TL;DR
McDonald's makes money through real estate by buying and selling properties and collecting rent from franchisees. The company owns the land on which its stores are built and has nearly 40,000 units around the world, with 85% being franchisee-owned and operated.
McDonald’s success is built on layers of several ideas, but where the consumer world sees a fast-food burger chain, the business world sees a real estate company.
The brand owns all of the land on which its stores are built, so the franchisees who open up their own units of McDonald’s locations are not only paying franchise royalties to the company, they’re also paying it rent.
According to Wall Street Survivor, McDonald’s uses two methods to make its money on real estate: buying and selling hot properties and collecting rent on franchised units. McDonald’s has nearly 40,000 units around the world, 85% of which are franchisee-owned and operated, and sees much of its revenue come from that rather than its more budget-friendly menu options.
In this story
This story was originally published in 1851 Franchise on December 21, 2021. Burnaze summarizes and links to the original reporting.
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