McDonald's franchise
A franchisee operates one McDonald's quick service restaurant preparing and selling a limited menu of value-priced food under the McDonald's System, in premises the franchisee must lease from McDonald's.
Owner-operator required Disclosed
- Source
- 2026 Franchise Disclosure Document — McDonald's USA, LLC
- Document
- FDD 2026, issued 2026-05-01, amended 2026-07-01
- Item
- Item 15
- Page
- PDF p. 39
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640986
full time and best efforts to, and personal on-premises supervision of, the day-to-day operation
Item 15 is a single paragraph requiring the franchisee to give full time and best efforts to, and personal on-premises supervision of, the day-to-day operation of the restaurant, under paragraphs 1(e) and 13 of the Franchise Agreement. No manager substitution or absentee arrangement is offered.
What stands out
- Traditional restaurant investment is $1,472,000 to $2,807,000 including a $45,000 initial franchise fee, excluding any purchase of land or building because McDonald's owns or controls the site.
- The franchisee must lease the restaurant from McDonald's and pay base rent plus percentage rent generally between 6% and 23% of Gross Sales, rising to a general minimum of 11.50% from the eighth year — rent is typically larger than the 4% or 5% royalty.
- Item 19 discloses a 2025 average of $4,057,000 and a median of $3,887,000 for approximately 12,212 domestic traditional franchised restaurants open at least one year, with a range from $1,063,000 to $20,421,000.
5 more observations
- The Item 19 pro forma operating income before occupancy costs of $732,000 to $864,000 excludes rent, royalty, depreciation, interest and taxes and is not a profit figure.
- There is no exclusive territory, no right to renew, and Item 15 requires the owner to provide full time and personal on-premises supervision.
- Franchised outlets grew from 12,764 to 13,062 between 2023 and 2025, with 516 openings and 218 departures, and 2,243 transfers between owners over the three years.
- Item 3 lists 25 matters, including franchisee-brought discrimination claims that McDonald's has settled by purchasing the plaintiffs' restaurants for sums up to $33,500,000.
- Item 8 states required purchases are roughly 55% to 65% of operating purchases, and about 68% of McDonald's USA's 2025 revenue came from the sale or lease of real estate and services to franchisees.
Things to verify
- Ask for the specific base rent and percentage rent for the restaurant being offered before signing; Item 6 says the rate is provided before signing and Item 19's profit figures exclude it entirely.
- Confirm whether the royalty will be 4% or 5%, which depends on how the restaurant is acquired.
- Ask what the co-investment option would cost and what rent reduction it buys, since Item 6 prices it at generally not less than $30,000 for each 0.25% of rent reduction on top of the Item 7 range.
5 more questions
- Ask for the full current schedule of annual technology fees; Item 6 lists more than twenty and says they may increase over time.
- Because there is no renewal right, ask how the New Term Policy has actually been applied in the region and what percentage rent a new term would carry.
- Ask why 9 of the 35 McOpCo restaurant sales in 2025 exceeded the high end of the Item 7 range, by up to $1,500,000.
- Contact franchisees from Exhibits R and S, keeping in mind Item 20's statement that some are subject to provisions restricting what they can say.
- Verify the total time and cost of the unpaid Candidate Development Program, which Item 11 says can take 6 months to two years and must be completed before signing or paying anything.
Category cost placeholders, not a forecast. Owner operation is required; a manager-pay deduction does not make this an absentee model. This snapshot uses the default inputs; the calculator below updates when you edit them.
Evidence confidence: High. This describes source support, not investment quality. AI-extracted and machine-verified where stated; no human line-by-line review. Source and review record.
Read the full research overview
A McDonald's franchisee operates one quick service restaurant selling a limited menu of value-priced food under the McDonald's System. The structure differs from most franchises in one respect that shapes everything else: McDonald's buys or controls the site and building, and the franchisee must lease the premises from McDonald's under an Operator's Lease incorporated into the franchise agreement. Item 12 grants no exclusive territory, Item 15 requires the owner to give full time and personal on-premises supervision, and Item 17 states there is no right to renew the generally 20-year term.
Item 7 estimates $1,472,000 to $2,807,000 to open a traditional restaurant, including a $45,000 initial franchise fee, three months of base rent and three months of additional funds, and excluding any land or building purchase. Small town oil and small town retail locations run $1,015,500 to $1,864,500 with a $22,500 fee, and Satellites $701,000 to $1,411,500 with a fee of $0 to $500. Continuing costs are a royalty of 4% or 5% of Gross Sales — 5% for a franchisee opening a new restaurant — an advertising requirement of not less than 4% of Gross Sales paid to local cooperatives and the OPNAD national fund rather than to McDonald's, more than twenty separate annual technology fees, and rent: monthly base rent plus percentage rent generally between 6% and 23% of Gross Sales, generally at least 11.50% from year eight.
Item 19 reports both sales and a partial cost picture. The roughly 12,212 domestic traditional franchised restaurants open at least a year at December 31, 2025 averaged $4,057,000 in 2025 sales, with a median of $3,887,000 and a range from $1,063,000 to $20,421,000. Pro forma statements built from 11,512 independent franchisee restaurants show operating income before occupancy costs of $732,000 to $864,000 at assumed sales of $3,000,000 to $3,400,000, but those figures exclude rent, royalty, depreciation, interest and taxes, and Item 19 declines to give average occupancy costs. Satellite, small town oil and small town retail locations are not covered by any Item 19 figure.
Item 20 shows franchised outlets rising from 12,764 to 13,062 across 2023 to 2025 while company-operated outlets fell from 691 to 644. Over the three years 516 franchised outlets opened and 218 left the system, and 2,243 outlets changed owners. McDonald's projects 231 new franchised restaurants next fiscal year and reports no signed agreements for outlets not yet open. Item 3 lists 25 matters, 4 of them pending, including race and age discrimination claims by current and former franchisees, several settled by McDonald's buying the plaintiffs' restaurants, plus consumer class actions; Item 4 discloses no bankruptcy.
View ratings and their supporting evidence
Transparent ratings
How these are computedEach dimension is scored 1–5 from published formulas. Missing data yields “Not enough evidence to rate”, never a low score. There is no composite score by design.
How the system has performed, computed from the disclosed Items 7, 19 and 20. Figures a documented material source inconsistency puts in doubt are excluded, and the dimension shows “Not rated”.
Inputs
- Franchised outlets 12764 → 13062 (Item 20, Table 3)
- Thresholds: ≥15% → 5; 5–15% → 4; 0–5% → 3; −5–0% → 2; below −5% → 1
Inputs
- Attrition = (terminations + non-renewals + reacquisitions + ceased-other) ÷ start-of-year franchised units, averaged over 3 fiscal years
- Thresholds: <2% → 5; 2–4% → 4; 4–6% → 3; 6–10% → 2; >10% → 1
Inputs
- AUV $4,057,000 (disclosed) ÷ midpoint investment $2,139,500 = 1.90×
- Thresholds: ≥2.0 → 5; 1.5–2.0 → 4; 1.0–1.5 → 3; 0.7–1.0 → 2; <0.7 → 1
How much this brand’s FDD discloses, and how well-supported our data on it is. This measures transparency, not business performance — a strong business that discloses little scores low here and stays unrated above.
Inputs
- Item 19 present (+1)
- Average plus median or a distribution (+1)
- Population 94% of franchised units, clearly described (+1)
- Cost or profit data disclosed (+1)
Details
- Missing: Ad fund
- Franchisor Track Record
- Franchising 71 years (since 1955) · 13,706 outlets · Item 3: 25 matter(s) disclosed · Item 4: none disclosed
- Multi-Unit Scalability
- No multi-unit or area development agreement is offered. Item 17 note 3 states that the franchisee has no right to acquire additional franchises and refers an… · Owner-operator required
- Operational Intensity
- Owner-operator required
Initial investment
FDD Items 5 and 7Format shown: Traditional McDonald's restaurant (new, on a site McDonald's acquires and leases to the franchisee)
$1,472,000–$2,807,000 total initial investment. Excludes real estate purchase. Includes 3 months of additional funds.
View full investment breakdown — Items 5 & 7
| Initial franchise fee (the named Item 5 fee only) | $45,000 Disclosed
Standard fee for a traditional restaurant with a full term. Lower/prorated amounts apply only to non-standard cases: McOpCo (none), shorter real-estate tenure or agreed terms (prorated), rebuilt/relocated locations (credited), Satellite locations ($500, or none for Walmart), and STO/STR locations ($22,500) — none of these is the standard new single-unit case. |
|---|---|
| Total initial investment — low | $1,472,000 Disclosed
Traditional restaurant. The printed total equals the sum of the traditional line items. |
| Total initial investment — high | $2,807,000 Disclosed
Traditional restaurant. The printed total equals the sum of the traditional line items. |
| Midpoint of range | $2,139,500 Derived
|
| Real estate purchase included? | No — assumes a leased site |
| Additional funds assumed | 3 months |
| Required liquid capital | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. No minimum liquid capital requirement appears on the cover pages or in Items 1, 5, 7, 11 or 15. Item 6 note 8 says only that personal net worth and liquidity are among the factors McDonald's considers when deciding whether to offer a Business Facilities Lease franchise; no threshold is stated. |
| Required net worth | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. No minimum net worth requirement is stated anywhere in the reviewed items. |
Item 7 covers a traditional restaurant and excludes any purchase of land or a building: note 5 states that McDonald's acquires the real estate and building and franchises the right to operate at that location, so the franchisee leases the premises from McDonald's and the only occupancy amount in the table is three months of base rent. The table also excludes percentage rent and royalty (note 11), both of which are continuing costs described in Item 6. Additional funds cover three months of operating expenses. The optional co-investment policy in Item 6 note 4 lets a franchisee pay McDonald's an additional amount (generally not less than $30,000 for each 0.25% of rent reduction) on top of the Item 7 range in exchange for a lower percentage rent. Item 7 note 11 discloses that of the 35 McOpCo restaurant sales in 2025, 9 exceeded the high end of the initial investment range, by amounts from $53,000 to $1,500,000.
Item 7 line items (7)
| Expenditure | Low | High |
|---|---|---|
| Initial franchise fee — Lump sum, payable to McDonald's on opening. | $45,000 | $45,000 |
| Real estate and building — 3 months' base rent — Payable to McDonald's; special site restaurants may be higher. Percentage rent is additional and is not in the total. | $0 | $310,000 |
| Signs, seating, equipment and decor — Includes the current Technology Platform at $165,000 to $265,000. | $1,100,000 | $1,850,000 |
| Opening inventory | $20,000 | $39,000 |
| Miscellaneous opening expenses | $55,000 | $68,000 |
| Travel and living expenses while training | $2,000 | $43,000 |
| Additional funds — 3 months | $250,000 | $452,000 |
Source for every row: the Item 7 estimated-initial-investment table of 2026 Franchise Disclosure Document — McDonald's USA, LLC (table begins PDF p. 24) — rows inherit the table's citation rather than carrying fifteen identical ones.
Other formats disclosed in Item 7 (2)
| Format | Low | High | Fee |
|---|---|---|---|
| Small town oil (STO) and small town retail (STR) location | $1,015,500 | $1,864,500 | $22,500 |
| Satellite location (in-store, food court, airport, university and similar) | $701,000 | $1,411,500 | $500 |
Ongoing fees
FDD Item 6Royalty
4%–5% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — McDonald's USA, LLC
- Document
- FDD 2026, issued 2026-05-01, amended 2026-07-01
- Item
- Item 6
- Page
- PDF p. 18
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640986
5% or 4% of Gross Sales, depending on the circumstances
Item 6 states a royalty of 5% or 4% of Gross Sales depending on the circumstances, payable monthly. Since January 1, 2024 the 5% rate applies when a franchisee opens a new restaurant, buys a restaurant in a McOpCo sale, or buys a restaurant that McDonald's acquired by exercising its right of first refusal — so a new franchisee taking a new restaurant pays 5%. The 4% rate continues for specified existing-restaurant situations: family transactions and ownership transfers, new term agreements on existing restaurants, sales of an existing restaurant between franchisees, and rebuilds. Gross Sales include all revenue from business conducted at or from the restaurant, excluding sales and use tax.
Brand advertising fund
Not disclosed in the reviewed source Not disclosed
Not disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures.
Not less than 4% of Gross Sales
Item 6 shows a single advertising and promotion line of not less than 4% of Gross Sales, to be spent during each calendar year. Note 5 states the amount is not payable to McDonald's. Most franchisees participate in local advertising cooperatives and the national advertising fund (OPNAD); the contribution rates are set by franchisees and may or may not exceed the 4% minimum. Grand opening promotions are described as strongly recommended.
Local marketing
4% of gross sales Disclosed
- Source
- 2026 Franchise Disclosure Document — McDonald's USA, LLC
- Document
- FDD 2026, issued 2026-05-01, amended 2026-07-01
- Page
- PDF p. 18
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640986
Item 6 does not state a separate required local advertising spend. The 4% of Gross Sales advertising and promotion minimum is a single combined requirement covering local cooperative and national fund contributions and is recorded in ad_fund; splitting it would double count.
Core requirements shown separately; caps, credits and conditions may overlap. Check the full schedule for technology, cooperative, transfer and other charges.
View all recurring fees and conditions
| Royalty | 4%–5% of gross sales Disclosed
Item 6 states a royalty of 5% or 4% of Gross Sales depending on the circumstances, payable monthly. Since January 1, 2024 the 5% rate applies when a franchisee opens a new restaurant, buys a restaurant in a McOpCo sale, or buys a restaurant that McDonald's acquired by exercising its right of first refusal — so a new franchisee taking a new restaurant pays 5%. The 4% rate continues for specified existing-restaurant situations: family transactions and ownership transfers, new term agreements on existing restaurants, sales of an existing restaurant between franchisees, and rebuilds. Gross Sales include all revenue from business conducted at or from the restaurant, excluding sales and use tax. Item 6 states a royalty of 5% or 4% of Gross Sales depending on the circumstances, payable monthly. Since January 1, 2024 the 5% rate applies when a franchisee opens a new restaurant, buys a restaurant in a McOpCo sale, or buys a restaurant that McDonald's acquired by exercising its right of first refusal — so a new franchisee taking a new restaurant pays 5%. The 4% rate continues for specified existing-restaurant situations: family transactions and ownership transfers, new term agreements on existing restaurants, sales of an existing restaurant between franchisees, and rebuilds. Gross Sales include all revenue from business conducted at or from the restaurant, excluding sales and use tax. |
|---|---|
| Advertising / brand fund | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures.
Item 6 shows a single advertising and promotion line of not less than 4% of Gross Sales, to be spent during each calendar year. Note 5 states the amount is not payable to McDonald's. Most franchisees participate in local advertising cooperatives and the national advertising fund (OPNAD); the contribution rates are set by franchisees and may or may not exceed the 4% minimum. Grand opening promotions are described as strongly recommended. |
| Required local marketing | 4% of gross sales Disclosed
Item 6 does not state a separate required local advertising spend. The 4% of Gross Sales advertising and promotion minimum is a single combined requirement covering local cooperative and national fund contributions and is recorded in ad_fund; splitting it would double count. Item 6 does not state a separate required local advertising spend. The 4% of Gross Sales advertising and promotion minimum is a single combined requirement covering local cooperative and national fund contributions and is recorded in ad_fund; splitting it would double count. |
| Technology / software | $16,501/year Derived
Sum of the sixteen recurring annual technology fees in the Item 6 table that are not marked optional: Sesame POS 1,133 + Global Mobile App/Digital Capabilities 664 + McDelivery POS Integration 620 + Self-Ordering Kiosk 558 + eProduction 47 + Back Office Integration 545 + Payments and Fraud Management 740 + Employee Engagement Platforms 385 + Deployment, OTP, Execution and Support 2,866.04 + Restaurant Network Management 1,134 + Restaurant Hardware and Data Movement 951 + Restaurant File Maintenance 690 + Microsoft License Subscription 707 + GRNT 185 + Edge 5,220 + Store Mail 56.40 = 16,501.44. Excludes the five fees Item 6 labels optional and all one-time fees. Each component is listed separately in other_recurring. |
| Advertising cooperative | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. Item 6 does not state a separate cooperative contribution rate. Local advertising cooperative contributions form part of the single 4% of Gross Sales advertising and promotion minimum recorded in ad_fund, and the rates are set by the franchisees themselves. |
| Transfer fee | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. Item 6 lists no transfer fee. Item 17 states that a condition of McDonald's approving a transfer is that the royalty increases to the then-current rate, except in the situations listed in Item 6. |
| Renewal fee | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. Item 6 lists no renewal fee and Item 17 states the franchisee has no right to renew or extend. Where McDonald's chooses to offer a new term franchise under its discretionary New Term Policy, Item 5 provides that the $45,000 initial franchise fee is payable on opening of a restaurant, prorated where the term is 10 years or less; no separate renewal charge is disclosed. |
| Royalty + ad fund (% of sales) | Not comparable — royalty 4%; the other fee is not a percent of sales Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. |
Fee schedule (43 fees; 42 verified against the source, 1 single-pass)
Every recurring, conditional and one-time fee found in this FDD's Item 6 table (plus mandatory recurring costs disclosed in Items 7/11), each cited to its page and carrying its verification status: verified means two independent readings agreed or a tie-break re-inspection of the page decided it; single-pass means one reading captured it and it has not been independently confirmed (permitted only for fees that cannot move modeled economics — see the materiality rule). Amounts marked “not stated” are charged at then-current rates the FDD does not quantify and are never modeled as $0.
| Fee | Amount | Frequency | Mandatory | Verification | Cite | Notes |
|---|---|---|---|---|---|---|
| Royalty | 4%–5% of gross sales | monthly | Yes | verified (tie-break) | Item 6, p. 18 | Note 2: 5% of Gross Sales on and after January 1, 2024 for (i) a new restaurant, (ii) a purchase out of a McOpCo sale, and (iii) a resale after McDonald's exercises its right of first refusal. 4% continues for pre-2024 existing restaurants operated by existing franchisees: family transactions and ownership transfers, new-term agreements on existing restaurants, franchisee-to-franchisee sales of existing restaurants, and rebuilds. |
| Advertising and Promotion | 4% of gross sales | annual | Yes | verified (2-pass) | Item 6, p. 18 | |
| OPNAD National Advertising Fund Contribution | 2.25% of gross sales | annual | No | verified (tie-break) | Item 11, p. 31 | Participation is not required; consistent involvement with OPNAD is one factor in the Operator Involvement standard, and declining forfeits access to that cooperative's programs. |
| Local Advertising Cooperative Contribution | Not stated | varies | No | verified (tie-break) | Item 11, p. 31 | Participation is not required. If you join, you contribute at the same rate as other members with similar restaurants or restaurants in the same general area. |
| Monthly Base Rent (traditional restaurants) | Not stated | monthly | Yes | verified (2-pass) | Item 6, p. 21 | |
| Percentage Rent (new and relocated traditional restaurants) | 6%–23% of gross sales | monthly | Yes | verified (tie-break) | Item 6, p. 21 | Applies to new and relocated traditional restaurants opening on or after January 14, 2026. The site-specific rate is disclosed before signing, generally rises during the first seven years, and the total change over the term generally will not exceed 3.50 percentage points unless a larger increase is needed to reach the 11.50% floor. |
| Pass Thru Rent | Not stated | monthly | No | verified (2-pass) | Item 6, p. 18 | Applies only where McDonald's leases the land/building from a third party and that lease has rent escalations. |
| Audit/Inspection Fee | Not stated | per event | No | verified (2-pass) | Item 6, p. 18 | Payable only if an audit/inspection shows an understatement of at least 2% of Gross Sales. |
| Satellite Annual Fee | $500–$2,500 | annual | Yes | verified (2-pass) | Item 6, p. 18 | Applies only to Satellite-location franchisees (in addition to the $500 Satellite initial franchise fee, see Item 5). |
| Satellite Rent (non-MIW) | Not stated | monthly | Yes | verified (2-pass) | Item 6, p. 23 | Applies to Satellite restaurants other than McDonald's-in-Walmart (MIW) locations. |
| Fixed Percentage Rent (McDonald's in Walmart Satellites) | 14%–15.5% of gross sales | monthly | Yes | verified (tie-break) | Item 6, p. 23 | Applies only to McDonald's in Walmart (MIW) Satellite restaurants; all other Satellite restaurants pay an Annual or Monthly Base Rent set case by case. |
| Percentage Rent (Small Town Oil, STO) | Tiered (base 9.5%) | monthly | Yes | verified (tie-break) | Item 6, p. 23 | STO locations that opened on or after May 28, 2014. Above $1,000,000.01 of acquisition and development cost the rate is established case by case. |
| Percentage Rent (Small Town Retail, STR) | Tiered (base 9%) | monthly | Yes | verified (tie-break) | Item 6, p. 23 | STR locations that opened on or after May 28, 2014. Above $1,000,000.01 of acquisition and development cost the rate is established case by case. |
| BFL Rent | Not stated | monthly | Yes | single-pass | Item 6, p. 23 | Applies only to Business Facilities Lease (BFL) franchises. [Listed by one verification pass only (A); not independently confirmed.] |
| Relocation Contribution | $50,000 | one time | No | verified (2-pass) | Item 6, p. 18 | Required only if the franchisee relocates the restaurant to a new site. |
| Sesame POS Annual Fee | $1,133 | annual | Yes | verified (2-pass) | Item 6, p. 19 | |
| Sesame POS one-time installation fee | $2,600 | one time | Yes | verified (tie-break) | Item 6, p. 19 | Item 6 note 11: one-time fees are paid for new and existing restaurants that adopt the specified technology. One-time fee drafted via iReceivables upon installation of the Sesame Point of Sale system. |
| Global Mobile App / Digital Capabilities Fee | $664 | annual | Yes | verified (2-pass) | Item 6, p. 19 | |
| McDelivery POS Integration | $620 | annual | Yes | verified (tie-break) | Item 6, p. 19 | Support and maintenance of McDelivery order integration into the POS software. |
| Self-Ordering Kiosk licensing fee (one-time) | $1,500 | one time | Yes | verified (tie-break) | Item 6, p. 19 | Item 6 note 11: one-time fees are paid for new and existing restaurants that adopt the specified technology. Kiosk licensing fee paid as part of the standard construction billing. |
| Self-Ordering Kiosk software maintenance | $558 | annual | Yes | verified (tie-break) | Item 6, p. 19 | Kiosk technology and kiosk accessibility software maintenance, integration and localization. |
| Hand-Held Order Taker (HHOT) annual fee | $50 | annual | No | verified (tie-break) | Item 6, p. 19 | Item 6 states 'This is an optional fee.' Annual HHOT software maintenance. |
| Hand-Held Order Taker (HHOT) one-time fee | $500 | one time | No | verified (tie-break) | Item 6, p. 19 | Item 6 note 11: one-time fees are paid for new and existing restaurants that adopt the specified technology. One-time HHOT fee; the same row's remark marks the HHOT fees optional. |
| eProduction | $47 | annual | Yes | verified (tie-break) | Item 6, p. 19 | Support of eProduction software. |
| Back Office Integration and Enhancements | $545 | annual | Yes | verified (tie-break) | Item 6, p. 19 | Back office integration and enhancements to the store system platform. |
| Payments and Fraud Management | $740 | annual | Yes | verified (tie-break) | Item 6, p. 19 | Payments and fraud management software and related encryption services. |
| Employee Engagement Platforms | $385 | annual | Yes | verified (tie-break) | Item 6, p. 19 | Support and maintenance of Fred and Campus solutions and employee engagement platform integrations. |
| People Data Warehouse (PDW) Reporting | $167 | annual | No | verified (tie-break) | Item 6, p. 19 | Item 6 states 'This is an optional fee.' Support and maintenance of the people data warehouse reporting platform. |
| McD Connect | $250 | annual | No | verified (tie-break) | Item 6, p. 19 | Item 6 states 'This is an optional fee.' Use of McD Connect. |
| Restaurant Employee Experience Survey | $62 | annual | No | verified (tie-break) | Item 6, p. 19 | Item 6 states 'This is an optional fee.' Use of the Restaurant Employee Experience Survey. |
| Deployment, OTP, Execution and Support Fee | $2,866 | annual | Yes | verified (2-pass) | Item 6, p. 19 | |
| Restaurant Network Management, Access and Security Fee | $1,134 | annual | Yes | verified (2-pass) | Item 6, p. 20 | |
| Restaurant Hardware, Data Movement, Management, and Monitoring Fee | $951 | annual | Yes | verified (2-pass) | Item 6, p. 20 | |
| Restaurant File Maintenance (RFM) Fee | $690 | annual | Yes | verified (2-pass) | Item 6, p. 20 | |
| Microsoft License Subscription Fee | $707 | annual | Yes | verified (2-pass) | Item 6, p. 20 | |
| Pricing Engine Fee | $264 | annual | No | verified (2-pass) | Item 6, p. 20 | Optional fee. Explicitly marked optional. |
| DMB 2.0 deployment fee | $264 | one time | Yes | verified (tie-break) | Item 6, p. 20 | Item 6 note 11: one-time fees are paid for new and existing restaurants that adopt the specified technology. Deployment of DMB 2.0. |
| GRNT (Restaurant Network Transformation) Annual Fee | $185 | annual | Yes | verified (2-pass) | Item 6, p. 20 | Begins once deployed. |
| GRNT deployment fee (one-time) | $491 | one time | Yes | verified (tie-break) | Item 6, p. 20 | Item 6 note 11: one-time fees are paid for new and existing restaurants that adopt the specified technology. Deployment of GRNT. |
| Edge computing annual fee | $5,220 | annual | Yes | verified (tie-break) | Item 6, p. 20 | Use of Edge computing technology; drafted once deployed. Largest single recurring technology fee. |
| Edge deployment fee (one-time) | $120 | one time | Yes | verified (tie-break) | Item 6, p. 20 | Item 6 note 11: one-time fees are paid for new and existing restaurants that adopt the specified technology. Deployment of Edge. |
| Store Mail (email accounts) Fee | $56 | annual | Yes | verified (tie-break) | Item 6, p. 20 | Email account support for using the us.stores.mcd.com domain. |
| Ongoing training, conventions and workshops | Not stated | varies | No | verified (tie-break) | Item 11, p. 34 | Annual meetings, conventions, workshops and other ongoing training sessions may be conducted within each field office and McDonald's may require the franchisee to pay the associated costs; optional courses may be offered for a fee, and training at temporary remote locations may also be charged. The franchisee always bears travel, living and compensation costs. |
All fees in Item 6 are described as imposed by, collected by and payable to McDonald's except the advertising and promotion requirement, and are non-refundable; rent and royalty are drafted automatically from the franchisee's bank account. Item 6 also lists one-time technology charges not included in other_recurring: Sesame $2,600, self-ordering kiosk $1,500, HHOT $500, GRNT $491, DMB 2.0 $264 and Edge $120. Item 6 note 10 states the technology fees are reviewed periodically and may increase. Rent is the largest continuing payment to McDonald's and is recorded in other_recurring because Item 6 treats base rent, pass thru rent and percentage rent as part of a single financial arrangement with royalty.
Financial performance (Item 19)
What the franchisor actually disclosedWho is represented: Three separate sales populations, all limited to domestic traditional restaurants open at least one year as of December 31, 2025, measured over calendar 2025: approximately 12,212 franchised restaurants; approximately 490 McOpCo (company-operated) restaurants; and approximately 12,702 restaurants combining both. Satellite, small town oil and small town retail locations are not represented. The pro forma cost statements rest on a different and smaller population of 11,512 independent franchisee traditional restaurants open and operated by a franchisee for at least one year, excluding McOpCo restaurants, Satellites, and traditional franchised restaurants that changed owners in 2025.
Qualifications: The sales figures cover domestic traditional restaurants only; Satellite, small town oil and small town retail locations are not represented anywhere in Item 19, and no figures are given for restaurants open less than a year. The spread is wide: the highest 2025 franchised volume was $20,421,000 against a low of $1,063,000. The pro forma statements are not averages of the whole system but constructed statements at three assumed sales levels, each built from restaurants whose product sales fell in a $200,000 band around that level, and they exclude McOpCo restaurants, Satellites and restaurants that changed hands in 2025. Operating income before occupancy costs excludes rent, royalty, depreciation and amortization, interest and income taxes; because McDonald's franchisees lease from McDonald's, rent is a major omitted cost, and Item 19 states it is not presenting average occupancy costs, noting only that effective rent for franchised restaurants in 2025 ranged from 0.00% to 33.37%. Item 19 also states the pro forma figures should not be construed as profit. The McOpCo low figure is printed as '$$2,012,000'.
View full Item 19 disclosure and tables
McDonald's makes a financial performance representation covering both sales and a partial cost picture. On sales, it reports averages, medians, highs, lows and the share of restaurants above three sales thresholds for domestic traditional restaurants open at least a year at December 31, 2025, split three ways: franchised only, company-operated only, and both together. Franchised restaurants averaged $4,057,000 with a median of $3,887,000, and company-operated restaurants averaged more, at $4,871,000. On costs, it presents pro forma statements at $3,000,000, $3,200,000 and $3,400,000 of product sales showing operating income before occupancy costs of $732,000, $795,000 and $864,000. Those figures stop short of profit: they leave out rent, royalty, depreciation, interest and taxes, and Item 19 expressly declines to state average occupancy costs. Because the franchisee must lease from McDonald's and pay both base rent and percentage rent, the omitted rent is a substantial cost that varies restaurant by restaurant. No figures are given for Satellite, small town oil or small town retail locations.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Annual sales volume — domestic traditional franchised restaurants open at least 1 year | Domestic traditional franchised Average | $4,057,000 | 12,212 | CY2025 | FDD p.42 |
| Annual sales volume — domestic traditional franchised restaurants open at least 1 year | Domestic traditional franchised Median | $3,887,000 | 12,212 | CY2025 | FDD p.42 |
| Highest annual sales volume — domestic traditional franchised restaurants | Domestic traditional franchised High | $20,421,000 | 12,212 | CY2025 | FDD p.42 |
| Lowest annual sales volume — domestic traditional franchised restaurants | Domestic traditional franchised Low | $1,063,000 | 12,212 | CY2025 | FDD p.42 |
| Share of domestic traditional franchised restaurants with 2025 sales above $3,000,000 Stated as approximately 81%. | Domestic traditional franchised % of units | 81% | 12,212 | CY2025 | FDD p.42 |
| Share of domestic traditional franchised restaurants with 2025 sales above $3,200,000 Stated as approximately 75%. | Domestic traditional franchised % of units | 75% | 12,212 | CY2025 | FDD p.42 |
| Share of domestic traditional franchised restaurants with 2025 sales above $3,400,000 Stated as approximately 67%. The comparable figure for all domestic traditional restaurants, franchised and company-operated together, is approximately 68%. | Domestic traditional franchised % of units | 67% | 12,212 | CY2025 | FDD p.42 |
| Annual sales volume — all domestic traditional restaurants open at least 1 year (franchised and McOpCo) Includes company-operated (McOpCo) restaurants, which averaged more than franchised restaurants. | All domestic traditional restaurants Average | $4,088,000 | 12,702 | CY2025 | FDD p.42 |
| Annual sales volume — all domestic traditional restaurants open at least 1 year (franchised and McOpCo) | All domestic traditional restaurants Median | $3,917,000 | 12,702 | CY2025 | FDD p.42 |
| Annual sales volume — domestic traditional McOpCo (company-operated) restaurants open at least 1 year Company-operated restaurants, not franchised outlets; recorded for comparison only. | Domestic traditional McOpCo (company-operated) Average | $4,871,000 | 490 | CY2025 | FDD p.42 |
| Annual sales volume — domestic traditional McOpCo (company-operated) restaurants open at least 1 year | Domestic traditional McOpCo (company-operated) Median | $4,812,000 | 490 | CY2025 | FDD p.42 |
Disclosed cost and profit figures
These figures are disclosed by the franchisor for the population stated in each row — often a subset (company-owned units, or franchisees who chose to report). They frequently exclude owner compensation, rent, debt service, taxes or royalties. They are not a prediction of your results.
| Metric | Subset | Value | Units | Period | Cite |
|---|---|---|---|---|---|
| Pro forma operating income before occupancy costs at $3,000,000 of product sales 24.4% of product sales. Excludes rent, royalty, depreciation and amortization, interest and income taxes. Cost of sales in this column is $858,000 (28.6%) and other operating expenses $1,408,000 (46.9%). | Independent franchisee traditional restaurants with product sales of $2,900,000 to $3,100,000 Other | $732,000 | 11,512 | CY2025 | FDD p.43 |
| Pro forma operating income before occupancy costs at $3,200,000 of product sales 24.8% of product sales. Cost of sales $910,000 (28.4%) and other operating expenses $1,497,000 (46.8%). | Independent franchisee traditional restaurants with product sales of $3,100,000 to $3,300,000 Other | $795,000 | 11,512 | CY2025 | FDD p.43 |
| Pro forma operating income before occupancy costs at $3,400,000 of product sales 25.4% of product sales. Cost of sales $967,000 (28.4%) and other operating expenses $1,566,000 (46.1%). | Independent franchisee traditional restaurants with product sales of $3,300,000 to $3,500,000 Other | $864,000 | 11,512 | CY2025 | FDD p.43 |
| Share of pro forma population with operating income before occupancy costs above $732,000 Stated as approximately 78%. | Independent franchisee traditional restaurants % of units | 78% | 11,512 | CY2025 | FDD p.43 |
| Share of pro forma population with operating income before occupancy costs above $795,000 Stated as approximately 72%. | Independent franchisee traditional restaurants % of units | 72% | 11,512 | CY2025 | FDD p.43 |
| Share of pro forma population with operating income before occupancy costs above $864,000 Stated as approximately 66%. Citation audit 2026-09-04: page corrected 43 -> 44 (value verified on p. 44). | Independent franchisee traditional restaurants % of units | 66% | 11,512 | CY2025 | FDD p.44 |
System health (Item 20)
Outlets, openings, exits and transfers by fiscal year · U.S. onlyView detailed Item 20 tables and source notes
| Fiscal year | Start | Opened | Terminated | Not renewed | Reacquired | Ceased — other | End | Transfers | Company-owned (end) |
|---|---|---|---|---|---|---|---|---|---|
| 2023 | 12,764 | 128 | 73 | 33 | 13 | 1 | 12,772 | 672 | 685 |
| 2024 | 12,772 | 167 | 29 | 15 | 8 | 0 | 12,887 | 843 | 672 |
| 2025 | 12,887 | 221 | 0 | 46 | 0 | 0 | 13,062 | 728 | 644 |
Disclosed 2026 Franchise Disclosure Document — McDonald's USA, LLC, Item 20, Tables 1–3 (PDF p. 45). Counts are U.S. only, broken out by state and by Guam, Guantanamo Bay and the Northern Mariana Islands. Tables 1 and 3 agree and both foot exactly for all three years. Table No. 4 (company-owned) foots for 2024 and 2025 but not for 2023, where 691 + 3 opened + 13 reacquired - 4 closed - 20 sold leaves 683 against a printed year-end total of 685; the discrepancy of 2 is not explained. Definitions matter here: Item 20 note 1 to Table No. 2 says 'spin' transactions, in which McDonald's buys a restaurant from one franchisee and immediately resells it to another without ever operating it, are counted as transfers and are excluded from 'reacquired by franchisor'. Note 1 to Table No. 3 says substantially all terminations are closings by mutual agreement during the term, and note 2 says substantially all non-renewals are closings by mutual agreement at the end of the term; because franchisees have no renewal right, an ordinary end-of-term resale to a qualified purchaser is not counted as a non-renewal. Note 4 says 'ceased operations - other' includes agreements terminated because the franchisee relocated the restaurant. Exhibit S lists 76 franchisees who left the system during the most recent fiscal year or who have not communicated with McDonald's within 10 weeks of the application date. Item 20 also states that some current and former franchisees have signed provisions restricting their ability to speak openly about their experience.
Source data notes (10) — inconsistencies found in the FDD itself during verification
Our verification re-reads every table. Where the FDD's own printed tables disagree, we document the discrepancy rather than silently "fixing" it. Classes: B = arithmetic error in the source's derived column; C = the printed tables genuinely disagree; D = a legitimate definitional difference (e.g., transfers netted, explained by a footnote); E = unresolved ambiguity. Figures a material C/E issue puts in doubt are excluded from our derived metrics, scores and rankings.
- [C/minor] Table No. 3 2023: p.51 TOTAL row prints Outlets Opened 128, Terminations 73 and Non-Renewals 33, but the 54 jurisdiction rows sum to 130, 74 and 34. Start (12,764), Reacquired (13), Ceased Other (1) and End (12,772) all agree. Raised by Pass B; re-verified by re-summing every state row. — Printed TOTAL: 'Total Outlets 2023 12,764 128 73 33 13 1 12,772'. State-row sums: 12,764 / 130 / 74 / 34 / 13 / 1 / 12,772. The printed tables genuinely disagree, but the errors are net-neutral (+2 openings offset by +1 termination and +1 non-renewal) so both readings foot to the printed 12,772 end-of-year, which Table 1 corroborates. 2 units on 12,764 start-of-year franchised outlets is 0.016%, far below 0.5%. Keep the printed TOTAL row figures; flag openings and exits for 2023 as +/-2.
- [C/minor] Table No. 4 2023: p.53 TOTAL row does not foot on its own figures: 691 start + 3 opened + 13 reacquired - 4 closed - 20 sold = 683, but 685 is printed as outlets at end. The 22 state rows sum to 7 opened and 6 closed, which foots exactly to 685. Raised independently by both Pass A and Pass B; re-verified. — Printed TOTAL: 'Total Outlets 2023 691 3 13 4 20 685'. State-row sums: 691 / 7 / 13 / 6 / 20 / 685. The printed opened and closed totals understate the state rows by 4 and 2. Start 691 and end 685 are corroborated by Table 1 (company-owned 691 -> 685, net -6), so the totals the site uses are not in doubt; only the company-owned opened and closed columns are. Use 7 opened and 6 closed for FY2023 company-owned. FY2024 and FY2025 TOTAL rows both foot and match their state sums.
- [A/minor] Table No. 3 / Table No. 4 2025: Pass B reported that Table 3 shows 0 franchised outlets 'Reacquired by Franchisor' in 2025 while Table 4 shows 16 'Reacquired From Franchisee', an unreconciled mismatch. — Extraction error, not a source problem: Pass B read the wrong Table 4 column. The printed p.53 row is 'Total Outlets 2025 672 16 0 9 35 644' against the header Outlets at Start / Outlets Opened / Reacquired From Franchisee / Outlets Closed / Outlets Sold to Franchisee / Outlets at End -- so 16 is Outlets Opened and Reacquired From Franchisee is 0, which matches Table 3's 0. The columns also agree in 2023 (13 and 13) and 2024 (8 and 8). No discrepancy exists.
- [D/minor] Table No. 3: Footnote (2) excludes from Non-Renewals the case where McDonald's declines to grant a new term but the franchisee sells during the remaining term to a qualified purchaser who signs a new-term Franchise Agreement. Raised by both passes. — A footnote explains the definition, so the table is internally correct. Because Item 17(b) gives franchisees no renewal right at all, end-of-term turnover is systematically routed into Table 2 transfers rather than Table 3 non-renewals. Disclosed Non-Renewals therefore understate the number of restaurants that did not continue with their original franchisee, and Table 2 transfers correspondingly overstate voluntary sales. Present the two together rather than adjusting either.
- [D/minor] Table No. 3: Footnote (4) states 'Ceased Operations - Other Reasons' includes Franchise Agreements mutually terminated because the franchisee relocated to a new site, for which a new agreement is signed. Raised by both passes. — A footnote explains it, so it is a definitional difference rather than an error: some entries in the exit columns are not exits from the system. Immaterial in practice here -- Ceased Other is 1 in 2023 and 0 in 2024 and 2025.
- [D/minor] Table No. 2: Footnote (1) states transfers include 'spin' transactions in which McDonald's or an affiliate acquired a restaurant from one franchisee and immediately resold it to another without ever operating it, so the totals are not purely franchisee-to-franchisee. Raised by both passes, with Pass B also confirming the table foots. — Re-verified: state rows sum exactly to the printed totals of 672 (2023), 843 (2024) and 728 (2025) on p.48, so there is no arithmetic issue. The spin inclusion is a disclosed definitional choice that inflates the transfer count relative to a pure franchisee-to-franchisee measure; 2025 transfers are 728 on 12,887 start-of-year franchised outlets, about 5.6%. Label the metric as including spins.
- [D/minor] Table No. 3 2025: Table 3 shows 0 Terminations in all 54 jurisdictions in 2025 (against 73 in 2023 and 29 in 2024) and 0 Ceased Operations - Other, leaving 46 Non-Renewals as the only recorded franchised exits, while Exhibit S is described on p.54 as a list of 76 franchisees. Raised by Pass B. — The two counts are not comparable, so there is no table defect. Exhibit S counts franchisees, not restaurants, and its criteria are broader: 'a list of the 76 franchisees who had a restaurant franchise terminated, canceled, not renewed, or otherwise voluntarily or involuntarily ceased to do business ... or who have not communicated with us within 10 weeks of the application date'. The 2025 Table 3 TOTAL row foots on its own figures and matches its state sums (12,887 + 221 - 46 = 13,062), and 13,062 is corroborated by Table 1, so the totals the site uses are sound. The zero-termination pattern itself cannot be corroborated from the document; note it rather than adjust it.
- [D/minor] Table No. 1: Pass B observed that carry-forward is clean: Table 1 franchised 12,764 -> 12,772 -> 12,887 -> 13,062 and company-owned 691 -> 685 -> 672 -> 644 chain year to year, agree with the Table 3 and Table 4 start and end figures, and Total Outlets equals franchised plus company-owned in every year. — Re-verified on p.45 and against the Table 3 (p.51) and Table 4 (p.53) TOTAL rows: no discrepancy. This is what makes the two 2023 footing defects above minor rather than material -- every start and end total is independently corroborated.
- [D/minor] Table No. 5: Pass B observed that Table 5 foots to 231 projected new franchised outlets and 9 projected new company-owned outlets, and that 'Franchise Agreement Signed But Outlet Not Opened' is 0 in every state. — Re-verified: the 54 state rows sum to 0 / 231 / 9, matching the printed total exactly (pp.53-54). The all-zero signed-but-not-opened column is a definitional consequence of McDonald's model, in which McDonald's develops the site and the Franchise Agreement is signed at or near opening, not a missing disclosure.
- [D/minor] Item 20 scope: Pass B observed that Item 20 covers U.S. outlets only, plus Guam, Guantanamo Bay and the Northern Mariana Islands, with no separate international table. — Re-verified: Tables 2, 3 and 5 each carry 54 jurisdiction rows (50 states, the District of Columbia, Guam, Guantanamo Bay and the Northern Mariana Islands), so no U.S./international split question arises and no rows are missing. Every unit count derived from Item 20 is U.S.-only and must not be compared with McDonald's global system size.
Company-owned outlets (Table 4)
| Year | Start | Opened | Reacquired from franchisee | Closed | Sold to franchisee | End |
|---|---|---|---|---|---|---|
| 2023 | 691 | 3 | 13 | 4 | 20 | 685 |
| 2024 | 685 | 14 | 8 | 3 | 32 | 672 |
| 2025 | 672 | 16 | 0 | 9 | 35 | 644 |
Read: How to read Item 20.
Ownership and operations
Items 11, 12, 15, 17Owner-operator required Disclosed
- Source
- 2026 Franchise Disclosure Document — McDonald's USA, LLC
- Document
- FDD 2026, issued 2026-05-01, amended 2026-07-01
- Item
- Item 15
- Page
- PDF p. 39
- Obtained
- Wisconsin Department of Financial Institutions — Franchise Registration Search, file 640986
full time and best efforts to, and personal on-premises supervision of, the day-to-day operation
Item 15 is a single paragraph requiring the franchisee to give full time and best efforts to, and personal on-premises supervision of, the day-to-day operation of the restaurant, under paragraphs 1(e) and 13 of the Franchise Agreement. No manager substitution or absentee arrangement is offered.
View operating requirements, territory and contract term
| Owner involvement (Item 15) | Owner-operator required Disclosed
Item 15 is a single paragraph requiring the franchisee to give full time and best efforts to, and personal on-premises supervision of, the day-to-day operation of the restaurant, under paragraphs 1(e) and 13 of the Franchise Agreement. No manager substitution or absentee arrangement is offered. Item 15 is a single paragraph requiring the franchisee to give full time and best efforts to, and personal on-premises supervision of, the day-to-day operation of the restaurant, under paragraphs 1(e) and 13 of the Franchise Agreement. No manager substitution or absentee arrangement is offered. |
|---|---|
| Initial training | Initial training is the Candidate Development Program, which must be completed before the franchisee signs the Franchise Agreement or pays any money. It is delivered online through the Campus and Fred platforms with an assigned coach, plus instructor-led classes and in-restaurant work in which the candidate must perform and master every crew and management function. Item 11 says completing all learning plans can take 6 months to two years. The published table lists a Restaurant Learning Path of roughly 328 on-the-job hours (Crew Development 83, Area Management 60, Shift Leader 59, Department Leader 94, Restaurant Leader 31.75) plus classroom components including 8 hours of ServSafe food safety, a 24-hour Developing the Leader in Me class and a 32-hour, four-day Leading Great Restaurants class held in person at Hamburger University in Chicago, and a Business Learning Path of a further 178.5 classroom hours. Candidates are not paid or employed during training. McDonald's bears the cost of the training centers but the franchisee pays travel, living and compensation costs. Existing franchisees need not repeat the curriculum to acquire an additional restaurant. Disclosed
Hour totals are sums of the individual rows printed in the Item 11 training program table; the table gives no printed totals and Item 11 says the time required varies by individual. |
| Multi-unit / development options | No multi-unit or area development agreement is offered. Item 17 note 3 states that the franchisee has no right to acquire additional franchises and refers anyone seeking more restaurants to McDonald's Growth Policy at Exhibit L, which is a policy rather than a contract right. Item 5 notes that existing franchisees are not required to repeat the training curriculum to acquire an additional restaurant, and Item 3 and Item 20 show that many franchisees operate several restaurants. Disclosed
|
| Territory (Item 12) | There is no territory. Item 12 states the franchise is a limited grant of authority to use the McDonald's System at one specific address, with no exclusive area, protected territory or right to control or impose conditions on where McDonald's develops future restaurants. The franchisee may face competition from other franchisees, from company-operated restaurants and from other channels of distribution, and McDonald's reserves the right to sell under the marks through other channels, giving McCafe packaged coffee in supermarkets and e-commerce as an example. Disclosed
|
| Initial term | 20 years Disclosed
Traditional restaurants are generally 20 years. Small town oil and small town retail terms are generally 10 years, a Business Facilities Lease term is generally 3 years with a conditional option to extend up to 20 years, and Satellite terms vary with the location. Where McDonald's real estate tenure or the agreed term is 10 years or less, Item 5 prorates the initial franchise fee. |
| Renewal | There is no renewal right. Item 17 rows b and c state the franchisee has no right to renew or extend the term. McDonald's may, at its sole discretion, offer a new term franchise under its New Term Policy (Exhibit K), which is expressly not part of the Franchise Agreement, is subject to change, and is not a contract right. Item 6 note 3 says that where a new term franchise is offered, percentage rent will not be lower than in the previous term and may be raised to 8.50% if it was below that level. Item 20 note 2 adds that where no new term is granted, the franchisee may sell the franchise during the remaining term and a qualified purchaser may sign a new term agreement when it ends. Disclosed
|
Risk and legal observations
Items 3, 4, 8, 15, 17 — summarized neutrallyLitigation: 25 matter(s) disclosed Disclosed · Bankruptcy: None disclosed Disclosed
View legal disclosures, restrictions and guarantees
| Litigation (Item 3) | 25 matter(s) disclosed Disclosed Item 3 lists 4 pending matters and 21 concluded matters. Two of the pending matters were brought by franchisees: a group action originally filed in 2020 by 77 former franchisees alleging race discrimination against Black franchisees, now proceeding as related King, Manning and McPherson complaints with motions to dismiss partly decided and partly pending; and a 2024 suit by a franchisee alleging he was targeted because he is Hispanic, in which McDonald's counterclaimed for a declaration that he breached his franchise agreements. The other two pending matters are consumer class actions over an E. coli outbreak linked to Quarter Pounders and over McRib marketing. Item 3 also states, without listing individual cases, that McDonald's and its predecessor have been named in numerous labor and employment suits by franchisee employees alleging joint employment. Of the 21 concluded matters, 7 were brought by franchisees or their estates, several of which McDonald's settled by buying the plaintiffs' restaurants — examples include $22,000,000 for six franchises, $33,500,000 for thirteen, $15,600,000 for eight and $6,500,000 for four. Others were consumer, employee, antitrust, intellectual property and supplier disputes, including two no-poach wage cases settled in January 2026 for $12,500,000 each and a $19,000,000 settlement with Kytch, Inc. One concluded matter was an SEC administrative settlement with McDonald's Corporation over proxy disclosures relating to a former CEO's separation, resolved with no monetary penalty. |
|---|---|
| Bankruptcy (Item 4) | None disclosed Disclosed Item 4 states that no bankruptcy is required to be disclosed. |
| Personal guaranty | Not disclosed in the reviewed source Not disclosedNot disclosed in the reviewed source. We did not find this value in 2026 Franchise Disclosure Document — McDonald's USA, LLC; we do not fill gaps with estimates or third-party figures. No personal guaranty of the Franchise Agreement itself is disclosed in Items 15, 17 or 22. Related obligations are disclosed elsewhere: Item 17 makes a transferring franchisee remain personally liable for the remainder of the term, and Item 10 states that a personal guarantee from the franchisee and his or her spouse is required for the optional Bank of America loan program guaranteed by McDonald's Corporation. |
| Non-compete | During the term, Section 11 of the Franchise Agreement bars any involvement in a competing or similar business, subject to applicable state law. After termination or expiry, including after an assignment or sale, the franchisee may not operate a competing business for 18 months within 10 miles, again subject to state law. Disclosed
|
| Transfer restrictions | Transfer is defined broadly to include any direct, indirect or contingent transfer of any interest in the franchise, in whole or in part. McDonald's approval is required. Conditions include that the new franchisee qualifies, that the royalty increases to the then-current rate except in the situations listed in Item 6, that the new franchisee assumes full and unconditional liability, that the outgoing franchisee remains personally liable for the remainder of the term, and that there is no current breach. McDonald's holds a right of first refusal allowing it to match any offer for the business, and Item 3 shows it has exercised that right. On death or disability the franchise may be assigned to an approved purchaser, spouse, heir or nearest blood relative who qualifies; McDonald's may buy the business only if it has managed the restaurant for a year after death or disability. Disclosed
|
| Termination / non-renewal | The Franchise Agreement gives the franchisee no right to terminate and gives McDonald's no right to terminate without cause. McDonald's may terminate if the franchisee commits any one of a list of material breaches or repeatedly breaches the agreement; Item 17 classifies all of them as non-curable and lists no cure period. The listed breaches include failure to keep the restaurant clean and to standard, bankruptcy, any amount owing to McDonald's unpaid for 30 days, an outstanding judgment over $5,000 for more than 30 days, loss of possession of the restaurant, unapproved food sales, transfer without consent, denial of access, misrepresentation, conduct damaging McDonald's reputation, a felony conviction and intentional under-reporting of Gross Sales. On termination or expiry, at McDonald's request and for 30 days, the franchisee must sell it the furniture, fixtures, signs and equipment at fair market value with no payment for intangible assets, return the manuals and stop using the system and marks. The separate Operator's Lease gives a 10-day cure period for most covenants but treats failure to pay rent, failure to submit reports, failure to comply with the Franchise Agreement, abandonment and bankruptcy as non-curable, and requires rent to continue on termination. Disclosed
|
| Supplier restrictions (Item 8) | McDonald's generally does not sell goods to franchisees and states that neither it nor its affiliates derive revenue from franchisee purchases from approved suppliers, but the franchisee must deal only with suppliers and agencies McDonald's approves, and food specifications are not generally issued to franchisees. Approval of a new supplier is at McDonald's sole judgment and may be refused simply because it considers the existing supplier base sufficient. Item 8 discloses that required purchases represent roughly 90% to 95% of total purchases in establishing the restaurant and roughly 55% to 65% of overall purchases in operating it. The franchisee must lease the restaurant premises from McDonald's under the Operator's Lease and pay rent plus property taxes, insurance, maintenance and structural repairs; McDonald's states it derives revenue from this leasing arrangement. New restaurants must use the standard Technology Platform, with all hardware, software and network services bought or leased from approved suppliers, and the Sesame POS software is owned by McDonald's Corporation. In 2025 McDonald's and its predecessor received $34,427,329 in loan guarantee service fees, cashless incentives and beverage supplier rebates, and of about $10.83 billion of total revenue, about $7.37 billion (68%) came from the sale or lease of real estate and services to franchisees. Disclosed
|
| Dispute resolution | Item 17 marks dispute resolution by arbitration or mediation and choice of forum as Not Applicable, and states that the Franchise Agreement and Operator's Lease are governed by Illinois law with exceptions stated in the agreement. The cover pages carry a state-required special risk notice saying the franchise agreement requires disputes to be resolved by mediation, arbitration and/or litigation only in Illinois, which may cost more than proceeding in the franchisee's own state. Item 3 adds that McDonald's often agrees to mediation as a matter of practice, through an open door policy and a formal Ombudsman process, but that this is not required by the Franchise Agreement. Disclosed
|
- The franchisee does not own or control the site: McDonald's acquires the real estate and building and the franchisee leases from McDonald's under an Operator's Lease built into the franchise agreement, so rent is both a major operating cost and a payment to the franchisor.
- Percentage rent for new and relocated traditional restaurants is generally 6% to 23% of Gross Sales, generally rises over the first seven years, and is generally at least 11.50% from the eighth year; Item 19 reports effective rent for franchised restaurants in 2025 ranged from 0.00% to 33.37% of sales.
- No exclusive territory or protected area of any kind is granted, and McDonald's expressly reserves the right to open restaurants that may alter trading patterns and compete with the franchisee's location.
- No right to renew or extend the term; whether a new term is offered is at McDonald's sole discretion under a policy that is not a contract right.
- Item 15 requires the owner to devote full time and personal on-premises supervision to one restaurant; no manager-run or semi-absentee option is disclosed.
- Item 19's profit figures stop at operating income before occupancy costs, excluding the rent that the franchisee must pay McDonald's, and Item 19 declines to state average occupancy costs.
- Item 7 note 11 states that of 35 McOpCo restaurant sales in 2025, 9 exceeded the high end of the Item 7 investment range, by $53,000 up to $1,500,000.
- Item 20 notes that some current and former franchisees have signed provisions restricting their ability to speak openly about their experience with McDonald's.
- Item 3 discloses pending and settled discrimination claims brought by current and former franchisees, and states that McDonald's is named in numerous labor suits by franchisee employees alleging it is a joint employer.
Summaries are neutral paraphrases of the cited document and are not legal advice. Read the full Items in the current FDD and consult a franchise attorney.
Illustrative unit economics
Model estimateModel estimate — not disclosed by the franchisor, not a forecast. Fee lines below come from this brand's verified FDD fee schedule and are computed exactly as disclosed (each line shows its arithmetic). Operating-cost ratios are category placeholders we chose — every one is editable and labeled assumption. Results are illustrative arithmetic, not expected returns. Every figure here belongs to one of five labeled categories — disclosed inputs, model assumptions, unmodeled mandatory fees, user-editable assumptions, and exclusions — defined in our methodology. This brand's Item 19 also discloses some cost or profit data — see the Item 19 section, which takes precedence over any assumption here.
| Line (annual) | Downside | Base | Upside |
|---|---|---|---|
| Revenue (AUV basis) | $3,245,600 | $4,057,000 | $4,665,550 |
| − Cost of goods / supplies assumption | $1,006,136 | $1,257,670 | $1,446,321 |
| − Payroll (excl. owner) assumption | $908,768 | $1,135,960 | $1,306,354 |
| − Occupancy assumption | $259,648 | $324,560 | $373,244 |
| − Other operating expenses assumption | $357,016 | $446,270 | $513,211 |
| − Royalty disclosed 4% of gross sales = $162,280 |
$129,824 | $162,280 | $186,622 |
| − Advertising and Promotion disclosed 4% of gross sales = $162,280 |
$129,824 | $162,280 | $186,622 |
| − Satellite Annual Fee disclosed $500 per year |
$500 | $500 | $500 |
| − Sesame POS Annual Fee disclosed $1,133 per year |
$1,133 | $1,133 | $1,133 |
| − Global Mobile App / Digital Capabilities Fee disclosed $664 per year |
$664 | $664 | $664 |
| − McDelivery POS Integration disclosed $620 per year |
$620 | $620 | $620 |
| − Self-Ordering Kiosk software maintenance disclosed $558 per year |
$558 | $558 | $558 |
| − Back Office Integration and Enhancements disclosed $545 per year |
$545 | $545 | $545 |
| − Payments and Fraud Management disclosed $740 per year |
$740 | $740 | $740 |
| − Employee Engagement Platforms disclosed $385 per year |
$385 | $385 | $385 |
| − Deployment, OTP, Execution and Support Fee disclosed $2,866 per year |
$2,866 | $2,866 | $2,866 |
| − Restaurant Network Management, Access and Security Fee disclosed $1,134 per year |
$1,134 | $1,134 | $1,134 |
| − Restaurant Hardware, Data Movement, Management, and Monitoring Fee disclosed $951 per year |
$951 | $951 | $951 |
| − Restaurant File Maintenance (RFM) Fee disclosed $690 per year |
$690 | $690 | $690 |
| − Microsoft License Subscription Fee disclosed $707 per year |
$707 | $707 | $707 |
| − GRNT (Restaurant Network Transformation) Annual Fee disclosed $185 per year |
$185 | $185 | $185 |
| − Edge computing annual fee disclosed $5,220 per year |
$5,220 | $5,220 | $5,220 |
| − Store Mail (email accounts) Fee disclosed $56 per year |
$56 | $56 | $56 |
| = Modeled operating result before the items below (EBITDA-style) | $437,430 | $551,026 | $636,223 |
| − Manager compensation assumption | $60,000 | $60,000 | $60,000 |
| = Modeled result after manager compensation | $377,430 | $491,026 | $576,223 |
| − Illustrative debt service assumption | $242,502 | $242,502 | $242,502 |
| = Illustrative pre-tax cash flow — before taxes, capital expenditures and unmodeled fees | $134,927 | $248,523 | $333,720 |
| Modeled operating margin | 13.5% | 13.6% | 13.6% |
This modeled result is not owner income. It excludes: income taxes; capital expenditures and equipment-replacement reserves; working-capital needs; ramp-up losses; owner-specific costs; one-time and per-event fees (transfer, renewal, audit); and 3 mandatory fee(s) whose amounts the FDD does not state (listed below — real outflows are higher by these amounts). It is illustrative arithmetic on stated assumptions, not a promise or forecast of what a franchisee earns.
Mandatory fees disclosed but not quantified — not included in the modeled result: the FDD requires these but states no amount (e.g. billed at "then-current" rates). They are never modeled as $0. If you have a quote or estimate, enter an annual amount to include it as your own assumption:
- Monthly Base Rent (traditional restaurants) (Item 6, p. 21) — Item 7 shows Base Rent ranging $0 to $310,000 (3-month estimate) for traditional restaurants.
- Satellite Rent (non-MIW) (Item 6, p. 23) — amount not stated in the FDD (e.g. “then-current fee”)
- BFL Rent (Item 6, p. 23) — amount not stated in the FDD (e.g. “then-current fee”)
Counted inside the operating-cost assumptions, not as separate fees:
- Percentage Rent (new and relocated traditional restaurants) (Item 6, p. 21): 6% of revenue (your assumption; FDD requires at least 6% — Applies to new and relocated traditional restaurants opening on or after January 14, 2026. The site-specific rate is disclosed before signing, generally rises during the first seven years, and the total change over the term generally will not exceed 3.50 percentage points unless a larger increase is needed to reach the 11.50% floor.) = $243,420 — this is occupancy paid to the franchisor, covered by the occupancy % assumption; make sure that assumption is at least this large
- eProduction (Item 6, p. 19): $47 per year — this is a required purchase that is cost of goods, covered by the COGS % assumption; make sure that assumption is at least this large
Overlap control: OPNAD National Advertising Fund Contribution is counted within “ad-and-promotion” — excluded to avoid double counting.
Every figure in this table is a model estimate built on the disclosed fee schedule plus labeled assumptions. Excluded: income taxes, owner draw, working-capital swings, capital expenditures, ramp-up losses in year one, one-time and per-event fees (transfer, renewal, audit), and the undisclosed-amount fees listed above. Read AUV vs. EBITDA vs. owner income before using this.
Sources and provenance
Primary source: 2026 Franchise Disclosure Document — McDonald's USA, LLC · issued 2026-05-01 · amended 2026-07-01. Find the FDD at Wisconsin Department of Financial Institutions — Franchise Registration Search. We cite source pages and do not redistribute PDFs.
View all sources, provenance and verification notes
| Document | Obtained from | Dates | Status |
|---|---|---|---|
| 2026 Franchise Disclosure Document — McDonald's USA, LLC Registry file 640986 · 407 pages Cover page reads 'Issuance Date: May 1, 2026, as amended July 1, 2026'. Wisconsin registration status is Registered with an effective date of 4/15/2026, which precedes the stated issuance date; this is the newest document available in the registry and is treated as current. | Wisconsin Department of Financial Institutions — Franchise Registration Search | Issued 2026-05-01; amended 2026-07-01 Retrieved 2026-08-29 | Newest available at retrieval |
AI-assisted extraction from the archived FDD text, independently machine-verified against the cited source (two passes plus tie-break); not human-reviewed. Extracted 2026-08-29. Last updated 2026-09-05. AI-assisted extraction independently machine-verified against the cited source document (2026-09-01): two independent AI reading passes plus tie-break re-inspection of every disagreement; 72 of 77 material fields confirmed (43 with the exact page citation re-confirmed), 2 corrected, 0 unresolved, 5 confirmed not disclosed. No human has reviewed this profile. Fiscal year covered: FY2025 (Dec 31, 2025). See how we use AI and verify data.
Fields flagged as uncertain (8)
- fees.technology.value
- fees.royalty.value
- risk.litigation.count
- risk.litigation.franchisee_initiated_count
- risk.personal_guaranty.value
- item19.population_share_of_system
- item20.company_owned_status[0]
- investment.alternative_formats[1].franchise_fee
Extraction notes (17)
- fees.technology is the only derived value in this record. Item 6 does not state a single technology fee; it lists 21 recurring annual technology charges, 5 of which it marks optional, plus 6 one-time charges. The recorded figure of $16,501.44 is the sum of the 16 non-optional annual charges, with the formula and components in the note. Every component is also listed individually in fees.other_recurring, and the one-time charges are listed in fees.notes. Two components (GRNT and Edge) are described as charged 'once deployed', so a particular restaurant may pay less.
- fees.royalty is recorded as 4% with range_high 5% because Item 6 prints the rate as '5% or 4% of Gross Sales, depending on the circumstances'. A prospective franchisee opening a new restaurant will pay 5%; the 4% rate applies to specified existing-restaurant transactions. The note states this.
- investment.franchise_fee_low and franchise_fee_high are both $45,000, the standard traditional fee. The $22,500 STO/STR fee and the $0 to $500 Satellite fee belong to different formats and are recorded in alternative_formats; alternative_formats has no note field, so the Satellite entry carries $500 (the fee for a non-Walmart Satellite) and the $0 Walmart case is explained in the franchise_fee_low note.
- Every column of the Item 7 table foots exactly: traditional line items sum to $1,472,000 and $2,807,000, STO/STR to $1,015,500 and $1,864,500, and Satellite to $701,000 and $1,411,500.
- investment.includes_real_estate_purchase is false. Item 7 note 5 states McDonald's acquires the real estate and building and franchises the right to operate at the location, so the table carries only three months of base rent and no land or building purchase. Item 7 note 11 also confirms the totals exclude percentage rent and royalty.
- No minimum liquid capital or net worth figure appears anywhere in the cover pages or Items 1, 5, 6, 7, 11 or 15; both fields are recorded as not disclosed. Item 6 note 8 mentions net worth and liquidity only as factors in deciding whether to offer a Business Facilities Lease franchise.
- risk.litigation.count of 25 is our count of the separately captioned matters in Item 3: 4 pending and 21 concluded. The lead pending matter is counted once although it spans three related case numbers (King, Manning and McPherson) and originally involved 77 former franchisees. Item 3 also refers generically to numerous unnamed labor and employment suits by franchisee employees, which are not included in the count. franchisee_initiated_count of 9 is our classification from the case descriptions: 2 pending and 7 concluded matters brought by franchisees, former franchisees or a franchisee's estate. franchisor_initiated_count is 0; McDonald's filed a counterclaim in one pending franchisee case but initiated no listed action.
- risk.personal_guaranty is recorded as not disclosed because no guaranty of the Franchise Agreement appears in Items 15, 17 or 22. The franchise is granted to an individual who must personally operate the restaurant, a transferring franchisee remains personally liable for the remainder of the term (Item 17), and a personal guarantee from the franchisee and spouse is required only under the optional Bank of America financing program described in Item 10.
- item19.population_share_of_system of 93.5 is our arithmetic: the 12,212 domestic traditional franchised restaurants in the Item 19 table divided by the 13,062 franchised outlets at December 31, 2025 in Item 20 Table No. 1. The two figures sit on different bases, since the Item 20 count also includes Satellite, small town oil and small town retail outlets and outlets open less than a year.
- Item 20 Table No. 4 (company-owned outlets) does not foot for 2023: 691 + 3 + 13 - 4 - 20 = 683 against a printed year-end total of 685. The 2024 and 2025 rows foot exactly, and Tables 1, 2, 3 and 5 all foot and agree with each other. The 2023 row is recorded exactly as printed.
- Item 20 counts are U.S. only, including Guam, Guantanamo Bay and the Northern Mariana Islands. Company-owned outlets are restaurants franchised to McOpCo companies, McDonald's own wholly-owned subsidiaries; Item 1 says about 95% of U.S. restaurants are franchised to independent franchisees and about 5% to McOpCo companies.
- franchisor.business_since and franchising_since are both 1955, the year Item 1 says McDonald's Corporation began granting franchises to individuals. The franchisor entity McDonald's USA, LLC was formed in 2004 and received the U.S. business in 2005.
- The document is dated May 1, 2026 as amended July 1, 2026, while the Wisconsin registration effective date recorded in the registry is 4/15/2026. It is the newest document available and is treated as current.
- The Item 19 McOpCo low sales figure is printed in the source as '$$2,012,000'; it is recorded here only in the caveats, not as a metric.
- Item 23 (receipts), Item 21's financial statements in Exhibit A, and the exhibits were not parsed in detail. Items 2, 13, 14 and 16 were not reviewed because no field depends on them.
- Verification 2026-09-01: correct /fees/ad_fund {'value': 4, 'unit': 'pct_gross_sales', 'range_high': None} → None
- Verification 2026-09-01: correct /fees/local_marketing None → {'value': 4, 'unit': 'pct_gross_sales', 'range_high': None}
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