McDonald's

McDonald's has long reigned supreme in the fast food industry. Whether it's a Happy Meal or a McChicken, the world is lovin’ it.

If you’re interested in opening a McDonald's franchise, this article will cover everything you need to know about the history of the golden arches, the franchising requirements, and how to get started.

A Golden History

McDonald’s is a worldwide staple today, and its founders always had that as their vision. In the 1940s, Dick and Mac McDonald moved to San Bernardino, California, and opened their own drive-in burger joint. They streamlined their operations and offered a simple menu: burgers, fries and shakes.

The McDonald brothers saw an opportunity in their thriving San Bernadino drive-in, and they decided to expand. Wanting people to recognize their restaurants easily, they implemented the yellow and red colors that McDonald's still uses today. Another tactic they used to stand out and catch the eye of local traffic was to raise their roof into the iconic golden arches.

In the 1950s, the McDonald brothers met Ray Kroc, a salesman they hired as their franchise agent. Kroc took the franchise to new levels by expanding east of the Mississippi River. By 1967, Kroc led the expansion to Canada and Puerto Rico.

Throughout its growth, McDonald's incorporated vital concepts that made it what it is today, such as Hamburger University to train employees, Play Places to attract families, essential menu items, and famous slogans.

Today, McDonald's has over 36,000 locations in over 100 nations — a figure that continues to grow.

Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.

Why You May Want To Start a McDonald's Franchise

There are several risks involved when it comes to running your own business. Because McDonald's is such an established corporation, business owners will have more support and resources than they would if they ventured out independently.

Proven System

McDonald's has a decades-old franchise motto: “You are in business for yourself, not by yourself.” The saying shows new franchisees that Mcdonald’s is serious about supporting them. McDonald's believes that its 60-year-proven system offers its franchisees all the necessary tools to operate at a high standard.

Specific support includes:

• Operations resources and guidance.
• Extensive training.
• Access to trademarks and branding.
• A local and national network of partners.

Brand Name Recognition

It's no secret that McDonald's commands a considerable following, especially in the American fast-food industry. The fast food chain also enjoys global recognition for its affordable and growing menu.

Running a McDonald's franchise may quickly draw in loyal (and hungry) customers. This is all due to the McDonald’s brand’s credibility and status — and, of course, their irresistible french fries.

Because of this, you’ll have a substantial competitive advantage, a head start in your new business and built-in customer loyalty.

McDonald's also promises the following:

• Buying power of pooled funds.
• Extensive global network.
• Premier suppliers.

Community Outreach

When researching any franchise option, a good place to start is to figure out what the company stands for.

Is community outreach essential to you? Your values align with McDonald's.

The McDonald’s corporation believes that fast food franchise owners should be involved with their local community and will support your outreach efforts.

McDonald's also has company-wide initiatives, which include:

• Archways to Opportunity.
• Ronald McDonald House Charities.
• McTeacher’s Nights.

Build a Legacy and a Future

Since its inception, McDonald’s has always had its future in mind. The fast food restaurant cares about nurturing that mindset for its franchise owners. For instance, McDonald’s Next Generation Training Program offers the opportunity for family members to join the system and create their legacy.

McDonald’s mission is to stay on the cutting edge of business ideas, marketing trends, and technological innovations. They want to bring their franchisees on this upward journey — another reason franchising a McDonald’s can bring you lots of success.

Why Opening a McDonald’s Location May Be a Good Choice

Becoming a McDonald's owner could launch you into a successful business experience. Coupled with a good reputation and a considerable market segment, opening a McDonald's franchise may have a more predictable outcome than investing in a completely new brand.

Setting up a McDonald's franchise location can be a successful venture, especially when compared to establishing a new restaurant of the same general type under an unknown name. Where newcomers may struggle to carve out a niche in the already-crowded fast food industry, McDonald’s has been a powerhouse for decades.

As a result, riding on the existing niche that McDonald's commands could give you an upper hand. Additionally, you likely won’t have to spend a lot of resources on advertising to tap into local sales — allowing you to devote more money and focus on day-to-day operations.

How To Establish a McDonald’s Restaurant Business

If you're interested in running your own location, McDonald's actually operates through purchasing and branding existing restaurants. Regarded as one of the most lucrative businesses in fast-food, franchisees can use the brand name to leverage their existing customer base.

Under this model, McDonald's may lease any of their locations to you based on their stipulated terms and operating procedures. Outlet owners operating under the brand must operate under their policies. McDonald’s executives make a profit by acquiring existing outlet locations, branding, and then leasing to potential franchisees.

McDonald’s executives profit by acquiring existing outlet locations, branding, and leasing to potential franchisees. For them, the franchise business is perhaps more of a real estate venture than a fast food one, which is the same case for other restaurant franchises like Burger King and Wendy’s.

The company focuses on preserving its brand and defending its reputation; opening a McDonald's location may offer a perfect franchise opportunity to make your mark on the restaurant industry.

Keep reading for a more detailed step-by-step process for becoming a McDonald's franchise owner.

1. Application

This initial inquiry form will ask you to fill out basic information like your name, location, some demographics, and a bit about your business background.

2. Phone Interview, Background/Credit Check

During this step, you will communicate with a McDonald’s representative about your goals and vision and undergo a background and credit check.

3. Panel Interview

The panel interview is similar to a usual job interview. A panel of interviewers will ask questions about your job history, qualifications, and ability to become a franchise owner.

4. Financial/Asset Verification

This is where McDonald’s will complete its due diligence on your financial state and history.

To open a McDonald’s franchise, you should ensure that you have stable finances, as you’ll need to cover upfront investments, including the McDonald’s franchise cost. You should also prepare for ongoing fees, including the base rent, advertising, royalty, and renewal fees.

In some cases, McDonald’s requires a down payment before you can establish a restaurant in a new location. You may be required to pay a slightly lower down payment for acquiring an existing restaurant.

Here are some hard and fast figures that you’ll need to have before you can become a McDonald’s franchise owner:

• Liquid Assets: $500,000 minimum.
• Initial Franchise Fee: $45,000.
• Initial Investment: $1,008,000 to $2,214,080.

This is no low-cost franchise; however, to put those costs into perspective, QSR Magazine reports that sales can translate into a franchise owner's profit of $150,000 per year.

5. Review of Legal Documents

Before entering a franchise agreement, ensure the paperwork is correct. This final step should include a franchise disclosure document (FDD), a legal and binding agreement between you and the franchisor.

It should also include information like:

• Company description and history.
• Previous or ongoing litigations.
• Any history of bankruptcy.
• Investment costs and fees.
• Products and services information.
• Proprietary information, patents, and copyrights.
• Financial statements and receipts.

6. Enter Their Training Program

Before opening a McDonald’s franchise, the company takes franchisees through an extensive training program.

The training program will include:

• A team of trainers, including experienced franchisees.
• Self-paced online curriculum.
• Three formal leadership courses.
• 20-hour per week commitment.
• How to run a restaurant.
• How to maximize performance.
• How to grow your business.
• How to run a multi-restaurant organization.

The Takeaway

As a franchisor, McDonald’s is persistent in its pursuit of expanding its brand and working with motivated franchisees who can uphold its world-renowned legacy.

The Big Mac, French fries, McNuggets, McFlurries, and other signature menu items are a shoo-in to keep customers coming through your doors. If you’ve got the drive and financial means, McDonald’s could be your perfect new business venture.

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