For one traditional U.S. McDonald’s franchised restaurant open at least one year, a defensible 2025-based analytical range is approximately $167,000 to $453,000, with a base scenario of about $316,000. The range combines residual business cash with a market-value estimate for the full-time management labor performed by the owner.
This owner-earnings range is an independent analytical scenario, not an Item 19 financial performance representation by McDonald’s USA, LLC. It combines identified FDD facts with separately identified rent assumptions and a U.S. Bureau of Labor Statistics manager-pay benchmark. Actual results can differ materially by location, restaurant format, sales, labor, occupancy, financing, owner involvement, reinvestment, and execution.
- Legal franchisor
- McDonald’s USA, LLC, a wholly owned subsidiary of McDonald’s Corporation. See the official McDonald’s U.S. franchising overview.
- Disclosure document
- 2026 U.S. Franchise Disclosure Document, issued May 1, 2026 and amended July 1, 2026.
- Item 19 status
- Official Product Sales and Operating Income Before Occupancy Costs for traditional franchised restaurants, using 2025 results.
- Applicable population
- Independent franchisee traditional restaurants open and operated by a franchisee for at least one year; Satellites, McOpCo restaurants, and specified ownership-change restaurants were excluded from the pro forma cohort.
- External benchmark
- BLS Food Service Managers, 2024 median annual pay of $65,310.
- Date checked
- July 14, 2026.
2025 median for 12,212 domestic traditional franchised restaurants open at least one year.
Revenue, not owner earnings, for the same traditional franchised population open at least one year.
Item 19 pro forma measure at $3.0M-$3.4M of Product Sales.
Independent traditional franchised restaurants used for the earnings presentation.
The current rate for specified new restaurants and transactions; some existing-restaurant transfers retain 4%.
BLS 2024 median pay for Food Service Managers, used only to value active management labor.
What does McDonald’s Item 19 actually measure?
Officially, the 2026 FDD reports Operating Income Before Occupancy Costs of $732,000, $795,000, and $864,000 at Product Sales levels of $3.0 million, $3.2 million, and $3.4 million, respectively. These figures apply to 2025 results for independent traditional franchised restaurants open and operated by a franchisee for at least one year.
The measure is not final owner income. Item 19 says Other Operating Expenses include labor, the franchisee’s salary as manager, payroll taxes, advertising, utilities, repairs, insurance, taxes on property, and other restaurant costs. The measure explicitly excludes rent, royalty, depreciation and amortization, interest, and income taxes. Those exclusions are why the official figure cannot be relabeled as take-home pay.
The FDD’s $3.887 million median and $4.057 million average are annual sales. The stronger earnings evidence is the separately defined Operating Income Before Occupancy Costs measure, and even that still requires rent and royalty deductions before estimating residual business cash.
The three disclosed pro forma results rise with Product Sales, but all remain before rent, royalty, D&A, interest, and income taxes.
Interpretation: Item 19 provides a broad same-brand earnings measure, but the chart stops at the FDD’s disclosed $3.4 million pro forma level rather than extrapolating to the higher system median or average.
Source: 2026 McDonald’s FDD, Item 19, pp. 34-36. Values shown in the FDD are rounded to the nearest thousand dollars.
How does the estimate reach annual owner earnings?
Estimated owner-operator benefit ranges from $167,310 to $453,310 in the three scenarios. The calculation begins with the official 2025 Operating Income Before Occupancy Costs, subtracts the applicable 5% royalty and a clearly labeled effective-rent assumption, then adds a $65,310 labor-value proxy because the owner’s manager salary was already included as an expense in the Item 19 pro forma.
- Conservative: $3.0 million Product Sales, official $732,000 Operating Income Before Occupancy Costs, 5% royalty, and 16% modeled effective rent.
- Base: $3.2 million Product Sales, official $795,000 Operating Income Before Occupancy Costs, 5% royalty, and 12% modeled effective rent.
- Upside: $3.4 million Product Sales, official $864,000 Operating Income Before Occupancy Costs, 5% royalty, and 9% modeled effective rent.
Each column includes residual business cash plus the BLS manager-labor proxy; it is not after-tax take-home pay.
Interpretation: The scenario spread is driven more by modeled occupancy cost than by the $400,000 spread in Product Sales. The columns are analytical cases, not probabilities or franchisor forecasts.
Sources: 2026 McDonald’s FDD, Items 6 and 19, pp. 10-15 and 34-36; BLS Food Service Managers pay benchmark. Chart labels are rounded to the nearest $1,000.
| Scenario | Residual business cash | Owner labor-value proxy | Owner-operator benefit |
|---|---|---|---|
| Conservative | $102,000 | $65,310 | $167,310 |
| Base | $251,000 | $65,310 | $316,310 |
| Upside | $388,000 | $65,310 | $453,310 |
Formula: official Operating Income Before Occupancy Costs - royalty - modeled effective rent = residual business cash; residual business cash + manager-labor proxy = estimated owner-operator benefit. The result remains before depreciation, interest, income taxes, loan principal, capital expenditures, and nonrestaurant portfolio overhead.
How does active owner involvement change the result?
Active owner involvement adds labor compensation to the economic benefit, but it does not create passive profit. The 2026 FDD’s Item 15 requires the franchisee to provide full-time and best efforts plus personal on-premises supervision of day-to-day operations, so a passive manager-run model is not the appropriate default for this U.S. offer.
The Item 19 pro forma already deducts “franchisee’s salary as manager” inside Other Operating Expenses, but it does not disclose the amount. The $65,310 BLS median is therefore used only as a transparent proxy for the value of the owner’s management work. It is not a McDonald’s salary disclosure and is not guaranteed cash compensation.
In the base case, the restaurant produces an estimated $251,000 of residual business cash after royalty and modeled rent. Adding the $65,310 management-labor proxy produces $316,310 of owner-operator benefit. Roughly one-fifth of that total is compensation for work, not passive return on capital.
The official McDonald’s training and support page also emphasizes hands-on restaurant management. A buyer should compare the FDD’s owner-supervision obligation with the actual staffing structure of the specific restaurant and with the owner’s intended weekly role.
Why can rent move owner earnings more than sales?
Rent is the largest unresolved driver because the official Item 19 earnings measure excludes it. Item 6 says new and relocated traditional restaurants opening on or after January 14, 2026 generally have Percentage Rent between 6% and 23% of Gross Sales, with Monthly Base Rent and possible Pass Thru Rent; Item 19 reports a 2025 effective-rent range of 0.00% to 33.37% across franchised restaurants.
The 9%, 12%, and 16% effective-rent inputs are editorial scenario assumptions inside the disclosed range. They are not FDD averages, medians, quoted lease terms, or probabilities. The specific lease and restaurant economics control.
| Base-sales rent sensitivity | Modeled rent at $3.2M sales | Residual business cash | Owner-operator benefit |
|---|---|---|---|
| 9% effective rent | $288,000 | $347,000 | $412,310 |
| 12% effective rent | $384,000 | $251,000 | $316,310 |
| 15% effective rent | $480,000 | $155,000 | $220,310 |
| 18% effective rent | $576,000 | $59,000 | $124,310 |
Royalty treatment also matters. The model uses 5%, which Item 6 applies to specified new restaurants and transactions. A qualifying 4% royalty would improve annual residual cash by approximately $30,000 to $34,000 across the three disclosed sales levels. The official ownership-cost page correctly notes that profitability depends on the individual situation and directs prospects to speak with franchisees.
The model does not separately subtract every Item 6 technology fee because Item 19 does not isolate which recurring store-level fees are already captured in Other Operating Expenses. Subtracting them without substantiation could double count. The written Item 19 substantiation and the target restaurant’s statements should resolve that treatment.
Which restaurants are represented—and which are not?
The official evidence is broad for one format but not universal. Item 19’s sales statistics cover approximately 12,212 domestic traditional franchised restaurants open at least one year as of December 31, 2025, while the pro forma earnings cohort covers 11,512 independent franchisee traditional restaurants open and operated by a franchisee for at least one year.
| Population | Restaurant count | Use in this article |
|---|---|---|
| All franchised U.S. outlets at year-end 2025 | 13,062 | System context from Item 20; includes formats not used in the earnings model. |
| Traditional franchised restaurants open at least one year | 12,212 | Official 2025 average, median, range, and sales-threshold population. |
| Independent traditional restaurants in the pro forma | 11,512 | Official Product Sales and Operating Income Before Occupancy Costs evidence. |
McOpCo company restaurants, Satellites, and specified restaurants that changed owners in 2025 are not part of the pro forma statements. STO, STR, Satellite, Walmart, and BFL formats have materially different investment, rent, term, or operating structures and should not be assigned this traditional-restaurant earnings range without format-specific evidence.
Company-operated results are also not silently blended with franchised economics. McDonald’s provides separate corporate financial reporting through its official financial information and annual reports, but those consolidated results are not a substitute for one franchisee restaurant’s owner earnings.
What should a buyer verify before relying on this range?
A buyer should treat the $170,000-$450,000 range as a screening estimate, then replace every scenario input with restaurant-specific evidence. The most important documents are the Item 19 written substantiation, the exact lease and royalty terms, and multi-year operating statements for the restaurant being considered.
- Item 19 substantiation: Ask how Product Sales, Cost of Sales, Other Operating Expenses, franchisee salary, advertising, and excluded costs were mapped into the pro forma.
- Occupancy: Obtain Monthly Base Rent, Percentage Rent, Pass Thru Rent, scheduled increases, co-investment adjustments, and the actual effective-rent percentage for each recent year.
- Royalty: Confirm in writing whether the transaction carries a 4% or 5% rate and whether any future event changes it.
- Owner compensation: Separate salary or payroll paid for the owner’s labor from distributions and retained business profit.
- Financing and reinvestment: Model interest, loan principal, equipment replacement, remodel obligations, and working-capital needs separately from operating earnings.
- Franchisee interviews: Compare multiple current and former operators with similar sales, geography, lease structure, restaurant age, and ownership scale.
The FTC Franchise Rule Compliance Guide explains why financial performance information must have a reasonable basis and why representations outside Item 19 are restricted. Personal income taxes are intentionally excluded here because entity structure, jurisdiction, deductions, and owner circumstances vary.
What is the strongest defensible earnings takeaway?
The strongest defensible range is approximately $170,000 to $450,000 per year of estimated owner-operator benefit for one traditional franchised restaurant at the FDD’s $3.0 million-$3.4 million Product Sales levels. It is scenario-based, while the underlying $732,000-$864,000 Operating Income Before Occupancy Costs figures are official Item 19 results.
The most important earnings driver is occupancy cost, because Item 19 excludes rent and the FDD shows wide variation in effective rent. The largest unresolved uncertainty is the target restaurant’s actual lease economics and how owner salary, recurring technology charges, capital spending, and financing appear in its statements. Before making a decision, verify Item 19 substantiation, exact contract terms, and comparable franchisee records rather than treating the base scenario as an expected outcome.