---
title: "Why is McDonald's Considered a Real Estate Company?"
url: https://burnaze.com/article/476ab193-4f10-4546-93a4-01fac442bccf
source: "1851 Franchise"
original_url: https://1851franchise.com/why-is-mcdonalds-considered-a-real-estate-company-2715077
category: "Real estate"
industry: "Business Services"
segment: "Real estate"
published: 2021-02-23T21:16:36.000Z
modified: 2026-11-01T02:25:17.288Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/e27e06f42173b7ad234f3f34cf93d8814243.jpg
---

# Why is McDonald's Considered a Real Estate Company?

**TL;DR:** McDonald's is considered a real estate company due to its ownership of the land on which its stores are built, with 85% of its stores owned by franchisees. The company makes a significant portion of its revenue from rent paid on its real estate, including leases on nearly 33,000 franchisee-owned restaurants.

*originally published in 1851 Franchise on 2021-02-23. [Read the original](https://1851franchise.com/why-is-mcdonalds-considered-a-real-estate-company-2715077).*

## Story

Consumers think of McDonald’s as a burger restaurant, but in the business world, McDonald’s is considered a real estate company.

While the brand has sold more than one billion hamburgers to customers around the world, 85% of its stores are owned by franchisees. Franchisees pay to use McDonald’s brand name, its proprietary processes and trademarked menu items, but unlike other franchises, McDonald’s owns the land the stores are built on.

Between the burgers and the land, McDonald’s makes a lot more of its money on the land.

McDonald’s owns thousands of iconic pieces of real estate around the globe. From New York City’s Times Square to Moscow’s Red Square, McDonald’s has ventured around the world, buying up prime real estate. Franchisees pay McDonald’s a cut of their food sales, but a much larger portion of McDonald’s revenue comes from the rent it’s paid on its real estate. After all, rent in Times Square isn’t cheap, but a Big Mac is.

McDonald’s still takes a royalty on its franchisee’s sales but enjoys a much fatter revenue stream from the leases on nearly 33,000 franchisee-owned restaurants.

“The Founder,” a 2016 film about McDonald’s history explains the dynamic succinctly: “You don’t build an empire off a 1.4% cut of a 15 cent hamburger, you build it by owning the land on which that burger is cooked.”

## Entities

- 1851 Franchise (publication)
- Business Services (sector)
- McDonald's (company)
- franchise model (topic)
- revenue streams (topic)
- real estate ownership (topic)

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Originally reported by 1851 Franchise (https://1851franchise.com/why-is-mcdonalds-considered-a-real-estate-company-2715077). Summarized by Burnaze (https://burnaze.com/article/476ab193-4f10-4546-93a4-01fac442bccf).