When entrepreneurs think of investing in a franchise, one brand immediately comes to mind: McDonald’s. As one of the most iconic and profitable fast-food chains globally, owning a McDonald’s franchise seems like a golden opportunity. But just how much does a McDonald's franchise cost? What are the hidden fees, the required qualifications, and the expected return on investment?

In this comprehensive guide, we break down everything you need to know about the cost of owning a McDonald's franchise—from initial fees to long-term financial commitments—so you can make an informed decision before diving into this high-demand opportunity.

Investing in a McDonald’s franchise is one of the most attractive options for aspiring entrepreneurs in North America. But the big question is: How much does it cost to own a McDonald’s franchise in the U.S. or Canada?

This guide breaks down the full financial investment, qualification process, and profit potential across both markets so you can make an informed decision before moving forward.

Key Localized Differences:

United States:

• Initial total investment: $1.3M – $2.4M USD

• Franchise fee: $45,000 USD

• Liquid assets required: $500,000+ USD

• Training: 9–18 months via Hamburger University (U.S. headquarters)
  
  

Canada:

• Initial total investment: $1.5M – $2.6M CAD

• Franchise fee: $60,000 CAD

• Liquid assets required: $700,000+ CAD in unencumbered capital

• Training also required at McDonald's corporate (Toronto or Chicago)

Franchisees in Canada must be citizens or permanent residents and demonstrate proficiency in English or French. U.S. applicants must be citizens or permanent residents and legally eligible to work full-time.

How much does it cost to buy a McDonald’s franchise in the U.S.?

The total investment to open a McDonald’s in the United States ranges from $1.3 million to $2.4 million USD. This includes a $45,000 franchise fee, equipment, real estate, and other startup costs.

How much is a McDonald’s franchise in Canada?

In Canada, the total investment is approximately $1.5 million to $2.6 million CAD, including a $60,000 CAD franchise fee and a requirement of $700,000 in unencumbered capital.

What are the ongoing fees for owning a McDonald’s franchise?

Franchisees pay a 4% service fee (royalty) on gross sales, monthly rent to McDonald’s (percentage-based), and 4% toward national marketing.

How profitable is a McDonald’s franchise?

A typical McDonald’s location generates $2.5M–$3M in annual revenue. Net income can range between $150,000 to $250,000 per year, depending on operations and location.

Can I finance a McDonald’s franchise?

McDonald’s does not offer direct financing but has relationships with preferred lenders in both the U.S. and Canada. Franchisees must still invest a substantial amount of their own capital.

Why Consider a McDonald’s Franchise?

McDonald’s is a powerhouse in the franchise industry, with over 38,000 locations across more than 100 countries. Its brand recognition, operational systems, marketing muscle, and economies of scale make it a compelling investment.

Key reasons entrepreneurs choose McDonald’s:

• Established brand with built-in customer base

• Proven systems and training

• Consistent profitability

• Ongoing support and resources

But high demand also comes with high barriers to entry. Understanding the full financial commitment is critical before proceeding.

What Is the Initial Investment for a McDonald’s Franchise?

The total investment to open a McDonald’s franchise ranges from approximately $1.3 million to $2.4 million, depending on location, size, and whether you're purchasing a new or existing store.

Breakdown of Initial Costs:

• Franchise Fee: $45,000 (one-time, non-refundable)

• Real Estate and Construction: Costs vary depending on location; McDonald’s often owns the land and leases it to franchisees.

• Equipment and Signage: $400,000 to $800,000+

• Inventory and Supplies: $20,000 to $40,000 to open

• Security, Technology, and Miscellaneous Expenses: $50,000 to $100,000+

• Grand Opening Marketing: $10,000 minimum

• Working Capital: At least $500,000 in non-borrowed liquid assets is required.

Ongoing Fees and Financial Obligations

Owning a McDonald’s franchise is not just about the upfront cost. You’ll also be responsible for continuous fees and royalties that impact long-term profitability.

Ongoing Costs Include:

• Service Fee (Royalty Fee): 4% of gross sales, paid monthly

• Rent to McDonald’s: Varies by location and store performance; often a base rent plus a percentage of monthly sales

• Advertising Contribution: Minimum of 4% of gross sales to national advertising fund (in addition to any local marketing spend)

These fees support the ongoing brand presence, national advertising campaigns, and corporate support that make McDonald’s one of the most recognized brands in the world.

Financial Qualifications: Who Can Own a McDonald’s?

Not everyone can qualify to become a McDonald’s franchisee. The brand has strict financial and personal requirements to ensure franchise success.

Minimum Financial Requirements:

• $500,000 in non-borrowed personal liquid assets

• Strong credit history and business acumen

• Willingness to undergo 9–18 months of unpaid training

• Full-time, hands-on commitment to the franchise

McDonald’s often prefers franchisees who want to operate multiple units over time. Experience in operations, people management, or hospitality is also highly valued.

Buying a New vs. Existing McDonald’s Location

McDonald’s offers two primary paths to ownership:

1. Buying a New Location

This means starting from scratch. You work with McDonald’s on site selection, design, and launch.

Pros:

• Brand-new location with modern equipment

• Custom-built for current market trends

Cons:

• Higher upfront costs

• Slower ramp-up to profitability

2. Purchasing an Existing Location

Many McDonald’s franchisees enter the system by buying an existing store from a retiring or exiting operator.

Pros:

• Immediate cash flow

• Existing customer base and staff

• Known performance history

Cons:

• Purchase price can exceed $2 million+

• May require renovations or upgrades

Financing Options for McDonald’s Franchisees

While McDonald’s does not offer direct financing, the company has long-standing relationships with several approved third-party lenders who understand the franchise model.

Potential financing options include:

• SBA loans (Small Business Administration)

• Franchise-specific lending from institutions like Wells Fargo or Bank of America

• Equipment leasing and real estate financing solutions

• Personal equity or partnerships

It's important to note that McDonald’s requires franchisees to invest a significant amount of their own capital. This ensures commitment and financial resilience.

How Profitable Is a McDonald’s Franchise?

Profitability varies by location, management, and market conditions. However, a typical McDonald’s franchise generates annual revenue of $2.5 million to $3 million.

Estimated net income for a single McDonald’s store can range from $150,000 to $250,000 per year, depending on operational efficiency and overhead costs.

Factors that influence profitability:

• Location and traffic volume

• Labor costs and management

• Real estate and rent structure

• Menu pricing and upselling

• Local competition and marketing

Challenges and Risks of Owning a McDonald’s Franchise

Despite the brand strength, owning a McDonald’s franchise comes with notable challenges:

• High entry costs and long break-even periods

• Extensive corporate oversight and operational rules

• Full-time operator requirement

• High labor turnover in fast food sector

• Market saturation in urban areas

Franchisees must also stay compliant with corporate policies, maintain brand standards, and invest in ongoing updates, including digital ordering systems and facility upgrades.

How to Apply for a McDonald’s Franchise

The McDonald’s application process is detailed and selective. It includes:

1. Online application submission

2. Initial financial and background screening

3. Interviews and assessments

4. Formal training program (9–18 months)

5. Site selection or acquisition process

6. Final approval from corporate

Training takes place at Hamburger University, McDonald’s world-class learning center. Here, new franchisees are trained in operations, leadership, financial management, and customer service excellence.

Is a McDonald’s Franchise Worth It?

For many entrepreneurs, the answer is yes—if they meet the financial and time commitments. McDonald’s provides world-class support, a powerful brand, and a blueprint for long-term success.

However, it’s not a passive investment. It requires full-time involvement, large upfront capital, and strict adherence to corporate processes. Those who treat it as a serious business—not just a financial investment—are more likely to thrive.

Owning a McDonald’s franchise is one of the most prestigious and potentially lucrative franchise opportunities in the world. But with prestige comes high responsibility and cost.

If you’re considering investing in a McDonald’s franchise:

• Ensure your finances are in order

• Be ready for a full-time operational role

• Understand all associated fees and royalties

• Evaluate your long-term goals and lifestyle alignment
  
  

A McDonald’s franchise is not just buying a store—it’s buying into a legacy of excellence. For the right entrepreneur, it can be a life-changing move.