Our guide to buying a McDonald’s franchise
It’s a globally recognised mega-brand. One of the most successful fast-food restaurants ever devised. Its format has been replicated in 118 countries with, at the time of writing, 34,000 outlets worldwide. And it’s probably the most recognised franchise system – certainly here in the UK.
No wonder so many people ask how much does it cost to buy a McDonald’s franchise.
But why? Is it just idle curiosity, or are there that many people seriously interested in buying a McDonald’s franchise?
Business format franchising at its best
We’ve all got to eat. And that means takeaways and fast-food chains will weather most economical storms; their low-cost convenience attracting hungry customers all year round. So perhaps we shouldn’t be surprised that food franchises get so much attention.
They lend themselves well to franchising too
A restaurant is easily replicated. And the simpler the concept, the easier it is to repeat. It doesn’t matter if you visit a McDonald’s in Newcastle or Newquay, you’ll still get the same cheeseburger and hot apple pie. That’s consistency. That’s satisfying consumer demand. That’s good franchising.
It’s easy to understand, then, why so many people are asking the same question: ‘how much does it cost to buy a McDonald’s franchise?’ If you’re going to invest your hard-earned money, and hope to see a return on that investment, then a proven model like McDonald’s is a pretty safe bet.
Selecting the right person for the job
Some people might suit the demands of a restaurant business. Others won’t. And as you’d expect, McDonald’s is very selective in its recruitment process. It certainly isn’t all about the money and whether you can afford to buy a McDonald’s franchise.
They’re looking for exceptional people.
And, in a way, so is every other franchisor. Nobody who has built a brand is going to accept mediocrity. Especially if they’ve developed a business system that benefits from the success of franchised outlets. But McDonald’s, more than most, can afford to be choosy.
Unlike some franchisors who might take a calculated punt on a franchisee, hoping they’ll follow the model and be successful, McDonald’s are in a luxurious position. With so much demand and status, they can be truly selective.
So while you might be wondering how much does it cost to buy a McDonald’s franchise, they’ll be wondering what you can bring to their brand.
A big commitment…and not just financially
Most franchise agreements are for five years. Some are for 10. But McDonald’s expects you to sign up for 20 years. That’s a long-term commitment. The training itself takes nine months. And you’re expected to cover the costs for this, as well as paying a refundable £5,000 training deposit.
So in asking how much does it cost to buy a McDonald’s franchise, you need to factor in how long you want it for. After all, 20 years is a long time. And McDonald’s insists that during that time you are only allowed to focus on their business.
You should consider the daily activities of a McDonald’s franchisee too. And ask yourself whether it’s an environment in which you will thrive.
As a management franchise, you’ll wear a number of different hats every day. One minute you might be preparing food, the next motivating or disciplining staff. You’ll get involved in marketing and finance, and McDonald’s encourages its franchisees to support local community projects too.
How much does it cost to buy a McDonald’s franchise in total?
There are various costs associated with starting a franchise: there’s the initial fee – often referred to as the franchise fee – and then there’s working capital, establishment costs and equipment purchases. So where can you ask how much does it cost to buy a McDonald’s franchise to work out whether you can really afford it?
As you might expect, McDonald’s own website provides that sort of information, and is designed to attract serious enquiries and put off any dreamers and unsuitable applicants.
On the site, the company suggests a total cost of between £125,000 and £325,000. And like many franchises – especially proven and established brands like McDonald’s – the banks will happily support you (subject to status). Up to 75% of the total investment can be secured through bank funding, which means you’ll need to have more than £30,000 in liquid funds. It could be as much as £70,000.
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Whatever you do, you should be loving it
‘How much does it cost to buy a McDonald’s franchise is a good question?’ But it’s not the most important. Of course, a franchisor needs to know you can afford to invest, and you need to know you have the funds. And you’ll need to see a return for your efforts that supports the lifestyle you want.
But lots of franchises can deliver that. Lots of other business opportunities can as well. What you really want to find is a venture that will give you the drive to get out of bed everyday with a smile on your face, and truly love what you do. Especially if it’s for a couple of decades!
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