We don’t know about you, but it seems that putting your hat into the whole franchise game is something that many people are talking about andis something many people want to do. And if you’re thinking about huge franchises like McDonald’s, why wouldn’t you? Regardless of how people feel about the fast food giant, people continue to go to these places to eat day after day, and we don’t see this changing any time soon.
But what about the franchise owners? What is their real profit when everything is said and done? What is their income from just one McDonald’s location? Well, we’ve decided to break it down and answer the question of how much one can make by owning a McDonald's -- and the results make surprise you.
Initial costs & elements
To begin our study, let’s first get the initial costs and talk of the franchise fee out of the way. According to the McDonald’s franchise website, the initial fee you must pay to McDonald’s (to become a part of their franchise and use their name, etc.) is $45,000.
But that’s not everything you have to pay for the company up front. While $45,000 may seem like a small amount to start your own little McDonald’s business, there some more costs you need to take into consideration.
For example, equipment and pre-opening costs range anywhere from $944,352 to $2,172,042. That means, to get the place up and running, you’re probably going to want to invest in about (or at the very least) $1 million into this company project. Of course, this varies depending on how you decorate the place, where you place it, location, and just about everything else.
Once you buy the McDonald’s and begin to hire your employees, you’re probably going to want to make sure everything is going okay. This brings us to how many hours a franchise owner works, daily. Of course, this varies and depends on you and other business opportunities or responsibilities that you have.
Some franchise owners work 4-6 hours a day, but occasionally remotely and not necessarily at the McDonald’s or franchise that they own. However, they do try to check in and visit the franchise once a day (or at the very least, once a week) to make sure things are going okay and that the place is clean and running smoothly. A lot of franchise owners also talk about keeping open communication between themselves and their restaurant manager; that way, if something is wrong or there is an issue, it can be resolved quickly at any time.
Of course, this does change depending on your own circumstances. If one owns more than one franchise, chances are they won’t be able to stop by each franchise daily. But many owners encourage an open relationship with the restaurant to make sure the business runs as smoothly as possible.
How much can you make owning one?
Obviously,as we talked about above, you’re going to need to invest about $1 million, or sometimes even more, before you can open your new franchise. From there, it just depends on how successful your business runs.
There is no way to foresee success, no matter how hard you try. However, there are certain things a franchise owner could do to attempt to be as successful as possible. For example, location is everything. If you place your McDonald’s franchise in an area of town that doesn’t have a lot of business, is in a weird area, or is maybe too close to another franchise (McDonald’s or other), you may not have a lot of success.
How your employees work, how customer friendly they are, and how clean your whole restaurant is are also vital to a franchise’s success. Owning a McDonald’s franchise is no different from owning any other business. You have to make sure you manage everything and stay on top of any problem that occurs, making sure things run as smoothly and efficiently as possible.
With all that said, there are two main ways to really gain a profit from owning a franchise: by selling and earning more than what you invested into the business, and by continuing to run the franchise and making enough money to earn a profit over the years.
Some people, after getting the franchise up and running, like to sell their business to get a profit. Some don’t. It just depends on your business technique and what you, a franchise owner, wants to do at that point in your life and career.
For the most part, McDonald’s estimates that franchise owners make an annual profit of roughly $150,000. Again, this number changes based off of the time your business has been up and running, location, the flow of business -- everything. Some franchise owners may make this; some might not. It’s the average.
If one is looking to sell their franchise after it does well, there’s no way to estimate just how much you can make. One franchise owner made about $1 million in profit just from the sale of their franchised McDonald’s business -- after only spending about $500,000 in investment, in the beginning, to get the restaurant up and running. However, this could vary depending on so many different aspects. Some people could sell their business for less, some for more.
For the most part, $150,000 annually is a relatively good income, as long as you stay on top of your business. Again, you could make more or less -- it just depends! But possible future franchise owners should always make sure they are prepared before taking that leap and investing in a McDonald’s franchise. While the initial $45,000 cost that you have to pay to McDonald’s to even be relegated to run a franchise looks cheap, you should always remember that it can cost more than $1 million, in the long run, to get your restaurant up and running.But who knows. Maybe one day you’ll be making over $150,000 a year from just one McDonald’s franchise through hard work and perseverance.