How Much Does a McDonald’s Franchise Owner Make in a Year?

Owning a franchise can help you fulfill your long-term dream of being a business owner. Due to its popularity, McDonald’s is a top-rated franchise across the country. You will find a McDonald’s in almost every state and city. If you are one of the people who keep looking for a McDonald’s franchise for sale near your location, you must first understand how a fast-food franchise like McDonald’s works and how much the franchise owner can make in a year. 

What is a Fast Food Franchise? 

Like McDonald’s, most fast-food restaurants in your area are not owned by their company. They may be owned by an independent operator or franchise owner. Franchising lets the leading company expand quickly and also benefits the franchise owners. The owner has to pay a percentage of the earnings to McDonald’s after the franchise agreement is signed. The owner can benefit from extensive marketing campaigns and get guidance from industry experts in exchange. As a result, they can attract customers who already love the brand.

Components of a Franchise Owner’s Income 

There are two different components to a McDonald’s franchise owner’s income – gross income and net income. Though many people think gross and net income are the same, there is a lot of difference between the two. Franchise owners should monitor both their gross and net incomes. In the fast-food industry, gross income is also referred to as the gross profit and net income as net profit. It refers to your revenue minus the operational costs. Gross income can indicate how well your franchise is doing in terms of attracting customers. Net income refers to the gross income minus the overhead costs. These costs can include your employees’ wages, rent, franchise fees, cost of raw material, utilities, equipment lease, and finance charges. Any additional cost that your franchise incurs also gets removed from gross income to calculate your net income. While gross profit margins for a McDonald’s owner may be high, the net profit margins can be substantially thin. 

Income of a McDonald’s Franchise Owner 

According to research, an average McDonald’s makes about $2.7 million in sales in a year. While some franchise owners may make more than the others, most earn about $150,000 in profits. That comes up to about 6% of the total earnings. Most earnings go towards supplies, employee wages, rent, food costs, and other operational expenses. 

Because of its popularity, McDonald’s would like to have as many franchisees as possible across the country. This system has worked great for the fast-food company, contributing to its profit margins. 

Factors That Can Influence a Franchise Owner’s Income 

Determining how much you will earn as a McDonald’s franchise owner is not an easy task. There are various components of running the franchise that can impact your income. Listed below are some of the factors that can affect a McDonald’s franchise owner’s income: 

Franchise Owner Expertise 

While you will get a lot of information from the franchisor on various aspects of the business, how you use that information depends on you. Your work ethics and knowledge of running a business can affect your franchise’s success and, in turn, your income.  

Managing Stocks 

When you purchase a McDonald’s franchise, you will be given tips on managing stocks. If you can manage your stocks well, you will be able to bring down your costs, which will increase your profit. If you can minimize operational costs without affecting the quality of service, you can make a more significant profit from your franchise and earn more. 

Hiring and Managing Workforce 

While you may have loyal McDonald’s customers visit your franchise the first time, you will have to provide top-notch service for them to keep coming back. Hiring qualified and experienced people and maintaining a healthy relationship with them will help you attract more customers. If your employees behave well with customers and provide them with quality service, your customers will return to your franchise. And if your employees are treated with respect by you, they will put in their best on the job. 

Owning a McDonald’s Franchise

Owning a McDonald’s franchise can cost you up to $ 500,000 in liquid assets. They will require this money to fund your startup costs, monthly royalty fees, marketing, and other services. If you want to buy a McDonald’s franchise, you can work with a company like NNN Deal Finder to help you find the right deal for your franchise.