McDonald's Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$525,000 - $2,728,000
Min Cash Required
$250,000
Total US Locations
13,559
Business Summary
McDonald's USA, LLC develops, operates, franchises, and services a system of quick service restaurants that prepare and sell a limited menu of value-priced foods under the McDonald's System across the U.S. McDonald's restaurants offer a high standard of quality and uniformity in food, service, and decor. These locations can be freestanding buildings, storefronts, food courts, or integrated into other retail spaces like Walmart stores (known as Satellite locations). Some McDonald's restaurants are also found within fuel station/convenience store facilities (small town oil or STO locations) or anchor small retail centers in rural communities (small town retail or STR locations). Additionally, McDonald's may offer Business Facilities Lease (BFL) franchises where the lease includes the business facilities.
Corporate History
McDonald's USA, LLC is a Delaware limited liability company and a wholly-owned subsidiary of McDonald's Corporation. McDonald's Corporation, the predecessor, began granting franchises for McDonald's restaurants in 1955. In 1960, the predecessor started franchising to McOpCo companies. In 2004, McDonald's USA, LLC was formed as a subsidiary, and in 2005, a majority of the U.S. business assets and franchises were transferred to it. In 2007, restaurants in Puerto Rico and the Virgin Islands operated by McOpCo companies were sold, and a master franchise was granted to LatAm, LLC, which is not an affiliate of McDonald's. The company operates a system of quick-service restaurants offering a limited menu of value-priced foods.
Financial Overview
Investment Range
$525,000 - $2,728,000
Franchise Fee (High)
$45,000
Minimum Cash Required
$250,000
Royalty %
5%
Marketing %
4%
Equipment Costs (Low)
$1,100,000
Equipment Costs (High)
$1,785,000
Working Capital
$344,500
Audited Financials
Yes
Offers Financing
Yes
Audit Opinion
Unqualified opinion
Financial Health Notes
McDonald's USA, LLC's financial statements show consistent growth in total revenues, operating income, and net income over the past three years, with net income rising from $3,095.7 million in 2022 to $3,461.6 million in 2024. The independent auditors issued an unqualified opinion on the consolidated financial statements, indicating they present fairly the financial position and results of operations in all material respects. There are no notes indicating any substantial doubt about McDonald's USA, LLC's ability to continue as a going concern.
Financing Details
McDonald's USA, LLC typically does not offer direct financing. However, its predecessor, McDonald's Corporation, may, at its discretion, guarantee loans made by a third-party lender, Bank of America, N.A., to franchisees. These guaranteed loans can be used for purposes such as remodeling existing restaurants, acquiring restaurant businesses, or purchasing restaurant assets under a Business Facilities Lease (BFL) option. The loan terms typically range from 3 to 5 years, with a 7-year amortization, and are secured by restaurant equipment, seating, signage, decor, and inventory. As of March 17, 2025, the annual percentage rate (APR) for these loans was 7.42%. Franchisees will pay a guarantee fee (currently 1.50% of the average outstanding balance) to McDonald's for this service. A personal guarantee from the franchisee and their spouse is required, and a default on these loans is considered a material breach of the Franchise Agreement, requiring the franchisee to sign an Operator Assistance Program Agreement with McDonald's.
Performance Metrics
Total US Locations
13,559
Franchised Units
12,887
Corporate Units
672
Franchising Since
1955
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
27
Litigation Summary
McDonald's USA, LLC has been involved in significant litigation, with several cases currently pending. These include class-action lawsuits brought by former franchisee employees alleging that McDonald's franchise agreement unlawfully restricted them from taking higher-paying jobs at other McDonald's-brand restaurants, leading to reduced wages and poor working conditions. There are also claims from former franchisees alleging racial discrimination, fraudulent inducement, and civil rights violations against McDonald's and its predecessor. A device manufacturer has sued McDonald's Corporation for false advertising and trade libel related to their ice cream machine repair device. Other pending cases include a franchisee alleging discrimination and retaliation, a purported class action from customers claiming E. coli exposure from sandwiches, and numerous labor and employment lawsuits by franchisee employees alleging joint employer status, discrimination, harassment, and wage violations. McDonald's is vigorously defending these actions. In recent years, McDonald's has also settled various cases, including a Taiwan affiliate's pre-contractual disclosure dispute, a class action regarding Mozzarella Cheese Sticks advertising, a copyright infringement case, California labor code and joint employer lawsuits, a class action about Happy Meal drink upcharges, a dispute over intellectual property for an in-store media channel, cases involving the franchisor's right of first refusal, several discrimination-related lawsuits filed by franchisees, a cybersecurity breach case, class action lawsuits concerning PFAS chemicals in food packaging, and a class action regarding digital menu board pricing discrepancies.
Bankruptcy History
McDonald's USA, LLC has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Conditions
McDonald's USA, LLC franchisees do not have a contractual right to renew or extend their franchise. However, McDonald's has a New Term Policy where a new term franchise may be offered at their sole discretion if certain conditions are met. To be considered, franchisees must apply in the 16th year of their term and demonstrate consistent compliance with the National Franchising Standards and their Franchise Agreement. If a new term offer is approved, it is conditional upon continued compliance and is subject to available real estate tenure. Additional conditions may be imposed, often related to required reinvestment, rebuilds, relocations, real estate issues, or ownership policy. For example, if a franchisee owns or leases additional property deemed essential, McDonald's may require obtaining a controlling interest in it. Franchisees accepting a new term offer must sign the then-current franchise agreement, with rent calculated based on the new term rent policy, while the royalty rate generally remains the same.
Training & Support Program
Franchisor Assistance
McDonald's USA, LLC provides comprehensive assistance to its franchisees. Before opening, McDonald's is responsible for selecting and preparing the restaurant premises. They also prescribe detailed specifications for purchasing, preparing, and serving food, and provide a list of approved suppliers. Franchisees undergo a mandatory Candidate Development Program, which includes in-restaurant and classroom training at Hamburger University in Chicago, IL, covering all crew and management functions, guest satisfaction, operational standards, financial controls, and leadership. Ongoing support includes periodic advice and consultation from operations consultants, communication of new developments and techniques through reports, seminars, newsletters, emails, and online resources. Franchisees receive and are required to use the McDonald's Operations and Training Manual and other business manuals, which are periodically updated. For marketing, McDonald's employs advertising and marketing consultants who develop national programs, with franchisees contributing to OPNAD and local advertising cooperatives. Technology assistance includes providing and maintaining the proprietary Store Systems, such as the Sesame POS platform, Cashless 3.0 System, and Gift Card System, with software upgrades included in an annual maintenance fee.
Initial Training Hours
565
Training Location
Hamburger University in Chicago, IL
Ongoing Support
After opening, McDonald's USA, LLC provides ongoing support to its franchisees through various channels. This includes periodic advice and consultation on restaurant operations from operations consultants, with communications delivered via visits, printed reports, seminars, newsletter mailings, emails, and online resources. McDonald's also makes available and updates its Operations and Training Manual and other business manuals, which contain detailed information on procedures, controls, and policies. Technology support involves providing and maintaining the proprietary Store Systems, including software upgrades for the POS, Cashless, and Gift Card systems. Additionally, McDonald's offers ongoing training opportunities such as annual meetings, conventions, workshops, and other training sessions within each field office, with some optional courses available for a fee.
Franchise Requirements
Ideal Candidate Profile
McDonald's USA, LLC seeks individuals who are committed to living in the local area of their McDonald's restaurant. The ideal candidate must own the entire equity interest in their business and its profits, and is required to dedicate full-time effort and provide personal, on-premises supervision of the day-to-day operations of their McDonald's restaurant business.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Hands-On
Territory Type
Non-Exclusive
Territory Size Requirements
McDonald's franchises grant a limited right to operate a specific restaurant at a developed address. McDonald's does not provide an exclusive territory, exclusive area, or protected territorial rights. Franchisees may face competition from other McDonald's franchisees, company-owned outlets, or other distribution channels or competitive brands controlled by McDonald's. No specific size, population, or geographic criteria are provided to define a territory.
Staffing Notes
McDonald's USA, LLC requires its franchisees to employ adequate personnel to operate the restaurant at its maximum capacity and efficiency. Franchisees must ensure all employees, while working in the restaurant, wear designated uniforms, maintain a neat and clean appearance, and provide competent and courteous service to customers. The franchisee is also required to perform and master all crew and management functions within the restaurant.