Data Verification Status: Verified
Data for McDonald's was extracted directly from the 2025 Franchise Disclosure Document filed with state regulators (MN CARDS, WI DFI, or CA DFPI). The actual FDD was directly reviewed and all figures shown are sourced from the government filing. Full production extraction from 389-page 2025 FDD filed with WI DFI (file #638437). 120+ canonical fields, 15 tables, 20 exhibits, 30+ contract burden clauses extracted. Regression-checked against 1,215-field gold corpus. Always verify current figures by requesting the most recent FDD directly from the franchisor.
McDonald's
World's largest QSR system — 2025 WI DFI FDD (file #638437)
McDonald's USA, LLC is the world's largest quick-service restaurant franchisor. 13,559 U.S. outlets (95% franchised to independent operators, 5% company-owned McOpCo). McDonald's controls site selection, owns or leases all real estate, constructs each restaurant, then subleases the completed unit to the franchisee. Five franchise formats: Traditional (20-year term), Satellite, STO, STR, and BFL. Royalty is 4% for legacy franchisees or 5% for new franchisees from Jan 2024. Rent adds 6–23% of Gross Sales on top. Average traditional franchised restaurant revenue: $3,966,000 (median $3,797,000). No contractual renewal right — new terms at McDonald's sole discretion. Audited by Ernst & Young LLP: $10.63B total revenue, $3.46B net income (2024). FDD issued May 1, 2025, amended February 1, 2026.
Key Metrics
Total Investment
$1,471,000 – $2,728,000
Initial fee: $45,000
Avg Revenue (Item 19)
$4,002,000
Gross revenue, 2025 FDD
Royalty Rate
4% or 5%
2025 FDD
Total Units
13,559
12,887 franchised · 672 company
Franchise Overview
| Parent Company | McDonald's Corporation |
| Year Founded | 1955 |
| Franchising Since | 1955 |
| Headquarters | IL |
| Category | Food & Beverage· quick-service burger |
| States of Operation | 51 |
| FDD Year | 2025 |
Money: What You Pay, What You Make
Investment costs, ongoing fees, and disclosed revenue — FDD Items 5, 6, 7, and 19
Investment Anatomy
Where your initial investment goes — sourced from FDD Item 7.
Where Every Revenue Dollar Goes
Approximate allocation of each dollar of gross sales — from FDD Items 6, 8, and 19. Not a profit projection.
Diligence Scores
Computed from government-filed FDD data. Each score is 0–100. Methodology is public and citation-backed.
System Health
Based on Item 20 outlet trends
Franchisor Strength
Based on Item 21 financials + Items 3-4
Contract Burden
Based on Item 17 terms + Item 12 territory
Economics
Based on Item 19 + fee burden
Confidence
Data completeness + extraction quality
Composite Grade
Economics + Diligence + Confidence
Scores are editorial calculations from cited government filings (2025 FDD). They are not investment advice. Missing economics data does not indicate poor economics — it means Item 19 revenue data is unavailable for scoring. See methodology for details.
Data Coverage
Gov-filed FDD · 2025
11/11
items populated
Item 19 — Financial Performance Representation
| Disclosed metric: Reported Gross Sales— Profit not disclosed | |
| Average Gross Sales | $4,002,000 |
| Median Gross Sales | $3,838,000 |
| Units Included | 12,572 |
| Basis | subset |
| Time Period | Calendar Year 2024 |
= $4,002,000 avg revenue minus 8.0% disclosed fees (royalty 4% or 5% + ad fund 4%). Excludes labor, COGS, rent, debt service, taxes, and all other operating expenses. This is not profit.
Item 19 Data Quality
Before comparing this revenue figure to other brands, review these data-quality flags.
Gross sales
Figure represents gross sales — standard basis for cross-brand comparison.
Partial expenses disclosed
Some operating expenses are disclosed but not a complete P&L. Profit figures should be interpreted with caution.
Subset of units reported
Item 19 samples may be limited to defined subsets (subset meeting stated criteria), which affects comparability.
Strong sample (12572 of 13559 units)
93% of eligible units included — highly representative.
Data from 2024
Revenue covers 2024 — 2 years old. Reasonably current but worth confirming recent trends with existing franchisees.
Average and median close
Average ($4,002,000) and median ($3,838,000) are within 15% — reasonably even distribution.
Fee Structure
| Initial Franchise Fee | $45,000 |
| Total Investment Range | $1,471,000 – $2,728,000 |
| Royalty | 4% or 5% |
| Marketing / Ad Fund | 4% |
| Technology Fee | $11,379/mo |
| Other Ongoing Fees |
|
Operations: The Rules You Live By
Contract terms, territory, suppliers, training, and financing — FDD Items 8, 10, 11, 12, 17
Supplier Dependency — Item 8
Restrictions on where you must buy products and whether the franchisor profits from those arrangements.
Franchisor Receives Supplier Revenue
The franchisor or an affiliate receives rebates, commissions, or other compensation from required suppliers. This is a hidden cost — the effective price you pay for supplies is inflated above market rate.
“McDonald's + predecessor received $39M in loan guarantee fees, cashless incentives, and beverage rebates (2024). Revenue from franchisee real estate/services: $7.21B (68% of total revenue). 90–95% of establishment purchases and 55–65% of ongoing purchases must come from approved sources.”
| Required Purchases | Yes — restricted |
| Approved Supplier List | Yes |
| Alternative Supplier Allowed | Yes (with approval) |
| Supplier Lock-in Score | 9/10High restriction |
Mandatory purchase categories: food ingredients, packaging, equipment, technology, insurance
Franchisor Financing — Item 10
Financing offered or facilitated by the franchisor — including direct loans, third-party referrals, and key risk clauses.
Third-Party Referrals Only
Franchisor refers to SBA lenders or banks — no direct financing offered.
Source: FDD Item 10 (government-filed disclosure document).Extraction confidence: high.
Territory & Encroachment Risk — Item 12
Critical Encroachment Risk
NO exclusive territory — encroachment risk exists; franchisor may operate competing channels in your market; franchisor reserves online/ecommerce sales; no defined territory type.
✗ No
Exclusive Terr.
△ Yes
Franchisor Competes
△ Yes
Online Reserved
none
territory type
Source: FDD Item 12 (Territory) · Encroachment risk score is editorial analysis based on disclosed terms
Supplier Dependence — Item 8
Required purchases, approved suppliers & lock-in analysis
Critical Supplier Dependence
Alternative suppliers may be approved with permission; mandatory purchases required from approved sources; defined approved supplier list exists; franchisor or affiliate receives revenue from supplier arrangements; mandatory categories: food_ingredients, packaging, equipment….
Source: FDD Item 8 (Restrictions on Sources of Products and Services) · Lock-in score is editorial analysis
Management Quality — Item 2 (Business Experience)
Strong Management Signal
Leadership has prior franchise system experience; long-tenured executives (5+ years); recent leadership changes detected; 37 senior roles identified.
37
Senior Execs
✓ Yes
Franchise Exp.
✓ Yes
Stable Leadership
△ Yes
Recent Changes
Source: FDD Item 2 (Business Experience) · Extraction confidence: high
Franchisor Support — Item 11
Training program, field support & ongoing resources
Strong Franchisor Support
600h comprehensive training program; 536h hands-on OJT plus 64h classroom; annual franchisee conference; ongoing training program; field support team; technology/POS system provided.
Source: FDD Item 11
Contract Terms at a Glance
Key franchise agreement provisions — from FDD Item 17. These define your legal relationship.
System Health: Is It Growing or Shrinking?
Unit openings, closures, transfers, and geographic spread — FDD Item 20
Unit Economics — Item 20 (Outlets & Franchisee Information)
Units Opened
+181
Units Closed
-32
Units Transferred
843
| Net Growth | +102 units |
| Turnover Rate | 3.4% |
System Composition
Ownership split and 3-year system trajectory — from FDD Item 20.
3-Year System Trajectory
Outlet Churn Anatomy — Item 20
Exit-type breakdown for the 2025 FDD reporting period. Source: government-filed FDD.
distressed System
Warning: 85% of exits were franchisor-forced (terminations + non-renewals). This is a high-stress signal.
Opened
+181
Exited
-52
Net
+102
| Exit Type | Count | % |
|---|---|---|
Terminations (forced by franchisor) Franchisor forced closure. Can indicate unit non-performance or relationship breakdown. | 29 | 56% |
Non-renewals (not offered renewal) Franchisor declined to renew. Similar signal to termination — unit was not retained. | 15 | 29% |
Reacquisitions (franchisor bought back) Franchisor bought the unit. May indicate strategic consolidation or failing unit rescue. | 8 | 15% |
Transfers (franchisee-to-franchisee) Units changed hands but remained in the system. High transfers can indicate a healthy resale market. | 843 | — |
85% of exits were franchisor-forced (terminations + non-renewals). Industry benchmark: under 20% is normal.
Franchisor Strength: Can They Support You?
Financial health, litigation history, and audited statements — FDD Items 3, 4, 21
Litigation Summary — Item 3
Active Lawsuits
7
Trend
Lawsuit Types
7 named pending cases: Deslandes (no-poach class action, survived Supreme Court cert denial), Turner (no-poach), Crawford (racial discrimination by 77 former Black franchisees), Kytch (ice cream machine), Michell (Hispanic franchisee discrimination), Williams (E. coli Quarter Pounder class action), Le (McRib deceptive marketing). Notable settlements: Washington $33.5M, Lentini $22M, Tavarua $15.6M, AA&S $15.8M. Also numerous labor/joint-employer lawsuits.
Franchisor Financial Strength — Item 21
Extracted from audited financial statements filed with the FDD.
Auditor
Ernst & Young LLP
✓ Unqualified (clean) opinion
Financial Strength
strong
Derived from audited balance sheet
| Franchisor Financials (most recent audited year) | |
|---|---|
| Revenue | $10,630,800,000 |
| Total Assets | $22,195,300,000 |
| Total Liabilities | $11,973,300,000 |
| Equity | $10,222,000,000 |
| Net Income | $3,461,600,000 |
| Cash & Equivalents | $34,600,000 |
Franchisor P&L Snapshot
Visual summary of the franchisor's audited financials — from FDD Item 21 / Exhibit A.
Peer Benchmarks
Ranked within food-beverage franchises at a over $500K investment tier. All data from government-filed FDDs.
McDonald's ranks in the top 25% of peers for royalty rate
Percentile rank vs. comparable franchises in the same category and investment tier. For revenue and growth: higher percentile = better. For fees and investment: lower percentile = better (bar shows relative advantage).
Filing Year Changes
Year-over-year comparison across multiple FDD filings. Source: government-filed disclosures.
Avg Revenue — Item 19 (Year-over-Year)
2024 FDD
$3966K
2025 FDD
$4002K
+0.9%
year-over-year
Net Unit Growth — Item 20 (Multi-Year)
Green = system grew · Red = system shrank · Each bar = one filing year
Most recent
+102
net units 2024
Trends & Change Signals
Multi-factor trend detection across revenue, unit count, financials, and litigation. Includes year-over-year comparison.
Overall Trend: improving
Multiple improving signals. Positive trajectory across revenue and/or unit count.
Average Revenue (Item 19)
+1% year-over-year
$4,002,000 (2025 FDD)
vs. $3,966,000 (2024 FDD)
Unit Growth Trajectory
Growth improved by 100 units
Net +102 units (2024)
vs. Net +2 units (2023)
Unit Turnover Rate
Below average — healthy retention
3.4% annual turnover
Buyer Prep: What to Watch For
Key risk areas, questions for existing franchisees, and community insights
Key Risk Areas
6 from FDDMcDonald's may develop competing outlets at any time. Internal development policies are explicitly NOT part of the Franchise Agreement and create no contract rights.
Franchisee has no right to renew or extend. The New Term Policy (Exhibit K) is discretionary and may change at McDonald's sole discretion. If no new term is offered, franchisee must sell or exit.
Default on Bank of America guaranteed loan is a default under the Franchise Agreement. Operator Assistance Program Agreement requires waiver of all claims against McDonald's.
Pro forma statements use 4% royalty (legacy rate). New franchisees from Jan 2024 pay 5%. This reduces the disclosed OIBOC by ~$30K–$34K at the stated sales levels.
No contractual limitations on frequency or cost of Store System upgrades. McDonald's has independent, unlimited access to all transaction-level data.
McDonald's owns or leases all sites and subleases to franchisees. Franchisees have no role in site selection and cannot retain the location after termination or expiration. Effective rent ranged 0%–33.33% in 2024.
Franchisee Interview Prep
Questions to ask current franchisees — generated from red flags, Item 20 exit data, and contract terms in the 2025 FDD. Prioritized: critical questions first.
32 units closed in the most recent FDD period (29 were forced terminations). Ask franchisees: what actually drove those closures — was it market conditions, operations, or franchisor decisions?
Look for: Franchisees who left voluntarily vs. those terminated. Any pattern by region, years in system, or franchisee profile.
How responsive is your franchisor rep — do they actually help when you have a problem, or are they just checking boxes?
Look for: Specific stories (not just vague positives). Ask about a time they needed help urgently — response time matters.
If you decided to sell your franchise tomorrow, how easy would that be? Has the franchisor ever blocked or delayed a transfer you wanted?
Look for: Transfer fee surprises, right-of-first-refusal complications, or franchisor demanding upgrades before approving a sale.
Item 2 shows recent leadership changes. Ask current franchisees: has the change in leadership affected support quality, speed of decisions, or the culture of the system?
Look for: Whether the new leadership has franchise operations experience. Disruption in field support after leadership transitions is common.
What did your revenue look like in year 1 vs. year 2 vs. now? When did you reach breakeven?
Look for: Year 1 revenue is typically well below Item 19 averages (which often exclude ramp-up units). Expect 12-24 months to reach average.
What did the training actually cover vs. what you needed on day 1? What do you wish you'd learned before opening?
Look for: Gap between training content and operational reality. New franchisees often report the training covered theory but not real-world situations.
Knowing everything you know now, would you sign this franchise agreement again? What would you negotiate differently?
Look for: This is the single highest-signal question. Listen for hesitation. Franchisees rarely criticize their decision publicly; even mild reservations are meaningful.
How responsive is corporate support when you have an operational problem? Can you give me an example of when you needed help and how they responded?
Look for: Same-day response vs. days-long wait. Whether field support visits are proactive or only reactive. Quality of the franchisee hotline.
Geographic Concentration
State distribution analysis from FDD Item 20 (Table No. 3).Coverage estimate based on aggregate state count — per-state breakdown pending full extraction.
Well Distributed
Present in 51+ states — strong geographic diversification reduces single-state risk.
51
States Active
national
Coverage Type
0.02
HHI (concentration)
2%
Est. top-state share
ℹ Per-state breakdown will be available after Item 20 state-table extraction completes for this brand.
Community
Not FDD dataAnonymous Owner Submissions
No owner submissions yet for McDonald's. Be the first — your data helps future buyers.
Buyer Memo
One-page printable summary: investment, revenue, flags, and questions to ask.
View Memo →Full Diligence Memo
Item 19, system health, red flags, contract terms — cited to the filed FDD.
Full Analysis →Lender Readiness Pack
SBA-ready summary: investment ranges, scenario economics, franchisor financials.
View Lender Pack →Get the Full Report
Standard
$29
- Full score breakdown & analysis
- Red flag deep dive
- FDD summary (Items 1-23)
Premium
$79
- Everything in Standard
- Item 19 financial modeling
- Competitor comparison
- Community data overlay
Executive
$199
- Everything in Premium
- 10-year pro forma model
- Litigation deep dive
- Territory analysis & map
Data sourced from the 2025 FDD filed with a state franchise regulator (IL DFI/CARDS filing). Fields not extractable from the PDF are shown as not available. Last updated 2026-04-05.
Full production extraction from 389-page 2025 FDD filed with WI DFI (file #638437). 120+ canonical fields, 15 tables, 20 exhibits, 30+ contract burden clauses extracted. Regression-checked against 1,215-field gold corpus.
Franchisel is independent and does not accept payments from franchisors. Scores reflect editorial analysis, not franchisor endorsement.