McDonald’s Franchise: Everything You Need To Know About It

McDonald’s is one of the most famous fast-food chains with numerous branches worldwide. People who have invested in McDonald’s franchise have gained immense profits from it.

Now you have the power to unlock the best profit margin with the help of this brand – which is why we would like you to know about the intricate details.

You can discover how good of a business person you can be and how it can be impactful to you. You can even turn the McDonald’s franchise into a family business, and make it beneficial for your friends and family. 

When you run the McDonald’s franchise, you are completely independent to take your own decisions and get the optimum guidance and support from the entire system of McDonald’. 

A Brief Overview

Here are some of the reasons why you should think about investing in the McDonald’s franchise business. 

A Well Connected Community

The McDonald family knows that connections are important- which is why they always try to go for optimum value addition.

The McDonald’s Franchise that is investing is not only buying a store but also getting an insight about the neighbourhoods, employees as well as other events about their surroundings.

When you do not have to build something from scratch, it is always better to have a well-connected team so that the first few days of your business are completely hassle-free- not to forget streamlines operation. 

Global Brand Recognition

You already know about the reputation of mcd, which is why you do not have to think about the potential customers flocking in as soon as the restaurant is running.

Also since it is a known brand, therefore you can also find new customers who would want a fast food chain in their community. It will be responsible for giving the customers a very satisfactory experience and customer loyalty is something that you can be sure of. 

The Franchise System of MCDd is Inclusive.

The main vision and mission of McDonald’s is to have as many McDonald’s Franchise as possible and it has been able to grow so much because of its inclusive nature.

No matter the location, the people and the situation, McDonald’s will always have a franchisor offer for investors belonging to different backgrounds and a huge range of demographics as well. 

It Is Not Just A Restaurant

If you want to be a good entrepreneur, you should know that money is not everything. You should also think about the reputation that you will be getting when you associate yourself with mcd. You can participate in numerous programs that are designed to help the needy.

Starting from serving hot meals to hungry individuals to giving out school bags to those who can afford them, you will be responsible for all those smiles. And that is something which you can never put a price on. 

Why McDonald’s?

McDonald’s is one of the top fast-food chains in India, and its popularity shows no signs of waning. People of all ages enjoy its wide variety of offerings.

The extensive and delicious menu is a major factor behind their success, but the fast and efficient service is what truly sets them apart.

As a result, many entrepreneurs are eager to invest in this globally recognized brand, and now could be your chance to join them! With an estimated valuation of around $240 billion, McDonald’s represents an incredibly lucrative business opportunity.

Let’s take a closer look at the McDonald’s franchise in India and explore how it could be a profitable venture for you!

History of McDonald’s

The restaurant which was no larger than the barbeque stand is now a legacy in the world of fast food chains.

The company started about 60 years ago and has never looked back since then. In the year 1948, two brothers, Richard and Maurice McDonald’s started a small drive-thru stand and later progressed to a burger and milkshake joint. The food was good, and therefore people started flocking in and around California. 

The main reason for their popularity was the popular menu items like french fries and burgers but at half the price as compared to other big brands.

Once the joint was up and about, they started installing self-service counters so that people would not have to depend on the waiters to get their food.

They already prepared the orders even before they were paid for and the food was kept under heat lamps so that the food would not get cold.

Therefore, by the time the customers paid, the food was ready for collection and there was no space of time wastage. 

But even after their huge popularity, it was not until 1994 that the McDonald’s brothers expanded their fast food chain and set out their McDonald’s Franchise model. 

McDonald’s In India

Initially, an American Chain, the first restaurant they opened in India was in the year 1996 in Mumbai and right now, it has more than 170 outlets and the count is yet to double by 2027.

The most interesting fact about McDonald’s India is that the menu is catered to the Indian taste buds.

For example, you can find quite some spicy items and even the burgers have been changed according to the variety of taste specifications of Indians. 

Also read: Ferns N Petals Franchise: Cost, Profit Margin, and How to Apply for This

Reasons Why Choosing McDonald’s Is A Smart Move

• McDonald’s stands as the largest chain of Quick-Service Restaurants globally, renowned for its widespread recognition and strong presence in markets around the world.
• As a franchisee, you receive continuous support throughout your operations, including assistance at later stages if needed. The brand is backed by award-winning marketing campaigns and effective advertising strategies.
• McDonald’s operates on a proven and successful business model, offering franchisees the opportunity to leverage the trademarks and operational systems of one of the leading names in the industry.
• The company provides both local and national support, ensuring that franchisees have everything they need at each stage. In addition, you will receive comprehensive, top-tier training and benefit from responsive, collaborative business support from field offices.
• McDonald’s also boasts a robust supply chain network, ensuring that restaurants are supplied with high-quality products at competitive prices.

Benefits Of Joining McDonalds franchise

• Global Recognition: McDonald’s holds the title of the world’s largest Quick-Service Restaurant (QSR) chain.
• Ongoing Support: McDonald’s provides extensive assistance throughout the entire franchise operation.
• Proven Business Model: The business model utilized by McDonald’s has been highly successful.
• Operational System and Branding: Franchisees benefit from using McDonald’s established operating system and brand trademarks.
• Training: Franchise owners and their staff receive thorough, high-quality training.
  Supply Chain: Franchisees gain access to an excellent network of suppliers for top-quality products.

Kind Of Franchise Outlets You Can Invest in

When you dive deep into the franchise model of mcd, you shall know that there are 4 different kinds of franchise restaurants and those are as follows. 

1. STO/STR locations

This stands for small town oil or small town retail location where the restaurant is set up in not so large of an area.

In this case, the STR is located near the departmental stores or even in the mall premises. On the other hand, STO’s location is near the highways or petrol pumps where people can take a break while driving.

Both these locations have their essence and you can expect the entire range of menu with a considerable dining space. 

2. BFL Franchise

It stands for Business franchise lease which is taken by corporate offices so that the restaurant can be set up in the office premises.

Therefore McDonald’swill be serving as a canteen to the employees. At first, the lease is provided for 3 years but if the operation is streamlined, then the contract can be extended as well. 

3. Traditional Franchise

This is the type of franchise that you can commonly see in the malls, around the residential buildings, as well as food courts.

In some cases, there are even part areas along with the dining space. Mostly, this type of franchise is given for a long tenure- mostly 20 years. For this kind of franchise, the approximate fee is about 30 lakhs in total. 

4. Satellite Location

This is an interesting franchise in which the menu is limited and it is situated mostly outside schools and universities as well as airports. Mostly there is no dine-in facility and you can only grab and go.

The franchise terms and conditions will vary on the location and the size of the store you would want to set up. You can get such a store for 15lakhs approximately. 

The fees that we have mentioned are just the McDonald’s Franchise agreement cost and you can expect about 6-15 crores in Indian Currency for other miscellaneous expenses like store layout, maintenance, resources, training and so on. 

McDonald’s Franchise Costing Details

Here is everything that you need to know about the cost of owning an McDonald’sfranchise in India

1. Franchise cost – 25 to 30 lakhs
2. Civil work cost – 10 lakhs
3. Furniture costs – 11 lakh 
4. Development cost-30 lakhs
5. Machinery cost– 35 lakh
6. Interior cost– 20 lakh
7. Advertising cost– 3% of the entire gross sales 
8. Royalty fees – come to around 6% of the gross sales
9. Return on investment – can be expected after about 2-3 years of owning the store.
10. Total infrastructure investment – is about 6cr to 16cr

The space that is required to set up the store cannot be less than 750 sq ft. The optimum space should be within 1500-2000 sq ft. 

Profit Margin Of McDonald’s Franchise

McDonald’s franchise is a highly profitable business opportunity in India, though the actual profit and profit margin can vary based on factors such as the type of outlet, location, and customer traffic.

On average, a McDonald’s franchise generates an annual revenue of approximately INR 2.6 crore. For every INR 1 lakh in revenue, franchisees can expect to earn a profit of INR 20,000 to INR 25,000, resulting in a profit margin of 20% to 25%.

We recommend conducting detailed research before committing to any franchise investment.

Steps That You Should Follow To Apply

There is a set procedure to follow when you are thinking of having a franchise from mcd. Here are the steps you should follow:

1: Talk to the franchisor team- first you have to talk to the entire team of McDonald’s so that you can know about the guidelines. They will talk to you about the fee structure and accompanying information after which you can fill the form. 

2: Submit the application– after you fill the form, you will have to double check the details so that there is no wrong information. Submit the form and then wait for the background check. 

3: Background Checking– Once you have already submitted the application, now it is time for McDonald’sto go for a detailed background checking procedure. Thereafter the application will be approved or rejected as per your eligibility.
Be ready for a personal interview as well because they would want to know a bit more about you as well. 

4: Approval and Agreement with Signing– After proper scrutiny, the approval will be taken care of after which you have to sign the documents. Read the terms and conditions carefully before signing as you cannot change the terms later.
In case you are reluctant to meet the regulations, talk to the team so that you can come to an agreeable solution. 

5: Selecting the location- After the signing process, you will have to choose the store location with the help of the McDonald’s team. There are a number of factors that comes into play- that includes population, brand popularity, nearby rival stores and so on.
Once you are sure about the location, you need to start the construction right away. 

6: Support and Training- now that the store is set up, you need to start the operations right away. A proper training will be given by the team so that your resources are good enough and the day-to-day operations can be smooth.
You will receive ongoing support and guidance from the McDonald’s team even after your outlet is up and running. It typically takes between 1 to 1.5 months to open a McDonald’s franchise location.

Eligibility Requirements for a McDonald’s Franchise in India

As a globally recognized and well-established brand, McDonald’s is a leader in the QSR sector, and therefore, it has specific criteria for prospective McDonald’s Franchise owners, which include:

• Applicants should have prior experience in the food service industry.
• Applicants need to have a net worth of at least INR 5 crore.
• Applicants should be committed to a long-term partnership, with a minimum tenure of 20 years.
• Applicants must have a minimum liquid capital of INR 1.5 crore.
• Applicants should be willing to learn and embrace new challenges.
• Applicants must have a strong entrepreneurial mindset.

What Are The Documents Required?

Numerous documents are needed when it comes to opening a McDonald’s franchise. The most important ones are:

1. Fund proof
2. All bank statements showing financial status
3. The detailed business plan

Check out this: The Burger Company Franchise: Guide to Costs, ROI & Benefits

Frequently Asked Questions:

Here are some of the most asked questions by the investors and their answers. Go on and read them to get some more clarity. 

1. Is McDonald’s franchise be a profitable affair in India?

In India, getting a McDonald’s franchise can be quite a profitable business but you have to check the margin based on some factors like location and store type.

It will also depend on the number of customers to get an idea of the exact profit margin.

2. How long is the McDonald’s Franchise tenure and how much does it cost?

The tenure of McDonald’s Franchise agreement is about 20 years. And the costing of the entire agreement can come up to 25 to 30 lakhs. 

But if you talk about the entire setup and initial cost, the you should know that the range can be as low as 6 crores to 14 crores. It will include the store layout, resources as well as interior design.

It also covers the ongoing cost, initial royalty as well as the rental fee of the property that you are taking on lease. 

3. What is the royalty fee for a McDonald’s franchise in India?

The royalty fee typically ranges from 4% to 5% of the restaurant’s monthly gross sales.

4. What are the other operating costs for a McDonald’s franchise in India?

In addition to the royalty, other expenses include marketing fees, employee wages, inventory costs, utilities, and maintenance of equipment.

5. Is financial assistance available for McDonald’s franchise in Mumbai, Gujarat, or Ahmedabad?

While McDonald’s does not usually offer direct financial support, franchisees can explore loan and funding opportunities through banks and financial institutions.

6. What is the ROI for McDonald’s franchise cost in India?

Do not think about getting profits right from the beginning. Instead you should wait for the first couple of years to break the ice ad start seeing a considerable profit margin.

Final Words

Now that you know all about how the McDonald’s franchise works, if you have the funds, you should make the best out of this opportunity. So what are you waiting for?