when you take into consideration the cost of construction and fitting, it can be easy to see how the numbers add up.
There are two ways of opening a McDonald’s franchise. You can either open a new venue, or you can purchase the business from an existing franchisee – known as a franchise resale. Franchise resales will generally cost more than a new build, because they already have an established presence within the area and developing that presence and reputation comes at a cost.
Steps to Opening a McDonald’s Franchise
As with any franchise, the process involved can be intense and you need solid personal and financial commitment to ensure the business a success. There are several steps involved with buying a McDonald’s franchise:
Learn whether franchising is right for you
Can you personally commit the time to set up and run a McDonald’s franchise? There will be a lot of personal commitment required. From recruiting staff to marketing the business and building the business up. Can you afford to put in the time and effort?
Get in touch with the Franchisor
You’ll need to tell McDonald’s that you’re interested in joining their franchise network. Complete the necessary forms on their website and tell them a bit about yourself.
Meet the Franchisor
If McDonald’s think you may be the right fit for their franchise network, they’ll invite you to a franchise discovery day or franchise interview. It will be a chance for both you and McDonald’s to ask questions and come to terms with what each other’s expectations are.
Interviews
There will be a number of interviews with the McDonald’s team to verify the suitability of a franchise. This will often involve some hands-on experience in an existing franchise outlet.
If you manage to please the McDonald’s board and both parties feel you’re the right fit, you’ll be invited to sign on as a franchisee and pay the franchise fee. Support will be provided to you with regards to site selection and marketing throughout the franchise journey.
McDonald’s Franchise Earning Potential
According to the McDonald’s website, typical annual sales of 80% of their franchise network was between £1.5bn – £4.3bn. Most McDonald’s franchisees see a ROI of between 20-25%, enjoying an annual cashflow of £550,000 after their first year of trading. It goes without saying that the actual earnings per franchisee will vary depending on the location and operating hours. Fast food franchises are up there as one of the most profitable types of franchises.
In Conclusion
Can you see yourself being a part of a global restaurant chain that serves over 3 million customers a day? Although McDonald’s is one of the most expensive food franchises, it is one of the most lucrative too. McDonald’s is franchising – if you’ve got what it takes to be a franchisee and you can afford the financial and personal investment required, your success is pretty much guaranteed.