How much does a McDonald’s franchise cost?
A prospective U.S. franchisee should not use one McDonald’s cost figure for every restaurant format. The 2026 Franchise Disclosure Document discloses an Estimated Initial Investment of $1,472,000 to $2,807,000 for a traditional restaurant, $1,015,500 to $1,864,500 for a Small Town Oil or Small Town Retail location, and $701,000 to $1,411,500 for a Satellite location. These are Item 7 ranges, not a promise that a particular restaurant can be acquired or opened within the range.
Item 7 separates the Estimated Initial Investment into the Initial Franchise Fee; Real Estate and Building; Signs, Seating, Equipment and Decor; Opening Inventory; Miscellaneous Opening Expenses; Travel and Living Expenses While Traveling; and Additional Funds—3 Months. That structure matters because each cost entity has its own payment timing and source of variation.
Traditional McDonald’s restaurant. The range comes from the May 1, 2026 FDD, as amended July 1, 2026. It includes three months of base rent, signs, seating, equipment, decor, opening inventory, miscellaneous opening expenses, training travel and living expenses, and three months of Additional Funds. It does not include percentage rent or royalty payments. Source: McDonald’s USA, LLC 2026 FDD, Item 7, pp. 16–17.
Data basis. Legal franchisor: McDonald’s USA, LLC, a wholly owned subsidiary of McDonald’s Corporation. FDD issuance date: May 1, 2026; amendment date: July 1, 2026. Formats reviewed: traditional, Small Town Oil (STO), Small Town Retail (STR), Satellite, Walmart Satellite, and Business Facilities Lease (BFL). Cost evidence: Items 5, 6, 7, 8, 10, 11 and 17. Information checked July 14, 2026. McDonald’s does not publish the matching current FDD on a verified official franchise-controlled page, so FDD references below are unlinked by Item and page. The brand’s current public materials are available through its official U.S. franchising information.
Key cost figures
The most useful capital figures are the format-dependent entry fee, the equipment package, the three-month working-capital allowance, continuing percentage fees, and the separate personal-funds qualification.
Each teal segment runs from the disclosed minimum to the disclosed maximum on a common $0 to $2,807,000 scale.
Interpretation: the lower Satellite range cannot be applied to a traditional freestanding restaurant; Item 7 treats the formats as separate cost contracts. Source: McDonald’s USA, LLC 2026 FDD, Item 7, pp. 16–17.
The Item 7 totals exclude percentage rent and royalty. They also are not a ceiling for an existing McOpCo restaurant purchase: nine of 35 McOpCo transactions in 2025 exceeded the high end of the disclosed range, by amounts from $53,000 to $1,500,000. Source: 2026 FDD, Item 7, p. 17.
What is included in the initial investment?
The official total combines the Initial Franchise Fee with three months of base rent, the restaurant’s physical and technology package, opening inventory, miscellaneous opening expenses, training travel and living costs, and Additional Funds for the first three months. The table preserves the separate 2026 ranges for traditional, STO/STR and Satellite formats.
| Item 7 expenditure | Traditional | STO / STR | Satellite |
|---|---|---|---|
| Initial Franchise Fee | $45,000 | $22,500 | $0–$500 |
| Real Estate and Building — three months’ Base Rent | $0–$310,000 | $0–$60,000 | $0–$65,000 |
| Percentage Rent rate shown in Item 7 | 0%–29% | 0%–15% | 0%–15% |
| Signs, Seating, Equipment and Decor | $1,100,000–$1,850,000 | $735,000–$1,350,000 | $550,000–$1,050,000 |
| Opening Inventory | $20,000–$39,000 | $16,000–$35,000 | $14,000–$45,000 |
| Miscellaneous Opening Expenses | $55,000–$68,000 | $55,000–$68,000 | $55,000–$68,000 |
| Travel and Living Expenses While Training | $2,000–$43,000 | $2,000–$43,000 | $2,000–$43,000 |
| Additional Funds — three months | $250,000–$452,000 | $185,000–$286,000 | $80,000–$140,000 |
| Official Estimated Initial Investment | $1,472,000–$2,807,000 | $1,015,500–$1,864,500 | $701,000–$1,411,500 |
Source: McDonald’s USA, LLC 2026 FDD, Item 7, pp. 16–17. Special-site base rent may be higher. Percentage rent and royalty are excluded from the Item 7 total.
Which line item drives the range?
For a traditional restaurant, Signs, Seating, Equipment and Decor is the largest disclosed Item 7 category at $1,100,000 to $1,850,000. That category includes the current Technology Platform, which the FDD estimates at $165,000 to $265,000. The range varies with building size, location, expected volume, transportation charges and sales tax.
McDonald’s selects the site, acquires or leases the real estate, and constructs or prepares the building. The franchisee then leases or subleases the premises from McDonald’s and pays for the signs, trade fixtures, equipment, decor and other personal property needed to operate. The official U.S. real estate information confirms that McDonald’s develops restaurants in freestanding and nontraditional settings; the FDD controls the cost terms for the franchise transaction.
What do Additional Funds cover?
Additional Funds are already included in the Item 7 total; they should not be added a second time. For the first three months, the FDD lists employee wages, utilities, payroll taxes, legal and accounting fees, travel, advertising and promotion, outside services, linen, operating supplies, small equipment, maintenance and repair, office supplies, cash shortages, insurance, debt service, non-product purchases and other variable opening costs. The FDD does not identify owner compensation as an included line item. Cold-weather openings may require more capital during the initial three-month period. Source: 2026 FDD, Item 7, p. 17.
Why do McDonald’s cost ranges differ by restaurant type?
The ranges differ because the restaurant format changes the franchise term, space, equipment package, rent structure and Initial Franchise Fee. The lower STO/STR and Satellite totals are not reduced versions of the traditional contract; they are separate formats with separate Item 7 disclosures.
- Traditional restaurant
- Generally a 20-year franchise. The 2026 Item 7 total is $1,472,000 to $2,807,000 and the standard Initial Franchise Fee is $45,000.
- Small Town Oil (STO)
- A full-menu restaurant sharing building space with a convenience store and fuel facility. The term is generally 10 years; the STO/STR Item 7 total is $1,015,500 to $1,864,500.
- Small Town Retail (STR)
- A restaurant anchoring a small retail center in a rural community. STR uses the same Item 7 range as STO but has its own percentage-rent schedule in Item 6.
- Satellite
- A location in settings such as retail stores, airports, universities, malls or hospitals, sometimes with a scaled-down menu. The Item 7 total is $701,000 to $1,411,500.
- Walmart Satellite
- A Satellite format with no Initial Franchise Fee; other Satellite franchisees generally pay $500 and an annual Satellite Fee.
- Business Facilities Lease
- A limited, case-by-case arrangement, generally for three years, that may include a conditional option to buy restaurant assets. The FDD does not publish a separate BFL Item 7 total.
The official franchise FAQ states that new restaurant locations are awarded to existing franchisees in nearly all cases. A new candidate may therefore evaluate an existing restaurant purchase whose price can differ materially from the new-opening cost structure. See the official U.S. franchising FAQ.
When is the money paid?
The payments do not all occur at application or contract signing. The 2026 FDD places major cash outflows across training, pre-opening vendor purchases, the restaurant opening and the first months of operation.
Which fees continue after the restaurant opens?
The core continuing obligations are Royalty, Rent and Advertising and Promotion. Under the Franchise Agreement, McDonald’s USA, LLC charges the Royalty, while the Operator’s Lease governs Monthly Base Rent, Pass Thru Rent and Percentage Rent. McDonald’s also discloses format-specific rent, Satellite Annual Fee, Technology Platform charges and event-triggered costs. Percentage fees are stated only on the FDD’s disclosed Gross Sales basis; they are not converted into annual dollar estimates.
| Fee or obligation | Amount or basis | When paid | Trigger or scope |
|---|---|---|---|
| Royalty | 5% or 4% of Gross Sales | Monthly, tenth day of next month | 5% applies to new restaurants and specified post-2024 transactions; 4% continues for specified existing pre-2024 situations. |
| Base, Pass Thru and Percentage Rent | Varies | Base and Pass Thru: first day; Percentage: tenth day of next month | Restaurant-specific Operator’s Lease and rent structure. |
| Advertising and Promotion | At least 4% of Gross Sales | Spent during each calendar year | Not paid to McDonald’s; qualifying OPNAD and local cooperative spending is credited. |
| Audit / Inspection Fee | Cost of audit | Immediately on billing | Only if an audit or inspection finds Gross Sales understated by at least 2%. |
| Satellite Annual Fee | $500–$2,500 | Each opening anniversary or fixed annual date | Satellite locations. |
| Satellite, STO/STR or BFL Rent | Varies | According to applicable rent schedule | Format-specific; BFL rent is determined case by case. |
| Relocation Contribution | $50,000 | At opening of relocated restaurant | Required when an existing restaurant relocates to a new site. |
Source: McDonald’s USA, LLC 2026 FDD, Item 6, pp. 10–16. “Gross Sales” includes revenue from business conducted at or from the restaurant, excluding sales or use tax.
How does the 4% or 5% Royalty Fee work?
A 5% Royalty Fee applies on and after January 1, 2024 when a franchisee opens a new restaurant, buys a restaurant in a McOpCo sale, or buys a restaurant after McDonald’s exercises a right of first refusal and resells it. A 4% Royalty Fee continues for specified existing restaurants operated by existing franchisees before January 1, 2024, including certain family transfers, new-term agreements, sales between franchisees and rebuilds. Source: 2026 FDD, Item 6, p. 12.
What technology fees are disclosed?
Item 6 lists recurring and one-time charges for the Technology Platform and related digital systems. Most annual technology fees are drafted in 12 monthly installments on the twenty-fifth day through iReceivables; Store Mail is billed annually. One-time charges are associated with installation, construction billing or deployment, depending on the system. All listed technology fees are subject to periodic review and may increase.
Annual amounts only; one-time installation or deployment fees are excluded from this chart. Some systems apply only when deployed or elected.
Interpretation: Edge is the largest disclosed annual technology charge, but the total technology obligation depends on which systems are required, deployed or optional at the restaurant. Source: McDonald’s USA, LLC 2026 FDD, Item 6, pp. 10–12.
Source: McDonald’s USA, LLC 2026 FDD, Item 6, pp. 10–12. The initial Technology Platform itself is included in the Item 7 equipment category, while these Item 6 charges continue or arise when specific technology is installed or deployed.
How much cash or personal capital does McDonald’s require?
McDonald’s currently states that candidates typically need at least $750,000 net in non-borrowed, unencumbered personal funds to acquire and operate an existing restaurant. That amount is a candidate qualification, not the Estimated Initial Investment and not a guarantee of selection.
The official costs of ownership page adds that the $750,000 minimum does not include recommended working capital of at least $100,000 per restaurant or recommended relocation funds of at least $75,000. Foreign-held funds do not count, and primary-residence equity is considered only after the $750,000 minimum is met from other sources. The figures relate to an existing restaurant; a new restaurant, multiple restaurants or certain regions can require more capital.
- Keep the figures separate. The $750,000 personal-funds threshold is not the $1,472,000 to $2,807,000 traditional Item 7 range.
- Confirm the restaurant-specific cash requirement. Existing restaurant purchase price, reinvestment needs, financing terms and working capital can change the amount due at closing.
- Check ownership restrictions. McDonald’s states that partnerships and investors generally are not allowed, subject to case-by-case exceptions.
- Verify relocation funding separately. The official recommendation is $75,000, while an FDD Relocation Contribution of $50,000 applies only when an existing restaurant is moved to a new site.
The current candidate criteria and limitations are also described on the official candidate criteria page.
Does McDonald’s finance the franchise investment?
Typically, McDonald’s does not offer financing. The 2026 FDD says McDonald’s Corporation may, at its discretion, guarantee certain Bank of America loans for approved purposes such as remodeling, acquiring restaurant businesses, exercising a BFL asset-purchase option or other approved uses. This is a disclosed relationship, not guaranteed approval.
- Guarantee fee
- Currently 1.50% of the average outstanding balance, paid in consideration for the guarantee.
- Rate formula
- Term SOFR plus the SOFR adjustment, currently 0.10%, plus an initial 3.00% lender/franchisor spread that is subject to change.
- March 30, 2026 disclosure
- Term SOFR was 3.76%, inclusive of the 0.10% adjustment, and the disclosed APR was 6.76%.
- Typical term and collateral
- Three to five years, secured by restaurant equipment, seating, signage, decor and inventory.
- Guarantees and default
- A personal guarantee from the franchisee and spouse is required; loan default is also a default under the Franchise Agreement.
Source: McDonald’s USA, LLC 2026 FDD, Item 10, pp. 21–22. Rate inputs and lender terms are time-sensitive and must be rechecked in the current transaction documents.
Which obligations can increase the cost later?
Several obligations arise only after a specific event, restaurant change or technology deployment. These amounts should not be inserted into every opening budget, but they can become material during the franchise term.
- Optional real-estate co-investment. An eligible franchisee may pay additional money to reduce stated Percentage Rent in 0.25-point increments. The FDD says the amount generally will not be less than $30,000 per “Quarter,” is additional to Item 7, and is not financed by McDonald’s.
- Technology replacement and upgrades. Hardware and software may need replacement, updating or upgrading during the term. The FDD places no contractual limit on the frequency or cost.
- Relocation. A relocated restaurant pays the $50,000 Relocation Contribution at opening, may have a new rent structure, and may qualify for a credit against part of the previously paid Initial Franchise Fee.
- New-term franchise. There is no contractual right to renew. A new-term offer can carry different Percentage Rent and conditions involving reinvestment, rebuilds, relocations or real-estate issues.
- Transfer. A transfer requires approval, and the new franchisee’s Royalty Fee can increase to the current rate except in the circumstances retained at 4% under Item 6.
- Termination or non-renewal. The Operator’s Lease can require continuing rent after termination, and the franchisee may have to remove equipment and fixtures or sell specified assets to McDonald’s at fair market value.
Sources: 2026 FDD, Item 6, pp. 13–16; Item 11, pp. 24–25; Item 17, pp. 31–34. The FDD does not disclose a standard renewal fee or standard transfer fee in Item 6, but the economic terms can still change.
Request the restaurant-specific Operator’s Lease, rent schedule, equipment list, reinvestment requirements, technology deployment list and closing statement. Those documents determine which conditional costs become actual obligations for the location.
What should a buyer take from the 2026 cost disclosures?
For a traditional McDonald’s restaurant, the verified 2026 Item 7 range is $1,472,000 to $2,807,000, but the cost decision is location- and transaction-specific. The largest opening category is Signs, Seating, Equipment and Decor; three months of Additional Funds are included in Item 7; percentage rent and royalty are excluded; and an existing restaurant purchase can exceed the published high end. The separate $750,000 net personal-funds threshold is a candidate qualification for an existing restaurant, not a substitute for the investment range. The unresolved figure that matters most is the restaurant-specific purchase price and rent structure.