The McDonald’s franchise began its life as a humble roadside burger stand in California in 1948 – a far cry from today’s 39,198 fast food restaurants across 100 countries. There are currently around 1,300 McDonald’s restaurants in the UK, and the company’s goal is to reach a stage where 95% of its UK restaurants are franchises.
Today, the McDonald’s Corporation is UK’s most profitable franchise, with annual sales between £1.5 million – £4.3 million. But just what is it– and how can you get involved?
What is a McDonald’s Franchise?
McDonald’s is proud to be one of the most recognised brands globally, with over 39,000 existing restaurants in over 100 countries and serving billions of customers annually.
Rather than being owned and run by the McDonald’s head office, a McDonald’s franchise outlet is owned by an individual known as a franchisee. This process begins with the franchisee paying an initial investment fee to the franchise owner (known as the franchisor) and signing a contract for a term of five or ten years.
After paying the fee and signing the contract, the franchisee will undergo training and development. They will then begin their journey as a franchisee by opening their own branch of McDonald’s.
Once the franchisee’s business is up and running, the franchisee will pay the franchisor a monthly fee, made up of a percentage of their takings or profit. In return, they’ll receive ongoing support and training.
When the contract term ends, the successful franchisee will usually have the opportunity to renew the contract for a fee or end their franchise business, which returns to the franchisor.
How Much Can I Make From a McDonald’s Franchise?
The amount a McDonald’s franchisee can make will depend on the location of the McDonald’s outlet and how successful it is.
Still, McDonald’s franchisees can expect a Return on Investment (ROI) of 20% to 25%, with many successful McDonald’s franchisees seeing an annual cash flow of £550,000 after the first year of operation. However, opening a McDonald’s may not be so easy.
How Much Does a McDonald’s Franchise Cost?
Due to its popularity, the price of opening a McDonald’s is steep.
The cost falls between £400,000 and £800,000. Applicants must have a minimum of £150,000 in liquid assets for the initial costs and a one-off franchise fee of £ 30,000 loan.
The good news here is that McDonald’s partners with several banks and financial organisations that are incredibly receptive to offering funds to new McDonald’s franchisees. Gaining the funding you need for your new business may be more accessible than you imagine.
What Can I Expect When Applying for a McDonald’s Franchise?
The application process is intense and will take three to six months. Consider the following steps.
Form Filling
You’ll start by filling out an application form online to tell the franchisor about yourself and your previous experience.
Interview #1
If McDonald’s likes the look of your application form, you’ll be invited to attend the first interview: to determine whether you would be a good fit for the brand. This interview provides an excellent opportunity to ask questions about becoming a McDonald’s franchisee.
Restaurant Experience
If you’ve managed to impress the franchisor with your skills, experience and enthusiasm, it’s time to get hands-on in the form of a five-day restaurant experience. This will allow you to learn about all the ins and outs of running a McDonald’s restaurant and give you a chance to see if it’s right for you.
Interview #2 – During this interview, you’ll be asked about your restaurant experience and further scrutinised regarding suitability for a franchise.
Panel Interview
Having gotten this far, you’ll now be able to shine in front of an expert McDonald’s panel. This stage is a make-or-break moment in your McDonald’s franchise application.
If you pass all of the above with flying colours, you’ll be invited to pay your investment fee and sign a contract to make you a bona fide McDonald’s franchisee. You’ll then undergo intensive training before launching your McDonald’s business.
Explore Other Franchise Options
While a McDonald’s franchise business is, without a doubt, one of the more expensive ones to get started with, it’s also one of the more lucrative options. In the UK, McDonald’s serves a whopping 3.8 million customers daily.
If you’ve got what it takes to become a McDonald’s franchisee, your success is guaranteed.
However, if you’re still early in your franchise journey, it may be wise to get your feet wet with more straightforward options. Explore our website for an in-depth look at possible industries and franchises. If you’re on a micro-budget, check out our franchises for under £10,000.
We can’t all dive into McDonald’s. Take this time to increase your understanding of franchises. Our Ultimate Guide will help you get there.
