Typical* Annual Sales £2.0 million - £5.8 million
From January to December 2023, 80% of all McDonald’s UK franchised restaurants had sales between £2.0m and 5.8m.
To invest in a McDonald’s Franchise, the minimum financial requirement is 25% of the total investment in unencumbered funds.
The remaining 75% investment can be funded by a bank and Franchisees may wish to use banks with which McDonald’s has a relationship since these provide very competitive rates.
Those interested in becoming a Franchisee will need to invest circa. £150k in unencumbered funds
Of restaurants franchised in 2023, the cost of purchasing the franchise rights and equipment was between £500k and £1.85 million*. This was valued on profitability over a ten year period using a projected future cash flow.
The opportunity to own and operate a McDonald’s restaurant may come from a direct purchase from McDonald's or via one of our existing Franchisees.
*Typical payment needed to obtain the right to purchase the franchise rights and equipment for a first restaurant. In certain circumstances, McDonald’s may be able to offer alternative financial arrangements.
Typical Rent, Advertising and Royalty
The monthly rent payable by 80% of restaurants franchised between January 2023 and December 2023 ranged between 8% and 18% of that restaurant’s net sales. Typically, this rent is fixed for 20 years on the initial term. Rent is calculated over a ten year period factoring in projected sales and profitability.
There is an additional monthly royalty of 5% of the net sales for the use of the McDonald's system as well as a contribution to the marketing fund which is currently set at 4.3% of net sales.
Typical Annual Cash Flow after first year: £120k-£400k
Cash flow is the money left in your business before you have taken a personal draw, and paid any loans or tax payments that may be outstanding.
Typical return on investment (ROI) over 20 Years 20%-25%
ROI is modelled such that a Franchisee may have the potential to generate 20% - 25%* annually, over their term. Note that this doesn't take account of any future investments you will make into your business during the 20-year term.
*The ROI range may vary based on future business performance and how individual restaurants are operated.
Banking Support
McDonald’s has long-standing relationships with well-established banks, who can offer competitive rates and support to Franchisees.
