The cost to open a McDonald’s franchise is a significant investment. If you’re considering a McDonald’s franchise, understanding the full range of costs—upfront and ongoing—is crucial before you move forward.
This guide breaks down the McDonald’s franchise cost in practical categories (fees, real estate, equipment, inventory, training travel, and working capital), plus the ongoing fees you’ll need to plan for. You’ll also see why costs vary so widely by location and restaurant scenario.
If you want a brand story + systems lens (the “why” behind the model), read The Wild Story of McDonald’s Franchise History.
Quick Eligibility Reality Check (Before You Price Anything).
Before you model numbers or compare scenarios, it’s important to confirm whether McDonald’s is even financially attainable for you. Many prospective owners focus on the headline investment range without realizing that McDonald’s applies strict financial screening early in the process.
McDonald’s publicly recommends a minimum of $750,000 in non-borrowed, unencumbered personal funds to be considered for ownership. This requirement exists to ensure operators can weather early operating cycles, reinvest as required, and maintain system stability.
If you’re comparing McDonald’s to other franchise opportunities at different investment levels, the Franchise Financial Calculator can help you pressure-test affordability and risk before emotions get involved.
If this threshold feels restrictive, that’s intentional. McDonald’s uses capital requirements as a gatekeeper—not to discourage interest, but to protect the long-term health of the system.
McDonald’s Franchise Fee.
Every franchise system begins with an entry fee, and McDonald’s is no exception. The McDonald’s franchise fee grants you the right to operate under the brand and access its operating systems, training, and ongoing support.
The standard initial franchise fee for a traditional McDonald’s restaurant is $45,000. However, the structure includes several important exceptions and variations:
McOpCo (McDonald’s Operated Company) locations: No initial franchise fee.
Prorated fees: Franchisees with 10 years or less of real estate tenure (or who mutually agree to a shorter term) may pay a prorated fee.
Rebuilds or relocations: Fee is reduced by a credit for a portion of the previously paid franchise fee.
Satellite locations: $500 initial franchise fee (some Walmart locations pay no fee), plus an annual fee.
Small town locations (STO/STR): $22,500 lump-sum initial franchise fee.
Business Facilities Lease (BFL): $45,000 fee when the option is exercised.
The initial franchise fee is refundable if construction is not completed within one year of signing the Franchise Agreement. No refunds apply under other circumstances.
Breakdown of Initial Franchise Fees Based on Circumstances.
| Circumstance | Initial Franchise Fee |
|---|---|
| Standard Franchise | $45,000 |
| McOpCo Companies | $0 |
| Prorated Fee | Prorated based on tenure |
| Rebuilds or Relocations | Fee minus credit for prior fee |
| Satellite Locations | $500 (some locations may be $0) |
| Small Town Locations (STO/STR) | $22,500 |
| Business Facilities Lease (BFL) | $45,000 |
These variations show that the Mcdonald’s Franchise Fee is not one-size-fits-all. Restaurant format and agreement structure matter as much as the headline number.
Real Estate and Building Costs
Real estate is one of the largest variables in the franchise cost for McDonald’s. Unlike many franchises where owners secure their own sites, McDonald’s typically controls the real estate and lease structure.
Base Rent (First Three Months).
Base rent for the first three months can range from $0 to $313,000, depending on the restaurant scenario and market.
Percentage Rent.
In addition to base rent, franchisees may pay percentage rent, which can range from 0.00% to approximately 29.00% of gross sales, depending on lease terms and performance.
Over time, rent structure often has a greater impact on long-term economics than the initial franchise fee itself—making lease review a critical diligence step.
Signs, Seating, Equipment, and Décor.
Beyond real estate, the physical build of a McDonald’s restaurant represents the single largest upfront expense. These requirements reflect McDonald’s strict standards around kitchen efficiency, customer flow, and brand consistency.
Costs for signs, seating, equipment, and décor typically range from $1,100,000 to $1,785,000. This includes POS systems, kitchen equipment, interior finishes, and exterior signage. Customizations or deviations may require additional payments before signing the Franchise Agreement.
These standards protect system-wide consistency, but they also limit flexibility—owners should expect little room to reduce costs in this category.
Opening Inventory and Miscellaneous Opening Expenses.
Before opening day, several essential—but often overlooked—costs come into play. Opening inventory generally ranges from $20,000 to $39,000, covering food, packaging, and initial supplies.
Miscellaneous opening expenses—including permits, insurance, and operational supplies—often range from $54,000 to $66,000.
While smaller than buildout costs, these expenses add up quickly and should be included in any realistic startup budget.
Travel and Living Expenses (Training and Setup).
Training is a cornerstone of the McDonald’s franchise system and frequently requires travel. Travel and living expenses related to training and setup typically range from $2,000 to $41,000, depending on distance and local cost of living.
These costs are temporary but unavoidable, reflecting McDonald’s emphasis on operator readiness before launch.
Additional Funds (Working Capital).
Opening a restaurant is only the beginning. McDonald’s requires franchisees to maintain sufficient working capital to cover early operating expenses such as payroll, utilities, and insurance.
Additional funds for the first three months commonly range from $250,000 to $439,000.
This buffer is critical. Underestimating working capital is one of the fastest ways to create unnecessary pressure in the early months.
Total Estimated Initial Investment.
When all categories are combined, the total cost to open a McDonald’s franchise becomes clearer—but also more nuanced.
For a traditional restaurant, the total estimated initial investment typically ranges from $1,471,000 to $2,728,000.
Where you fall within this range depends on lease structure, market conditions, labor environment, and timing—making individualized analysis far more valuable than headline figures.
Ongoing Fees: Royalty and Marketing.
Initial investment is only part of the picture. McDonald’s franchisees also pay ongoing fees that support the brand and system.
Service (royalty) fee: Commonly 4% or 5% of gross sales, depending on circumstances
Advertising and marketing: Generally not less than 4% of gross sales
These fees directly affect long-term margins and should be modeled alongside rent and labor—not viewed in isolation.
Additional Fees (Common Examples).
Beyond royalties and marketing, franchise agreements may include additional fees such as:
Audit or inspection fees.
Satellite annual fees.
POS, digital, and technology-related fees.
Software, hardware, and maintenance charges.
Individually small, these fees reinforce why reviewing Items 5 and 6 of the FDD carefully is essential.
Detailed Breakdown of Costs and Fees.
| Cost Item | Amount | Notes |
|---|---|---|
| Initial Franchise Fee | $45,000 | Exceptions for McOpCo companies, satellite locations, and small town locations |
| Base Rent (First 3 Months) | $0 – $313,000 | Varies by restaurant scenario and market |
| Percentage Rent | 0.00% – ~29.00% | Depends on lease terms and restaurant performance |
| Signs, Seating, Equipment, Décor | $1,100,000 – $1,785,000 | Includes POS systems, kitchen equipment, and interior design |
| Opening Inventory | $20,000 – $39,000 | Initial stock for the restaurant |
| Miscellaneous Opening Expenses | $54,000 – $66,000 | Permits, insurance, initial supplies, etc. |
| Travel and Living Expenses | $2,000 – $41,000 | For training and setup |
| Additional Funds (First 3 Months) | $250,000 – $439,000 | Working capital buffer for early operations |
| Royalty / Service Fee | 4% or 5% of gross sales | Depends on agreement terms |
| Marketing / Advertising Fee | Not less than 4% of gross sales | Contribution to advertising and promotion |
Financial Performance: Read This the Right Way (Item 19).
Many prospective owners look for revenue or profit numbers when researching how much is a McDonald’s franchise. While performance data can be helpful, it must be interpreted correctly.
McDonald’s includes Financial Performance Representations (Item 19) in its current FDD. These figures provide context—but they are not guarantees. Performance varies widely by market, lease structure, and management.
If you want help comparing Item 19s across brands and understanding what’s included or omitted, start with the Franchise Webinar.
Treat Item 19 as a benchmarking tool—not a forecast—and validate assumptions with existing operators whenever possible.
McDonald’s Franchise Growth and Expansion (Why It Matters to Owners).
McDonald’s continues to evolve its restaurant formats, technology, and operating standards—often through systemwide initiatives that affect franchisees. That matters because your long-term success isn’t only shaped by opening costs, but also by what the brand expects over time (upgrades, remodeling cycles, digital tools, and operational standards).
For prospective owners, the practical takeaway is simple: evaluate the opportunity as a long-term operating partnership. In addition to the McDonald’s franchise cost, you’ll want to understand how reinvestment and modernization requirements may affect your cash flow in future years.
If you’re comparing McDonald’s with alternatives that require less reinvestment or have different operating models, use Find Franchises to explore options side-by-side.
A brand’s growth strategy can shape your obligations—so it belongs in your diligence checklist, not as an afterthought.
Recent Updates and What to Watch.
Franchise systems change over time—especially large ones. Policies around operations, technology, and quality standards can evolve as the brand pushes for consistency across thousands of locations.
Rather than relying on rumors or outdated summaries, the best practice is to focus on what’s documented: your franchise agreement, current FDD items (especially Items 5–7 and 19), and franchisee validation calls. That’s where the true “updates” show up in a way you can evaluate.
If you want a structured, guided diligence plan—especially when the numbers are big—book Franchise Consulting. To see the process step-by-step, join FranPath Live.
In high-commitment franchises, clarity beats headlines. Documented diligence is the safest way to make a confident decision.
Your Next Move: From Cost Clarity to a Confident Decision.
The cost to open a McDonald’s franchise is substantial—typically $1.47M to $2.73M, plus ongoing rent and fees—but the brand’s system-driven model is built for long-term durability.
The smartest approach is to treat this as a diligence project, not a logo decision. A structured sequence helps you avoid costly assumptions and ensures brand appeal never overrides financial clarity:
Confirm you meet the financial baseline.
Model affordability using the Franchise Financial Calculator.
Learn the diligence process in the Franchise Webinar.
Get one-on-one guidance through Franchise Consulting.
Compare alternatives via Find Franchises.
See the full journey in FranPath Live.
Take the Zorakle Assessment for a quick fit check.
For deeper context on how McDonald’s became the blueprint for system-driven franchising, revisit The Wild Story of McDonald’s Franchise History.
