In a world filled with burger-loving people, many newer brands are sure to come out in the near future. Each brand claims to have something bigger and better. While most people may choose to go for these brands, McDonalds’ is still referred to as the one true king of fast food burgers.
This brand has been offering better and more efficient dining and franchising services for years, and this company remains a hot spot for real estate investors. This article covers everything you need to know about getting a McDonalds’ franchise for sale.
Background and Benefits
Every burger fan in the US can tell you the McDonald’s menu by heart. This company serves over 50 million people worldwide every day, and these numbers are sure to increase due to their unique advertising style.
Before you begin your search for a McDonalds’ franchise for sale, note that this brand deals only with successful and business-oriented individuals who have successfully managed several businesses and have a strong financial resource.
McDonald’s Corporation claims to be all about expanding business, making money, and having a good time. They require only business-minded investors who can contribute to the business growth they need.
This fast food company has over 30,000 restaurants worldwide, the majority of which are franchises. Furthermore, most McDonald’s stores net over $2 million in sales annually.
Understanding the Costs of a McDonald’s Franchise
Before you begin your hunt for a McDonalds’ franchise for sale, you must first understand what options are available to you. You can either go for an existing franchise, launch a new one in a new location, or buy a McDonald’s franchise property for lease. Let’s have a look at the franchise options available.
Buy a McDonald’s Property for Lease
One way to own a piece of McDonald’s without being actively involved in managing a franchise is to buy a McDonald’s franchise property and lease it out in a triple net lease. The lowest lease term for McDonald’s is ten years. So as a McDonald’s property owner, you can offer a 15 years lease, which will be open for review and increment every five years.
If you decide to own an existing McDonald franchise, note that you’ll be getting a few perks along with the deal. These perks include well-trained staff and a built-in customer fan base. However, this brand requires investors to have a minimum of $500,000 available in liquid assets, which is essentially the cash you need to buy a franchise McDonalds’.
The cost of buying an existing franchise depends on several factors such as location’s profitability, sales volume, and renovation needs. In summary, the cost of a franchise deal varies, but you can expect to spend more than a million dollars for a McDonald’s franchise.
Furthermore, if a McDonalds’ restaurant doesn’t bring in enough sales, such a restaurant will be placed on the market. Note that if you decide to go for such an existing franchise, you’ll have to spend more to get the restaurant due to the additional McDonald’s planned marketing costs required to bring the location back to life.
Another factor that affects the cost of owning a McDonalds’ franchise is the amount of competition in an area. You may have to spend extra if the restaurant is in an area with several McDonald’s franchises and competitor restaurants. Furthermore, investors are required to have 25 percent of an existing franchise purchase price in cash.
The investor can get the remaining percentage of the purchase price from a lending institution. Additionally, McDonald’s requires the brand to pay off the debt over seven years.
You, as an investor, are sure to get value for your money if you decide to make a move on McDonald’s restaurants for sale. If you wish to begin your business in a profitable area, then this brand may approve your request to open a franchise in a new market. This act is known as “buying” a franchise.
However, note that McDonald’s only considers investors who already have lots of experience running a McDonald’s restaurant. Investors with the go-ahead to start a McDonald’s franchise can expect to pay between $1,314,500 and $2,306,500 to get their businesses up and running. However, note that investors must pay a $45,000 franchise fee upfront.
Furthermore, the cost of starting a new franchise depends on several factors, such as the restaurant’s location, store type, and size. Here’s a list of some of the costs involved with starting a new franchise:
- Kitchen equipment
- Interior decor and exterior landscaping
- Construction expenses
- Hiring and training
Furthermore, new franchisees must pay 40 percent of the overall cost of the restaurant upfront. However, if an investor doesn’t have enough cash on hand, he can seek financial help from any lending institution that has a good relationship with McDonald’s.
What to Know About McDonald’s’ Ongoing Costs
Investors in business with McDonalds’ are also expected to pay certain fees regularly. McDonald’s requires its business partners to pay a four percent monthly fee. However, this fee also depends on the restaurant’s overall performance. Franchisees are also required to pay a monthly rent to McDonald’s based on a percentage of sales.
Whether you’re starting as a new franchise or an existing franchise from this group, you can reach out to lending institutions for help. You can compare the interest rate of several lenders and choose one with better offers. Furthermore, note that some financial lenders offer special franchise loans to interested investors with repayment terms of up to seven years.
Why Choose a McDonalds Franchise
As a McDonald’s franchise investor, note that this brand is greatly interested in your success. McDonald’s offers hands-on training, outstanding support services, unrivaled brand recognition, and the materials you’ll need to make your business a success.
McDonald’s is a sure bet for franchisees looking for a real “all-in” franchise opportunity with guaranteed community presence and consistent revenues.
Note that you’re one step to expanding your investment if you satisfy all McDonald’s franchise requirements. McDonald’s is a popular burger brand, and this brand always creates room for more expansion opportunities.
If you’re interested in getting a McDonald’s franchise for sale, note that you can start either as a new franchise, an existing franchise, or a McDonald’s property investor. Additionally, the cost of purchasing a McDonald’s franchise varies depending on several factors such as location’s profitability, sales volume, and renovation needs.
Furthermore, note that this brand provides you with several resources, services, and materials you’ll need to make your business a success.