McDonald’s is one of the most established and successful franchises to ever operate. Since 1955, this fast food chain has been in business.  Though it started in the tiny town of Des Plaines, Illinois, this brand can be found in 122 countries around the globe, with more than 30,000 locations.  Eighty-three percent of all McDonald’s franchisers own more than one store, and rarely, do these franchises close because of poor sales.

What makes this franchise business opportunity so successful?  And how do I start one?

McDonald’s holds high expectations from the beginning with its franchise owners. Not only does this entity require a large investment, but it also must be a non-borrowed cash investment.  This company wants individuals who are serious enough about successfully owning and operating a McDonald’s that they are willing to put forth their own, personal resources.  A minimum of $300,000 is required to even be considered, though buyers are encouraged to have more liquid assets at hand.  Further, “the buyer must pay 25% cash as a down payment toward the purchase of a restaurant (1)”.  McDonald’s allows the other 75% to be financed, but requires that it be paid within 7 years.

Among other requirements, McDonald’s holds the buyer to a 20-year commitment.  You must be present and committed to physically operating the store.  This is not negotiable.

Other components to consider are that of royalty fees, service fees, and rent charges.  Each of these must be paid out monthly.  Some are flat rates, while others consist of percentages of monthly sales.  McDonald’s further requires a franchise fee of $45,000 per year.

These numbers may sound overwhelming; however, it’s important to remember the brand name.  McDonald’s has successfully been in business for more than 50 years.  That’s pretty remarkable, considering the economy over that period of time.  Plus, if you go to any country in the world, everyone has heard of McDonald’s.

I’m a firm believer that the best investments require hard, hard labor and sweat.  McDonald’s only seeks after owners who have proven themselves and are willing to continue to put forth that effort.  This is not a “get rich” scheme.  This investment is secured by longevity and integrity.

Because McDonald’s requires that the franchise be paid within a 7-year period, buyers are looking at possibly not making too large of a profit until then.  This is of key importance.  It teaches the franchise owner stewardship and self-reliance.  McDonald’s wants its franchisers out of debt and earning big time money sooner than later.  As a result, it requires that sacrifice be put forth.  Again, this speaks of the company’s ideals, morals, and values.

If you’re in the market for a long-term investment that will bring you life-long success, look into owning and operating a McDonald’s franchise.  It provides a solid basis with a pattern and skills, which many would be wise to follow and implement in their own lives and personal budgets.

Do your research on McDonald’s.  There is a lot of information on the Internet about this franchise, and you can see if it’s a good match for you.

Michael Force also has some great tips to consider when starting a franchise or looking into any franchise business opportunity.  His personal experience from owning and operating a franchise will provide you with the tools necessary to make a well-educated decision.

References
1) http://www.aboutmcdonalds.com/mcd/franchising/us_franchising/purchasing_your_franchise.html
2) http://www.entrepreneur.com/franchises/mcdonalds/282570-0.html

Eliot Merk
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