If you’re thinking of joining the world’s most iconic fast-food brand, you’re probably looking for a lot of answers. How much does it cost to buy a McDonald’s franchise in the UK? How do I open a UK McDonald’s franchise? We’ll provide helpful answers to all these questions and more. But first, let’s take a brief look at the legendary history of McDonald’s.
The History of McDonald's: From Humble Beginnings to a Global Fast-Food Icon
Before delving into franchise ownership, it's essential to appreciate the rich history of McDonald's - albeit a brief one.
In 1940 (more than 80 years ago), McDonald brothers Richard and Maurice opened a small drive-in barbecue called ‘McDondald’s Famous Barbecue’. The brothers later realised that most of their profits came from hamburgers, so they ditched the drive-in barbecue and focused on burgers, potato chips, apple pie, soft drinks, and milkshakes. Due to a redesign and efficiency improvements, they managed to open six new locations.
By this time, Ray Kroc (a seller of the milkshake machines the brother’s used) was interested in their successful business formula. Impressed by their innovative fast-food system, Kroc saw the potential for expansion.
Kroc acquired the rights to franchise the brand, and the first official McDonald's franchise opened in Des Plaines, Illinois, in 1955. From there, McDonald's quickly grew into an international phenomenon, known for its signature menu items, including the Big Mac and the Happy Meal.
In 2022, McDonald’s had 40,275 restaurants across the world. In the same year, it generated $23.18 billion!
How Much Does a McDonald’s Franchise Cost?
To put it bluntly - a lot.
You need an upfront investment of at least £100,000 in unencumbered funds, and this is only 25% of the total investment. The remaining 75% can be funded through a bank loan.
That means it can cost around £400,000 to purchase a McDonald’s franchise outright, but this amount can increase considerably depending on location.
Here are additional McDonald’s franchise costs in the UK:
- Rent fees: 12.25 - 21%
- Service fee: 5%
- Marketing fee: 4.3%
How Much Can You Earn From a McDonald’s Franchise?
Investing thousands of pounds into a brand is not easy, but McDonald’s is transparent about how much you can earn from owning a McDonald’s franchise. While a McDonald’s franchise profit varies, here is some helpful financial information:
- A typical cash flow after the first year is between £50,000 and £550,000.
- A typical ROI over 20 years is between 20% and 25%.
- Typical annual sales are between £1.5 million - £4.3 million.
There is incredible potential to earn a lot of money owning a McDonald’s franchise, but it's important to note that McDonald's franchisees are selected based on their dedication, business acumen, and willingness to follow the company's proven system. Success requires hard work, adherence to McDonald's quality standards, and a commitment to customer satisfaction.
Training and Support: What Does McDonald’s Offer its Franchisees?
There’s no denying that the world’s largest food chain offers thorough and comprehensive training and support to its franchisees.
When you become a McDonald's franchise owner, you'll benefit from:
- Training: McDonald's offers an extensive 26-week training program covering all aspects of restaurant operations, including food preparation, customer service, and business management. This training includes business immersion, and a handover process.
- Consultancy: McDonald’s franchisees are offered access to a network of consultants with over 20 years’ experience.
- Marketing and advertising: McDonald's conducts national and local marketing campaigns to drive customer traffic. Franchisees also receive support in executing local marketing initiatives.
- Ongoing support: You'll have access to a dedicated McDonald's consultant who provides guidance and support to help you run your franchise effectively.
- Quality control: McDonald's conducts regular inspections to ensure that franchisees maintain high-quality standards.
How Do You Become a McDonald’s Franchise Owner?
If you’re looking to buy a McDonald’s franchise in the UK, you’ll need to jump through a few regulatory and legal hoops. On average, it takes 3-6 months to buy a McDondald’s franchise in the UK. This is what it takes to become a McDonald’s franchise owner:
- Sign up for an Open Day.
- Start your application process.
- Have your first interview, where a McDonald’s Franchise Team member will ask you several questions.
- Restaurant experience - here you’ll spend five days in a McDonald’s restaurant learning the ropes and proving your skills.
- Second interview - the Regional VP and Head of Franchising will explore your suitability.
- Panel interview - three senior Vice Presidents will ask you questions at your final interview.
- Training begins (both theory and practical)
- Potential restaurant offer.
- Handover period.
Other Franchise Opportunities You Can Consider
Owning a McDonald's franchise in the UK can be a rewarding investment, offering the opportunity to be part of a global brand with a rich history. While the initial investment is substantial, the potential for profit and success is significant. With McDonald's training and support, you'll have the tools and resources needed to run a successful franchise and contribute to the legacy of the Golden Arches in the UK.
However, if you don't have sufficient capital to invest in a McDonald's franchise just yet, don't worry! There are hundres of opportunities out there.
If you’re still deciding on what franchise to choose, you can take some time exploring other food-related franchise opportunities on BusinessesForSale.com.
You can also read our useful franchise guides. These offer credible information on the world of franchising, from how to choose the best franchise to understanding franchise agreement.
@Be_theBoss