TL;DR
Arcos Dorados, the largest global McDonald's franchisee, is renewing its Master Franchise Agreement with McDonald's for 20 years. The new agreement will be effective January 1, 2025, and includes a royalty structure and a 20-year renewal option starting in 2045.
Arcos Dorados Holdings announced that it is renewing its Master Franchise Agreement (MFA) with McDonald’s.
With headquarters in Montevideo, Uruguay, Arcos Dorados is not only the largest restaurant chain in Latin America, but also the largest global independent McDonald’s franchisee. The company operates nearly 2,400 restaurants in Latin America and the Caribbean.
The company says it plans to renew its agreement after receiving a renewal notice from McDonald’s on Aug. 1. The new agreement is for 20 years and replaces the existing MFA. Financial terms of the agreement were not disclosed by either company.
According to Arcos Dorados, they are working with McDonald’s on finalizing the new MFA, which will be effective Jan. 1, 2025.
Once finalized, the new agreement will include another 20-year renewal option that will start on Jan.1, 2045.
The new agreement is expected to include a royalty of Gross Sales of 6.0% for the first ten years, 6.25% for the subsequent five years and 6.5% for the final five years.
Looking ahead, Arcos Dorados said that it expects to open approximately 90 to 100 restaurants in 2025.
In this story
This story was originally published by Andrew Carlo in Franchise Magazine USA on October 4, 2024. Burnaze summarizes and links to the original reporting.
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