Mcdonalds Franchise Cost: What You Need to Know

Are you interested in opening a McDonald’s franchise? It’s not as easy as you think. You have to comply with their requirements, invest a lot of your time, and also ensure you have enough money to cover the Mcdonaldsfranchise cost, among other things. However, if you do get a franchise from this very popular fast-food restaurant company, it can be a financially rewarding endeavor.

McDonald’s Franchise Facts You Should Know

The company has been into franchising since the 1950s and it’s in fact one of the main reasons they are very successful. It’s how they do business and being the leading foodservice retailer in the world, you should certainly take this opportunity. They have over 30,000 restaurants in at least 100 countries worldwide.

Most entrepreneurs thinking of purchasing a McDonald’s franchise buy an existing restaurant, either from the company or from a McDonald’s franchisee. There are still some however that purchase a new McDonald’s restaurant.

Financial Requirements and Costs

In terms of costs, you will need to pay an initial down payment which is 40% of the cost if you opt for a new McDonald’s restaurant. For existing restaurants, the down payment is 25%. Your down payment must come from your own money (non-borrowed) in the form of cash, securities, debentures, bonds, vested profit sharing, business equity, and real estate equity (excluding your home).

Because the total cost can vary then that means the down payment varies as well. But in general, the initial McDonalds franchise cost is at least $300,000. There are also ongoing fees you need to pay. If you have additional funds, you can even apply for multi restaurant opportunities.

Other Requirements

Aside from the costs, you would also need to meet the following requirements imposed by McDonald’s:

• Business experience: You should demonstrate successful management or ownership of business units or departments.

• Growth: You should prove that you have the capability to grow with the company.

• Business plan: You need to show capability to develop as well as execute a sound business plan.

• Financial management:  McDonald’s require franchisees to have the ability to manage finances and are familiar with business financial statements.

• Management skills:  You should be fully committed to manage the daily operations of the restaurant personally.

• Training: You will need to undergo world class training so that you can be knowledgeable in all aspects of running a McDonald’s restaurant.

• Credit history: McDonald’s is very picky and will require applicants to have a good credit history before their application is approved.

• Customer service: You must show that you have the ability to manage, train and recruit the right people and deliver exceptional service.

As you can see, a McDonald’s franchise is not actually a small scale business. If you’re a startup with limited capital, you may want to take a look at small scale business ideas or read up on small mergers & acquisitions to find excellent business opportunities.

The Most Profitable Franchises in the US

There are a lot of budding entrepreneurs who want to start their own business but they realize that creating a brand from scratch may be very expensive and time consuming.  This is why franchising has become an increasingly popular option. In fact, franchising has been around for 30 years but it wasn’t until the turn of the 21^st century that it really took off. If you’re interested in this kind of business venture, take a look at the most profitable franchises in the US for 2014 based on a study made by Entrepreneur.com.

Based on the data gathered by the site, Anytime Fitness emerged as the top choice for 2014, being the fastest growing franchise in the world in its industry. This company which specializes in fitness clubs started in 2002 and now has over 2,000 locations in the United States as well as overseas. Right now, Anytime Fitness has co-ed facilities that are open 24 hours a day. If you’re interested in opening a franchise, the cost starts at $56,000+ and can be operated full time or part time even from home.

Here’s the list of the most profitable franchises:

10. Dunkin’ Donuts

Costs: $294K – 1.51 million

9. Pizza Hut

Costs: $297K – 2. 1 million

8. Denny’s Inc.

Costs: $1. 17 million – 2.4 million

7. Servpro

Costs: $134.8K – $183.44K

6. 7-Eleven

Costs: $30.79K – $1.63 million

5. Jimmy John’s Gourmet Sandwiches

Costs: $300.5K – 489.5K

4. Supercuts

Costs: $103.55K – 196.5

3. Subway

Costs: $85.69K – 262.85K

2. Hampton Hotels

Costs: $3.7 – 13.52 million

1. Anytime Fitness

Costs: $56.29K – $353.89K

Fastfood Restaurant Franchises

If you’re more interested in opening a fast food restaurant franchise, you may want to start with Subway.  It’s fairly affordable after all. The Subway franchise cost includes a one-time fee of $15,000  although you will need to have a minimum of $100K to cover other essentials such as a location, equipment, hiring employees, marketing, etc. Although the franchise fee is one-time, you will also be required to pay 8% of your weekly gross sales as royalties and an advertising fee of 4.5% of your weekly gross sales.

Another great franchise option is Krispy Kreme. This doughnut company has been around for awhile now, with over 249 stores in the US and they also have store locations all over the world. About half of the stores are owned by the company but it is possible to get a Krispy Kreme franchise although ownership is quite complicated. You would first need to complete their application on their website. They’ll want to know your financial info and when you want to purchase a franchise. You will also need to explain why you think you are a good candidate to open a franchise.