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Tyler
United States
Приєднався 20 кві 2020
Food, restaurant, franchise and deal talk.
McDonald's Franchise Cost - Analysis of cost to either buy or build
The initial investment can vary from store to store, but McDonald’s publishes a range of $1,263,000 to $2,235,000. This is inclusive of the franchise fee.
McDonald’s is unique in the franchise space in that they own and control the real estate. Here is how the initial investment breaks down for a single location:
Initial Franchise Fee: $45,000
Signs, Seating, Equipment: $900,000 to $1,500,000
Opening Inventory: $20,000 to $35,000
Misc Opening Expenses: $45,000 to $55,000
Travel and Living Expenses: $3,000 to $35,000
Additional Funds: $250,000 to $355,000
Total: $1,263,000 to $2,235,000
McDonald’s Net Worth Requirement
Maybe you can find the money to build a new McDonald’s, but along with that McDonald’s is also going to check out your net worth. McDonald’s requires each franchisee applicant to have a minimum of $500,000 of unencumbered liquid assets available to invest in a McDonald’s prior to entering into the franchisee application process.
Other Ongoing Fees
The most typical ongoing fees in any franchise concept include royalties and advertising dollars paid back to the franchise. McDonald’s is fairly middle of the road in these fees. Given the number of store in the United States, these can amount to massive advertising dollars to be spent.
Service Fee (Royalty) 4% of Sales
Advertising and Promotion: Not less than 4% of Sales
It is usually important to understand the investment in any restaurant concept. More often, people are interested in the return that you can get on that investment.
From a top-line revenue perspective, McDonald’s is at the top of the food chain, averaging $2,500,000 for each location. Many other burger concepts are lucky to do in the ballpark of $1,500,000. That is 66% higher than the average fast food burger joint!
Other important financial metrics at the store level include a cost of sales of 29.4% and an EBITDAR margin of 23.5%. With average rents in the ballpark of 9-10%, that equates to EBITDA around 12%.
In the end, you can expect store-level EBITDA to be ~$300,000 per location. That isn’t too shabby for flipping burgers!
McDonald’s is unique in the franchise space in that they own and control the real estate. Here is how the initial investment breaks down for a single location:
Initial Franchise Fee: $45,000
Signs, Seating, Equipment: $900,000 to $1,500,000
Opening Inventory: $20,000 to $35,000
Misc Opening Expenses: $45,000 to $55,000
Travel and Living Expenses: $3,000 to $35,000
Additional Funds: $250,000 to $355,000
Total: $1,263,000 to $2,235,000
McDonald’s Net Worth Requirement
Maybe you can find the money to build a new McDonald’s, but along with that McDonald’s is also going to check out your net worth. McDonald’s requires each franchisee applicant to have a minimum of $500,000 of unencumbered liquid assets available to invest in a McDonald’s prior to entering into the franchisee application process.
Other Ongoing Fees
The most typical ongoing fees in any franchise concept include royalties and advertising dollars paid back to the franchise. McDonald’s is fairly middle of the road in these fees. Given the number of store in the United States, these can amount to massive advertising dollars to be spent.
Service Fee (Royalty) 4% of Sales
Advertising and Promotion: Not less than 4% of Sales
It is usually important to understand the investment in any restaurant concept. More often, people are interested in the return that you can get on that investment.
From a top-line revenue perspective, McDonald’s is at the top of the food chain, averaging $2,500,000 for each location. Many other burger concepts are lucky to do in the ballpark of $1,500,000. That is 66% higher than the average fast food burger joint!
Other important financial metrics at the store level include a cost of sales of 29.4% and an EBITDAR margin of 23.5%. With average rents in the ballpark of 9-10%, that equates to EBITDA around 12%.
In the end, you can expect store-level EBITDA to be ~$300,000 per location. That isn’t too shabby for flipping burgers!
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So fucking impossible if ur just a guy. Got it. Ima stay fucking broke.
Why am I reading everywhere it should 15-25 percent and you are saying 10 percent?
this is great it’s passive income aswell right? Because you already have a manager running it for you and you can open up more correct me if I’m wrong
There is a location where i believe a little ceasers would do great.
I like people who are you guys
What is the median income for a franchise owner, assuming they take a salary? The $140k figure is profit beyond all operating expenses, including the franchise owner's salary.
I’m interested in buying a little Caesars but don’t quite understand all the way do you offer mentorship
10% post tax
So much invested just to make $144k/ year in profit 💀💀
can you do one for Popeyes?
Don't do it, have you seen who mostly go to Popeye's? They never tip always want refunds
Cool
Hi sir good evening sir Apde A VA Alg Alg Subway ne Frenchay na Alg Alg video Tama mane rooj UA-cam ma mane moklta reju ne sir
Good info just the loud music
Maybe other franchises will follow suite if they aren't already doing it or if bk isn't doing it already
It would be nice if you all could use this money train and all other industries into helping people in the world like maybe having a day or two or three 😂 to contribute to helping people in the world I bet a lot of people would jump at a chance to sponsor that type of movement like people in JERUSALEM OR FOR SAINT JUDES CHILDREN FAMILIES THAT DONT HAVE MUCH !! that would be a movement I'd give great respect and a salute to !! After all who better to do it than the KING OF BURGERS!!! LEAD THE WAY !!!
Best video! Any more in detail on buying subway
Evitda… shut up if you aren’t explain Wtffff it is
Rick Ross got us like ayye yo lemme tap in real quick 😂
why do you multiply by 5 at the end? why 5 units im confused
Exactly
They want you to build 5 stores
That great
That not true
Punch
$440,000 sales and only $41k profits,
Nice work and do business. Let’s work on some quick ideas, hit me up.
I read you get to keep 27% of gross - ??
thank you for your video. if i may ask you "where" did you find the food&paper costs and lavor cost? because i tried many times to find the data but i failed
Nice video with actual numbers. Long overdue on UA-cam. That said, 9% EBITDA is kinda crappy for the risk you take. Is that all these franchises make?!?!
Have you opened one up yourself?
Can you do a thrift store?
I want to open a Subway in Baku, Azerbaijan. Who should I write to?
too much loud music .. gave me headache
Wow, such a widd range of numbers🥰🥰🥰🥰
it's great....if your disabled 😂
The music was very annoying.
I really appreciate your video , can you explain me how should I make a decision of buying a franchise , like for example , I was looking at a food franchise and they were asking for a 150k down for a 350k - 400k asking price, why is that ?
dude, video would have been great if you turned the deafening "background" music down to a reasonable level. sucks, dislike.
0:52 who in their right mind leases commercial property? omg that's so outrageously a recipe for failure.
Literally everyone.
You clearly above your pay grade 😂😂😂 buying a commercial property is silly in most cases
Sorry I stopped watching after 30 seconds, reupload your audio...
Thank you for sharing. for the buying example you gave. how did you reach the 9% EBIDTA. If 920K is total revenue and total expenses is 707.48K, where is the 9% coming from? What am i missing here?
I guess I didn’t clearly lay out what people would consider “other operating expenses” in the P&L. That is what is missing from the costs you are adding up. Think about most concepts as plus or minus 10% margins though. Us usually a safe starting point
So does that mean if you buy a pre owned location you don’t need to pay the franchise fee?
There will be transfer fees … essentially new franchisee fees but those can be negotiated during the sales process.
300k wat aint no way bruh
Way
Great content. Exactly what I was looking for. Thank you
Thanks!
can you share with me the spreadsheet?
I will try and link here
Better without the music
Thank you
Music is TERRIBLE
How is won that haaaaaaaaa shame on you
Belong to gen Assam Salam bajawa
555 subs as of Oct 20th, 2022; road to 1k!
Never delete the videos, just add dates on the right side of the titles, as to when the info was gathered, or the upload was uploaded. 🤓💜
Good idea since the numbers change every year
Hey are you still alive and well? - Going to do more videos? :)
What do you want to know about? Time to ramp up production again!
@@TylerExplains YESS!!! Love the videos, seen you update your website. 💜 I love it, just any and all new content like this in general. 🤓✅
@@TylerExplains I have been looking into franchises a lot lately even though I'm broke at the moment, could you do some for every single fast food / Pizza / restaurant company in the US? Also I seen Ace hardware store may be a franchise, whatever coffee shops are franchised sub places, all that stuff? 🤓😅💜