Author Topic: What it Costs to Start a McDonalds  (Read 980 times)

Ben

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What it Costs to Start a McDonalds
« on: October 15, 2018, 08:43:19 AM »
This was surprising to me. The startup costs not so much as the estimated annual income.

I'm not sure I'd want a McDonalds and all the headaches that would go with it for only $150K/yr.

$2mil*5% = $100K if that money goes into even a very conservative index fund or similar. Way more if you figure a 20-30 year S&P run. And all the work you're doing is getting up to refill your martini glass.

https://www.foxbusiness.com/retail/mcdonalds-franchise-cost

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Jamisjockey

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Re: What it Costs to Start a McDonalds
« Reply #1 on: October 15, 2018, 08:52:29 AM »
Income is the downfall to franchises.  You can only run them at $xxx capacity and earn $xxx a year.  The best you can hope for is to max out profitability and sell the franchise for additional profit.  But many are time-sinks. 
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Ben

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Re: What it Costs to Start a McDonalds
« Reply #2 on: October 15, 2018, 09:00:05 AM »
Income is the downfall to franchises.  You can only run them at $xxx capacity and earn $xxx a year.  The best you can hope for is to max out profitability and sell the franchise for additional profit.  But many are time-sinks.  

Yeah, the article didn't mention potential profits from building and selling the franchise, which would put the investment more in line with real estate, where you might not be making a big annual income, but are banking on appreciation.

Still (and again, the article was sparse) it seems like a Jesus Chicken would be a better investment if you want the work of a fast food joint.
« Last Edit: October 15, 2018, 09:33:44 AM by Ben »
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sumpnz

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Re: What it Costs to Start a McDonalds
« Reply #3 on: October 15, 2018, 09:00:44 AM »
Isn't $150k the guaranteed minimum if you run the place their way?  I seem to remember that being part of the model.

But yeah, probably not the best investment once you include your time.

grampster

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Re: What it Costs to Start a McDonalds
« Reply #4 on: October 15, 2018, 09:32:27 AM »
Iirc, $50,000 got you a McDonalds franchise in the mid 70's.
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Re: What it Costs to Start a McDonalds
« Reply #5 on: October 15, 2018, 09:45:13 AM »
You can’t get into a Jesus Chicken franchise without lots of Jesus Chicken experience. That’s why the franchise fee is so low

There is constant advertisements for Snap On, MAC, Matco, and Cornwell franchises in my industry and the terms absolutely suck for the franchise...if you are good, lucky, and have a good route you might make it if you lack any or all of those you will lose your shirt and then some
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Fly320s

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Re: What it Costs to Start a McDonalds
« Reply #6 on: October 15, 2018, 10:01:09 AM »
You can’t get into a Jesus Chicken franchise without lots of Jesus Chicken experience. That’s why the franchise fee is so low

Chik-fil-a has very high standards and is very strict about who they allow to have a franchise.  The upfront cost for the franchisee is next to nothing, but Chik-fil-a controls every aspect of the build, location, and ownership.

I looked into their franchise about 10 years ago and new there was no chance of me getting a franchise.
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Re: What it Costs to Start a McDonalds
« Reply #7 on: October 15, 2018, 10:23:54 AM »
I'm sure your Church of Satan membership card that you included with your application didn't help.
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brimic

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Re: What it Costs to Start a McDonalds
« Reply #8 on: October 15, 2018, 10:38:28 AM »
From my understanding of it, and from what I've seen locally- you need to own 4-5 McDonald's franchises to make it worthwhile.
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Re: What it Costs to Start a McDonalds
« Reply #9 on: October 15, 2018, 12:15:36 PM »
Exactly. Multiple franchises and paying someone to run the day to day is where it's at.  Otherwise you're just a glorified store manager.
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Fly320s

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Re: What it Costs to Start a McDonalds
« Reply #10 on: October 15, 2018, 12:57:58 PM »
I'm sure your Church of Satan membership card that you included with your application didn't help.

Hey, they asked for church affiliations.  They didn’t say what kind of church.
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just Warren

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Re: What it Costs to Start a McDonalds
« Reply #11 on: October 15, 2018, 01:24:34 PM »
I'd rather have a White Castle as in my town there are three McDs already.

Also three BKs so I'd stand out by being different.

But they don't franchise so I'd have to call it Whitey Castle or White Stronghold or something like that.
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Hawkmoon

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Re: What it Costs to Start a McDonalds
« Reply #12 on: October 15, 2018, 02:26:44 PM »
In this neck o' the woods, basically ALL the McDonalds are owned by one or the other of two franchisees, one of whom is Hispanic. Take that $150,000/annum and multiply it by twenty or thirty locations, and suddenly you're looking at some real money.
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Hawkmoon

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Re: What it Costs to Start a McDonalds
« Reply #13 on: October 15, 2018, 02:30:40 PM »
You can’t get into a Jesus Chicken franchise without lots of Jesus Chicken experience. That’s why the franchise fee is so low


Incorrect. There aren't many Chick-fil-As around here, so when one opens it generates a lot of press. Since there were none here a very few years ago, clearly the people who bought the franchises had no prior experience.  It's not a requirement, and I'm not even convinced that corporate would welcome it. They seem to be more interested in finding one-person/one store franchisees rather than the chain franchisees like the McDonalds around here.
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Doggy Daddy

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Re: What it Costs to Start a McDonalds
« Reply #14 on: October 15, 2018, 02:43:17 PM »
from https://www.chick-fil-a.com/Franchising/Franchise


Take the next step
The Chick-fil-A franchise opportunity represents an exceptional offering in the quick-service restaurant industry. For an initial financial fee of $10,000 selected franchisees (who we call Operators) are granted the rights necessary to operate a franchised Chick-fil-A Restaurant business. Chick-fil-A, Inc. is also looking for people interested in franchised locations in Canada for an initial investment of $15,000 (CAD). The Chick-fil-A franchise opportunity requires that the individual be free of any other active business ventures and operate the restaurant on a full-time, hands-on basis.

Chick-fil-A Operators must successfully complete an extensive, multi-week training program prior to taking over operation of a franchised Chick-fil-A restaurant business. With additional development courses and franchise support available, Chick-fil-A Operators are equipped to handle decisions and reap the rewards of a challenging business.
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Re: What it Costs to Start a McDonalds
« Reply #15 on: October 15, 2018, 06:53:11 PM »
Challenging business doesn’t even begin to describe the restaurant industry.

It sucks you of your soul.


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Devonai

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Re: What it Costs to Start a McDonalds
« Reply #16 on: October 16, 2018, 03:52:35 PM »
Dairy Queen is $400k.
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Hawkmoon

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Re: What it Costs to Start a McDonalds
« Reply #17 on: October 16, 2018, 10:22:39 PM »
Dairy Queen is $400k.

Dairy Queen still exists?
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Perd Hapley

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Re: What it Costs to Start a McDonalds
« Reply #18 on: October 17, 2018, 12:54:53 AM »
Dairy Queen still exists?

What is this hellish, North Korea landscape you inhabit? No Dairy Queen?
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Calumus

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Re: What it Costs to Start a McDonalds
« Reply #19 on: October 17, 2018, 02:03:57 AM »
There is constant advertisements for Snap On, MAC, Matco, and Cornwell franchises in my industry and the terms absolutely suck for the franchise...if you are good, lucky, and have a good route you might make it if you lack any or all of those you will lose your shirt and then some

A good friend of mine just closed his 10 month old matco franchise last month. I warned him that from what I read, matco makes more on franchising than actual tool sales; but they have some really good sales reps trying to bring people on board.