How to Purchase a McDonald's Franchise
In its 2010 rankings, "Entrepreneur" magazine ranks McDonald's as the No. 6 business on its "Fastest-Growing Enterprises" list and No. 2 on its "Franchise 500" and "America's Top Global Franchises" lists. In addition to the U.S., McDonald's commands a presence in 118 countries and in 2009 boasted more than 25,000 franchises. If you are interested in owning a McDonald's franchise, you must be financially secure and have time, restaurant management and operations skills, and money. "Entrepreneur" says you should expect to invest $995,900 to $1,842,700 for a McDonald's franchise.
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Instructions
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Gather information about your financial standing, credit rating and employment. Evaluate this information to determine if a McDonald's franchise is the right choice for you. Before you invest in a franchise, the Federal Trade Commission says, you must think about how much money you have available for investment, your abilities and your goals.
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Find the McDonald's franchise application for your chosen location on the "About McDonald's" website (see Resource). McDonald's offers an application for U.S.-based franchises and a country-specific applications for international locations. Forward the completed application online, or mail your application to the address specified for your franchise location.
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Complete the interview process. McDonald's invites successful applicants for an initial interview. The initial interview can lead to a three-day restaurant evaluation interview. Franchise candidates spend three days at an actual McDonald's restaurant learning about McDonald's processes. Strong candidates are then invited for an interview to determine if they're qualified for franchise ownership feasibility. Expect scrutiny of your financial situation at this point.
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Complete the McDonald's franchise ownership training. Franchise ownership students can expect to invest approximately nine months to one year in training. Completing the training is dependent on the time and effort you are willing to invest, and your ability to successfully master McDonald's restaurant operations.
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Determine whether you will purchase an existing or a new McDonald's restaurant, and pay the initial costs and down payment. The type of McDonald's franchise you purchase is especially important, because the required down payments are significantly different. In addition to the initial $45,000 fee that must be paid to McDonald's, you must provide unborrowed cash for 40 percent of the cost for a new McDonald's restaurant.
Note that McDonald's states that equipment and opening costs for a new franchise range from $1,012,200 to $1,840,000. For an existing McDonald's restaurant, your down payment is 20 percent of cost. You may purchase an existing McDonald's restaurant from a franchise owner or directly from McDonald's.
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Pay ongoing franchise fees and rent. As of 2010, McDonald's says, the monthly service fee is 4 percent of monthly sales, and rent is a percentage of monthly sales.
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References
Resources
- Photo Credit burger image by Yvonne Bogdanski from Fotolia.com
