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McDonald'sFranchiseCost&Fees
DateofIncorporation:1955
FranchisingSince:1955
Headquarters:OakBrook,Illinois

BusinessDescription:McDonaldsdevelops,operates,franchises,andservicesasystemofrestaurantsthatprepare,assemble,
package,andsellalimitedmenuofvaluepricedfoodsundertheMcDonald'sSystem.McDonald'srestaurantsofferthepublic
ahighstandardofqualityanduniformityinfood,service,anddecor.McDonald'srestaurantsarelocatedinfreestanding
buildings,storefronts,foodcourts,andotherlocationsthatareappropriatetoMcDonald'simage.

FranchiseOffer:McDonaldsoffersfourtypesoffranchises:

1.Traditionalrestaurant:franchiseofferedislocatedinfreestandingbuildings,storefronts,foodcourts,andother
locations.Thefranchiseeoperatesafullmenurestaurant,offeringthepublicahighstandardofqualityanduniformityin
foodandservice.Thetermofatraditionalrestaurantisgenerally20years.
2.Satellitelocations:Thefranchiseeisgrantedtherighttooperatethefranchiseinaretailstore,stripcenter,airport,
universities,hospitals,andotherdiverselocations.Theserestaurantsserveascaleddownmenuofatraditional
McDonaldsRestaurantandinsomecasesmayalsoservenonMcDonaldstrademarkedproducts.Thetermofthe
franchisedependsonthelocation.
3.STOandSTRlocations:SmallTownOillocationsaresituatedinfuelstations/conveniencestores,andoperateafull
menuMcDonaldsrestaurantwithinthesharedspace.SmallTownRetaillocationsthatanchorasmallretailcenterin
ruralcommunities.
4.BFLfranchises:BusinessFacilitiesLeasefranchisesgrantfranchiseswithleasesthatincludethebusinessfacilities.
UnderaBFL,thefranchiseehasaconditionaloptiontopurchasecertainrestaurantassetsafterthefirstyearandextendthe
franchiseforupto20yearsafterthebeginningoftheterm.

FinancialAssistance:Typically,nofinancingarrangementsareofferedbyMcDonald's.McDonald'sissuesanOperator'sLease
foreachsiteownedorleasedbyMcDonald's.TheOperator'sLeaseisastandardcommercialleaseunderwhichthefranchisee
paysrenttoMcDonald'sforuseofthepremises.TheOperator'sLeasedoesnotcontainanyfinancingterms.Loanstocertain
franchiseesforthepurchaseofrestaurantbusinessessoldbytheMcOpCocompaniesandforotherreasonsaremadebyathird
partylender,LakeForestBankandTrustCompany.

TrainingandAssistance:McDonald'soperatesHamburgerUniversity,theinternationaltrainingcenterfortheMcDonald's
System.Thecontentanddurationofalloperationscourses,whichareofferedatvariouslocalsites,arerevisedandreconsidered
fromtimetotimetomeettheneedsofthefranchisees.Allcoursesandlearningeventsareofferedatfrequentintervalsandare
designedtogivefranchiseesspecificskillsetsinthevariousfacetsoftheconductofaMcDonald'srestaurant.Thebasic
minimumcoretraining,whichfranchiseesmustcompletetobequalifiedtooperateaMcDonaldsrestaurant,isknownasthe
RestaurantDepartmentManagement(RDM)curriculum.RDMcurriculumisdeployedthroughtheLearningManagement
System(FMS),whichallowsfranchiseestocompleteandtracktheprogressoftheirassignedlearningonline.Ittakes
approximately2yearstocompleteallRDMlearningplans,fromShiftManagerthroughGeneralManager.Thecompletetraining
programandmaterialsincludemanyelements.Aspartofthetrainingprogram,franchiseesmustperformandmasterallofthe
crewandmanagementfunctionsattherestaurant.Franchiseesmustcompletethetrainingprogramsuccessfullybeforesigning
theFranchiseAgreementorpayinganymoneytoMcDonald's.Therearenofurthermandatorytrainingrequirementsfor
franchiseesbeyondRDMcurriculum.However,annualmeetings,conventions,variousworkshops,andothertrainingsessions

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maybeconductedonanongoingbasiswithineachregion,andMcDonaldsmayrequirefranchiseestopayforthecosts
associatedwiththatongoingtraining.Additionally,optionalcoursesmaybeofferedtofranchiseesortheiremployeesforafee.

Territory:McDonaldsfranchisescontainalimitedgrantofauthoritytousetheMcDonaldsSystemintheoperationofthe
specificrestaurantdevelopedbyMcDonaldsatthataddress.Franchiseeswillnotreceiveanexclusiveterritory.Franchiseesmay
facecompetitionfromotherfranchisees,fromoutletsthatMcDonaldsowns,orfromotherchannelsofdistributionor
competitivebrandsthatMcDonaldscontrols.TheFranchiseAgreementdoesnotcontainanyexclusivegrant,exclusivearea,
exclusiveterritorialrights,protectedterritory,oranyrighttoexclude,control,orimposeconditionsonthelocationor
developmentoffutureMcDonald'srestaurantsatanytime.

TermofAgreementandRenewal:Traditionaltermisgenerally20years.TheSatellitetermvaries,STOandSTRtermlengthis
generally10years,andtheBFLtermlengthisgenerallythreeyears.Thefranchiseeisgivennorighttoreneworextendthe
franchiseafterthetermofthecontract.ARewrite(NewTerm)PolicyisnotpartofthepreviousFranchiseAgreement.

ObligationsandRestrictions:Thefranchiseeisrequiredtoprovidefulltimeandbesteffortstoandpersonalonpremises
supervisionof,thedaytodayoperationoftheMcDonaldsrestaurantbusiness.Franchiseesmaysellonlyproductsauthorizedby
McDonaldsandusethepremisesonlyasaMcDonaldsrestaurant.

EstimatedNumberofUnits:36,500

InvestmentTables:
InitialInvestment
NameofFee Low High
InitialFranchiseFee $45,000 $45,000
BaseRent: BaseRent:
$0 $198,000
RealEstateandBuilding3month'srent
PercentageRent:PercentageRent:
0% 42.5%
Signs,Seating,Equipment,andDcor $700,000 $1,500,000
OpeningInventory $20,000 $35,000
MiscellaneousOpeningExpenses $40,000 $50,000
TravelandLivingExpenseswhileTraining $3,000 $35,000
AdditionalFunds3months $195,000 $365,000
ESTIMATEDTOTAL $1,003,000 $2,228,045
InitialInvestmentforSTOandSTRLocations
NameofFee Low High
InitialFranchiseFee $22,500 $22,500
BaseRent: BaseRent:
$0 $53,745
RealEstateandBuilding3month'srent
PercentageRent:PercentageRent:
3% 17.3%
Signs,Seating,Equipment,andDcor $550,400 $900,000
OpeningInventory $13,500 $27,500
MiscellaneousOpeningExpenses $44,000 $50,000
TravelandLivingExpenseswhileTraining $3,000 $35,000
AdditionalFunds3months $181,000 $225,000
ESTIMATEDTOTAL $814,000 $1,313,745
InitialInvestmentforaSatelliteLocation
NameofFee Low High
InitialFranchiseFee $0 $500
BaseRent: BaseRent:
$0 $75,000
RealEstateandBuilding3month'srent
PercentageRent:PercentageRent:
0% 20.25%
Signs,Seating,Equipment,andDcor $300,000 $450,0000
OpeningInventory $10,000 $25,000
MiscellaneousOpeningExpenses $40,000 $50,000
TravelandLivingExpenseswhileTraining $3,000 $35,000
AdditionalFunds3months $80,000 $110,000

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NameofFee Low High

ESTIMATEDTOTAL $433,000 $745,500
OtherFees
TypeofFee Amount
ServiceFee 4%ofGrossSales.
Rent Varies.
AdvertisingandPromotion Notlessthan4%GrossSales.
Audit/InspectionFee Costofaudit.
SatelliteAnnualFee $500to$2,500
SatelliteRent Varies.
STORent Varies.
STRRent Varies.
BFLRent Varies.
RelocationContribution $50,000
NewPOSIntegrationFee $1,000integrationfee(onetimefee)$500annualintegrationfee.
RestaurantFileMaintenance(RFM)Fee $150
R2D2SoftwareMaintenanceFee $125
NewPOSSoftwareFee $1,600licensefee(onetimefee)$400annualsoftwaremaintenancefee.
CashlessFee $216licensefee(onetimefee)$154annualmaintenancefee.
MicrosoftSubscriptionLicense $465
EndpointSecurityLicensesandManagedservices $100
RestaurantSystemManagement(RSM) $250
RestaurantIntegratedDataMovement(RIDM) $75
e*RestaurantFee $54
IdentityManagementFee $75
StoreMail(emailaccount)Fee $73.80
PCICompliance/SecurityFee $250
RestaurantSupportFee $400
ISPMigrationFee $300
Digital(McDUS) $900onetimecost$390annually.
Digital(McDCorp) $660

TheaboveinformationhasbeentakenfromtheFDDofMcDonald's.YearofFDD:2016

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