McDonald’s franchise cost runs $1,472,000 to $2,807,000 for a new traditional restaurant, including the $45,000 initial fee, per Item 7 of the disclosure document issued May 1, 2026.
Key takeaways
- Item 7 estimates $1,472,000 to $2,807,000 for a traditional restaurant, $1,015,500 to $1,864,500 for STO or STR, and $701,000 to $1,411,500 for a Satellite (2026 FDD, Item 7).
- The initial fee is $45,000, paid on opening (2026 FDD, Item 5).
- New restaurants pay a 5% royalty, at least 4% on advertising and percentage rent of generally 6% to 23% of Gross Sales (2026 FDD, Item 6).
- Required technology fees total $16,164.40 a year once all listed systems are deployed (2026 FDD, Item 6).
- The FDD states no minimum liquidity; 9 of 35 McOpCo sales in 2025 ran $53,000 to $1,500,000 above the Item 7 high end (2026 FDD, Item 7, note 11).
How much does a McDonald’s franchise cost in 2026?
As of October 2026, McDonald’s USA, LLC puts the McDonald’s franchise cost at $1,472,000 to $2,807,000 for a new traditional restaurant, counting three months of base rent and three months of working capital. The figures come from Item 7 of the McDonald’s Franchise Disclosure Document, issued May 1, 2026, filed in Minnesota. Two smaller formats have their own totals.
Signs, seating, equipment and decor are the largest line, about 66% of the high estimate, and include a $165,000 to $265,000 Technology Platform (Item 7, note 8). The totals exclude percentage rent and royalty (note 11).
| Item 7 line | Traditional | STO and STR | Satellite | Paid to | Source |
|---|---|---|---|---|---|
| Initial franchise fee | $45,000 | $22,500 | $0 to $500 | McDonald’s | Item 7, Item 5 |
| Base rent, 3 months | $0 to $310,000 | $0 to $60,000 | $0 to $65,000 | McDonald’s | Item 7 |
| Percentage rent, 3 months | 0.00% to 29.00% | 0.00% to 15.00% | 0.00% to 15.00% | McDonald’s | Item 7 |
| Signs, seating, equipment and decor | $1,100,000 to $1,850,000 | $735,000 to $1,350,000 | $550,000 to $1,050,000 | Vendors | Item 7, note 8 |
| Opening inventory | $20,000 to $39,000 | $16,000 to $35,000 | $14,000 to $45,000 | Vendors | Item 7 |
| Miscellaneous opening expenses | $55,000 to $68,000 | $55,000 to $68,000 | $55,000 to $68,000 | Vendors, utilities | Item 7 |
| Travel and living while training | $2,000 to $43,000 | $2,000 to $43,000 | $2,000 to $43,000 | Airlines, hotels | Item 7, note 9 |
| Additional funds, 3 months | $250,000 to $452,000 | $185,000 to $286,000 | $80,000 to $140,000 | Employees, suppliers | Item 7, note 10 |
| Total | $1,472,000 to $2,807,000 | $1,015,500 to $1,864,500 | $701,000 to $1,411,500 | Item 7 |
Signs, seating, equipment and decor make up $1,850,000 of the $2,807,000 traditional high estimate. Source: McDonald’s FDD issued May 1, 2026, Item 7.
The filing is a marked copy: 2026 figures are underlined and 2025 figures struck through beside them. Read as plain text the two merge, which is how the 2025 high end of $2,728,000 still appears in some 2026 guides.
Across 27 food and beverage FDDs issued in 2025 and 2026, the median Item 7 was $482,500 to $959,374, so the McDonald’s low end is about 3.1 times that median low, per our franchise initial investment study.
What is the McDonald’s franchise fee?
The McDonald’s franchise fee is a $45,000 lump sum paid when the restaurant opens, under Item 5 of the 2026 FDD. Small Town Oil and Small Town Retail franchisees pay $22,500, Satellite franchisees pay $500, and McDonald’s in Walmart Satellites pay no initial fee. The fee is about 3.1% of the traditional low estimate and 1.6% of the high estimate.
- Refund: in full only if construction is not completed within 1 year of signing (Item 5).
- Prorated fee: for terms of 10 years or less (Item 5).
- Relocation: fee less a credit, plus a $50,000 Relocation Contribution (Items 5 and 6).
- BFL: $45,000 only when exercising the asset purchase option (Item 5).
The fee is small next to rent: McDonald’s Corporation’s fiscal 2025 Form 10-K reports worldwide franchised revenues of $10,442 million in rent, $6,018 million in royalties and $88 million in initial fees, a mix our study of how franchisors make money compares with 25 other public franchisors.
What does a McDonald’s franchise cost each month?
A McDonald’s franchise pays a 5% or 4% royalty, at least 4% of Gross Sales on advertising, and rent to McDonald’s under the Operator’s Lease (2026 FDD, Item 6). Rent moves most: base rent tracks McDonald’s land and building investment, and percentage rent for new traditional units is generally 6% to 23%.
| Ongoing charge | Amount | When it applies | Source |
|---|---|---|---|
| Royalty | 5% of Gross Sales | New restaurants, McOpCo purchases, first-refusal resales (since Jan 1, 2024) | Item 6, note 2 |
| Royalty | 4% of Gross Sales | Pre-2024 restaurants: family transfers, new terms, resales, rebuilds | Item 6, note 2 |
| Advertising and promotion | Not less than 4% of Gross Sales | OPNAD pledge, currently 2.25%, counts toward it | Items 6 and 11 |
| Monthly base rent | Varies | McDonald’s land and building investment times a finance factor | Item 6, note 3 |
| Percentage rent, new traditional | Generally 6% to 23% of Gross Sales | Opening on or after Jan 14, 2026; generally 11.50% minimum from year 8 | Item 6, note 3 |
| Required technology fees | $16,164.40 a year | 16 non-optional fees, including Edge at $5,220 | Item 6 |
| One-time technology fees | $4,975 | Sesame $2,600, kiosk $1,500, DMB 2.0 $264, GRNT $491, Edge $120 | Item 6, note 11 |
How does McDonald’s percentage rent work?
Percentage rent is due only when monthly Gross Sales pass a base sales figure equal to Monthly Base Rent divided by the rent rate (Item 6, note 3). McDonald’s states the rate before signing; it generally rises over the first seven years, by no more than 3.50 points in total unless needed to reach the 11.50% floor.
Eligible new restaurants can cut the rate in 0.25% steps by co-investing in the building, at generally not less than $30,000 per step, paid on top of Item 7 (note 4). Small town units use a fixed table: 9.50% for STO and 9.00% for STR when McDonald’s costs are $640,000 or less, up to 11.50% and 11.00% near $1,000,000 (note 7).
The median food brand in our franchise royalty rates dataset charges $3,000 a year in fixed fees beyond royalty and ad fund, about one fifth of the McDonald’s tech total. Ad fund rates across brands are in our franchise advertising fund report.
How do traditional, STO, STR, Satellite and BFL franchises compare?
McDonald’s offers five franchise formats in the 2026 FDD, each with its own fee, term and rent. Traditional restaurants pay $45,000 for generally 20 years; STO and STR units pay $22,500 for generally 10 years; Satellites pay $500 or nothing; a BFL leases the whole business for generally 3 years.
| Format | What it is | Initial fee | Item 7 total | Term | Rent model | Source |
|---|---|---|---|---|---|---|
| Traditional | Freestanding or storefront | $45,000 | $1,472,000 to $2,807,000 | Generally 20 years | Base plus percentage rent, generally 6% to 23% | Items 1, 5, 6, 7, 17 |
| Small Town Oil (STO) | Shares a building with a fuel station | $22,500 | $1,015,500 to $1,864,500 | Generally 10 years | Tiered 9.50% to 11.50% | Items 1, 5, 6, 7 |
| Small Town Retail (STR) | Anchors a rural retail center | $22,500 | $1,015,500 to $1,864,500 | Generally 10 years | Tiered 9.00% to 11.00% | Items 1, 5, 6, 7 |
| Satellite | Smaller menu in Walmart, airports, hospitals | $500; Walmart $0 | $701,000 to $1,411,500 | Varies by location | Case by case; Walmart 14% to 15.5%; $500 to $2,500 annual fee | Items 1, 5, 6, 7 |
| Business Facilities Lease (BFL) | Premises and business facilities leased | $45,000 on purchase option | No separate Item 7 table | Generally 3 years, extendable to 20 | Case by case, weighing your net worth and liquidity | Items 1, 5, 6 note 8, Exhibit F |
How much cash does a McDonald’s franchise need?
A McDonald’s franchise needs cash to cover the Item 7 range of $1,472,000 to $2,807,000 for a new traditional restaurant, of which $45,000 to $355,000 is paid to McDonald’s itself as fee and three months of base rent. The 2026 FDD states no minimum liquid capital or net worth; McDonald’s typically offers no financing (Item 10).
The worked example regroups the traditional estimate and adds costs Item 7 leaves out; the stress row adds the largest 2025 McOpCo overrun from Item 7 note 11 to the high estimate.
| Worked example, new traditional restaurant | Low | High | Source |
|---|---|---|---|
| Initial fee plus 3 months base rent (paid to McDonald’s) | $45,000 | $355,000 | Item 7 |
| Equipment, inventory, opening and travel costs (paid to vendors) | $1,177,000 | $2,000,000 | Item 7 |
| Additional funds for the first 3 months | $250,000 | $452,000 | Item 7 |
| Item 7 total | $1,472,000 | $2,807,000 | Item 7 |
| Plus first-year required technology fees, recurring and one-time | $21,139.40 | $21,139.40 | Item 6 ($16,164.40 + $4,975) |
| Plus optional rent co-investment, one Quarter | $0 | $30,000 or more | Item 6, note 4 |
| Stress case: McOpCo purchase at the largest 2025 overrun | $4,307,000 | Item 7, note 11 ($2,807,000 + $1,500,000) |
Does McDonald’s finance franchisees?
McDonald’s typically offers no financing, but its parent may guarantee loans from Bank of America, N.A. for remodels, restaurant acquisitions and BFL purchase options (Item 10). As of March 30, 2026 the FDD lists Term SOFR at 3.76% and an APR of 6.76%, with terms of 3 to 5 years and a personal guarantee from the franchisee and spouse.
Illustrative arithmetic, not an FDD figure: $500,000 at 6.76% APR over 60 months costs about $9,844 a month and $90,645 in interest. A BFL option needs 25% of the price in unencumbered funds (Exhibit F), so a $1,000,000 price needs $250,000 of your own money. Other funding routes are in our franchise costs guide.
What does McDonald’s require besides money?
McDonald’s requires unpaid training of 6 months to two years, full-time on-premises supervision and a site McDonald’s chooses (2026 FDD, Items 11 and 15). The Candidate Development Program, including a 32-hour class at Hamburger University in Chicago, must be finished before you sign or pay anything.
- Sign the Preliminary Agreement (Exhibit J); no franchise is guaranteed.
- Complete the Candidate Development Program; core training is free, and Item 7 budgets $2,000 to $43,000 for travel.
- Accept a site McDonald’s selects; you do not approve sites (Item 11).
- Sign the Franchise Agreement about 30 days before opening; no monthly fees accrue until opening (Item 11).
- Operate full time with personal on-premises supervision (Item 15).
Item 12 grants no exclusive or protected territory; compare that in our franchise territory rights report. Training rules across 2026 FDDs are in our franchise training programs study.
How many McDonald’s franchises open and close each year?
U.S. franchised McDonald’s restaurants rose from 12,764 at the start of 2023 to 13,062 at the end of 2025, while company-owned units fell from 691 to 644 (2026 FDD, Item 20). In 2025, 221 franchised outlets opened, 46 were not renewed, none were terminated and 728 changed hands.
| Franchised outlets | 2023 | 2024 | 2025 | Source |
|---|---|---|---|---|
| Start of year | 12,764 | 12,772 | 12,887 | Item 20, Table 1 |
| Opened | 128 | 167 | 221 | Item 20, Table 3 |
| Terminations | 73 | 29 | 0 | Item 20, Table 3 |
| Non-renewals | 33 | 15 | 46 | Item 20, Table 3 |
| Reacquired by McDonald’s | 13 | 8 | 0 | Item 20, Table 3 |
| Ceased operations, other | 1 | 0 | 0 | Item 20, Table 3 |
| End of year | 12,772 | 12,887 | 13,062 | Item 20, Table 1 |
| Transfers between franchisees | 672 | 843 | 728 | Item 20, Table 2 |
Franchised openings rose from 128 in 2023 to 221 in 2025 while removals fell from 120 to 46. Source: McDonald’s FDD issued May 1, 2026, Item 20, Table 3.
Item 20 Table 5 projects 231 franchised and 9 company-owned openings in 2026. Item 21’s audited statements show McDonald’s USA, LLC 2025 revenues of $10,825 million, $7,371 million of it from franchised restaurants. Resale rules across brands are in our franchise resale report.
Does the McDonald’s FDD include earnings data?
Yes. Item 19 of the 2026 McDonald’s FDD gives a sales-volume distribution for traditional restaurants open at least 1 year at December 31, 2025, plus pro forma statements at three sales levels. We do not republish those figures; read them in the filing and see our Item 19 study.
What several McDonald’s franchise cost guides get wrong
Several top-ranking McDonald’s franchise cost guides updated in 2026 print figures that do not match the clean 2026 FDD text. The table pairs each claim, described without naming the page, with the current FDD wording and item, checked on October 20, 2026.
| What several guides say | What the 2026 FDD says | Source |
|---|---|---|
| Total investment of $1,470,500 to $2,728,000, or a $2,728,000 high end | $1,472,000 to $2,807,000; $2,728,000 is the 2025 figure, struck through in the marked filing | Item 7 |
| The royalty rose to 5% starting January 2026 | 5% has applied to new restaurants since January 1, 2024 | Item 6, note 2 |
| Royalty and advertising total 8% of sales | A new restaurant pays 5% royalty plus not less than 4% advertising, at least 9% before rent | Item 6 |
| McDonald’s requires $500,000 or $750,000 in liquid funds and 25% or 40% down | No minimum liquidity or net worth in the FDD; only a 25% unencumbered-funds rule for BFL options | Items 5 to 10, Exhibit F |
Ask McDonald’s in writing which liquidity and down-payment standards apply to you, since they sit outside the 23 items that the FTC Franchise Rule at 16 CFR 436.5 requires.
Which McDonald’s franchise path fits your situation?
The McDonald’s franchise path that fits depends on how much capital you can document, whether you will accept a format and site McDonald’s chooses, and whether you can train unpaid for 6 months to two years. The decision table sets thresholds from the 2026 FDD; the flowchart below holds the same logic.
| If | Then | FDD basis |
|---|---|---|
| You can fund $1,472,000 to $2,807,000 plus about $21,139.40 of first-year tech fees | Ask about a new traditional restaurant | Items 6 and 7 |
| Your budget tops out near $1,864,500 | Ask about STO or STR sites ($22,500 fee) | Items 5 and 7 |
| Your budget tops out near $1,411,500 | Ask about Satellite locations | Items 5 and 7 |
| You have operator skill but less capital | Ask about a BFL; save 25% of the option price | Item 6 note 8, Exhibit F |
| You want an operating restaurant | Budget above $2,807,000; 9 of 35 McOpCo sales ran higher | Item 7, note 11 |
| You cannot work on site full time | This franchise does not fit | Item 15 |
Before signing, review all 23 items with a franchise attorney and accountant, using the FTC’s Consumer’s Guide to Buying a Franchise and our guide to buying a franchise. This page is general information, not legal, financial or investment advice.
How we compiled this
We read McDonald’s FDD issued May 1, 2026 (three marked parts, 414 pages in part 1) and checked every number on the rendered page, keeping underlined or unmarked text only. We added the fiscal 2025 Form 10-K, 16 CFR 436.5 and our 259-FDD datasets, accessed October 2026. We excluded all Item 19 figures and franchisee names.
Frequently asked questions
Is McDonald's a franchise?
Yes. Item 1 of the 2026 McDonald’s FDD says about 95% of U.S. restaurants are franchised to independent franchisees and about 5% to McDonald’s own McOpCo companies. Item 20 counts 13,062 franchised and 644 company-owned U.S. outlets at the end of 2025, a total of 13,706. Every unit, including company units, runs under a franchise agreement.
How much is the McDonald's franchise fee?
The McDonald’s franchise fee is $45,000 for a traditional restaurant, paid as a lump sum when it opens (2026 FDD, Item 5). Small Town Oil and Small Town Retail units pay $22,500, Satellites pay $500, and McDonald’s in Walmart Satellites pay nothing. The whole fee is refunded only if construction is not finished within 1 year of signing.
How much does a McDonald's franchise owner make?
This site does not publish owner income figures. McDonald’s discloses sales distributions and pro forma statements in Item 19 of its 2026 FDD. What an owner keeps depends on sales minus the 5% or 4% royalty, at least 4% advertising, percentage rent of generally 6% to 23% for new units, base rent, $16,164.40 of yearly tech fees, labor and debt service.
Can you buy an existing McDonald's instead of building one?
Yes. Franchisees transferred 728 restaurants to new owners in 2025 (Item 20, Table 2), and McDonald’s closed 35 McOpCo sale transactions that year. Buyers pay the seller’s price, assume the existing rent, and McDonald’s holds a right of first refusal. A McOpCo purchase carries the 5% royalty, and 9 of those 35 sales exceeded the Item 7 high end.
Does McDonald's offer financing to franchisees?
Typically no. Item 10 of the 2026 FDD says McDonald’s parent may guarantee Bank of America, N.A. loans for remodels, acquisitions and BFL purchase options. As of March 30, 2026 the stated APR was 6.76%, terms usually run 3 to 5 years, and the franchisee and spouse must sign a personal guarantee. Rent co-investment must be financed through your own lender.
Can I choose where my McDonald's restaurant goes?
No. Under Item 11 of the 2026 FDD, McDonald’s selects every site and negotiates its purchase or lease, and you do not select or approve locations. You lease the premises from McDonald’s under the Operator’s Lease. Item 12 grants no exclusive or protected territory, so McDonald’s may open other restaurants that affect your sales.
How long does it take to open a McDonald's franchise?
Training alone takes 6 months to two years under Item 11 of the 2026 FDD, and you must finish it before signing or paying anything. After McDonald’s offers a site, the Franchise Agreement is usually signed about 30 days before opening, while equipment arrives. No monthly fees accrue until the restaurant opens for business.
Sources
- McDonald’s USA, LLC, Franchise Disclosure Document, issued May 1, 2026 , accessed October 20, 2026.
- McDonald’s Corporation, Form 10-K for the fiscal year ended December 31, 2025, SEC EDGAR, accessed October 20, 2026.
- Federal Trade Commission, 16 CFR 436.5, Disclosure items, eCFR, accessed October 20, 2026.
- Federal Trade Commission, A Consumer’s Guide to Buying a Franchise, accessed October 20, 2026.
- Franchise Consultants and Brokers, 259-FDD Item 6 and Item 7 analysis, October 2026.