---
title: "How Profitable Can Owning a McDonald's Franchise Be?"
url: https://burnaze.com/article/3499af36-d4e2-48b7-a606-ca146e9bff7a
source: "1851 Franchise"
original_url: https://1851franchise.com/how-profitable-is-owning-a-mcdonalds-franchise-2715302
category: "Burger"
industry: "Restaurants"
segment: "Burger"
published: 2021-03-19T19:14:00.000Z
modified: 2026-11-01T02:25:50.475Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/74d810d2db3ae599dc94be3d17f363917182.jpg
---

# How Profitable Can Owning a McDonald's Franchise Be?

**TL;DR:** McDonald's franchisees pay various costs, including a 4% royalty on gross sales, affecting profitability. The degree of profitability for a given McDonald's hinges on area-specific factors like demographics, location, and operational efficiency.

*originally published in 1851 Franchise on 2021-03-19. [Read the original](https://1851franchise.com/how-profitable-is-owning-a-mcdonalds-franchise-2715302).*

## Story

A McDonald’s franchise costs between $1.3 million and $2.3 million to open, and in 2018, stores averaged $2.7 million in sales.

But before you go subtracting the initial costs from the yearly sales, consider that McDonald’s franchisees have to pay rent to the franchisor, pay their workers, pay food costs, pay for technology and marketing fees, and pay a 4% royalty on gross sales.

McDonald’s franchises typically turn a profit, something the brand’s sprawling 38,000 global locations attest to, but the degree of profitability for a given McDonald’s hinges on area-specific factors like demographics, location and operational efficiency.

Since many McDonald’s locations exist within other businesses, like a McDonald’s inside a Disney World, for example, profitability remains heavily dependent on location. In 2020 McDonald’s locations in transportation hubs or theme parks probably realized slim due to the pandemic.

Systemwide, McDonald’s reported declining profits in 2020, although 2019 and 2018 saw positive growth in profits.

Ultimately, some McDonald’s franchises are profitable and others are not, but on average the golden arches represent one of the world’s most valuable brands, one which has historically enjoyed profits for the corporate leaders and franchisees alike. However, some franchises within the system allege discrimination and slimmer-than advertised profits.

## Entities

- 1851 Franchise (publication)
- Restaurants (sector)
- McDonald's (company)
- Disney (company)
- royalty fees (topic)
- franchise profitability (topic)
- location factors (topic)
- systemwide profits (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/how-profitable-is-owning-a-mcdonalds-franchise-2715302). Summarized by Burnaze (https://burnaze.com/article/3499af36-d4e2-48b7-a606-ca146e9bff7a).