McDonald’s Franchise Cost in India and Profit Margin, How to Get & How Much McDonald’s Franchise Earn:
Starting your own business today is a challenging and extremely difficult task. But still, if you want to start your own business then you can start your business by taking McDonald’s Franchise. McDonald’s Franchise is one of the best global chains of quick service restaurants in the entire world.
In this article, we are going to tell you about How to get McDonald’s Franchise, How much McDonald’s franchises earn, McDonald’s franchise Profit Margin and McDonald’s franchise cost in India.
A franchise grants individuals the right to trade and sell products of an already established brand for a specified period of time, in return for royalty payments. When it comes to opening a franchise in the fast-food market, McDonald’s franchises are the first franchise brand to come to mind.
Because it comes across as a reliable and excellent option. McDonald’s started as a grill restaurant in the 1940s. But today it has become one of the most prosperous chains of fast-food restaurants in the world.
McDonald’s Franchise Cost in India
The minimum investment required for any person to start a McDonald’s franchise in India can range from INR 1.5 Crore to INR 2 Crore, which usually depends on the type of restaurant and factors like furniture cost, seating table, television, etc. that affect overall investment. But having an amount of 1.5 to 2 crores is not enough to buy a franchise. As per the company’s norms, a franchise owner should have a total of Rs 10 crore including franchise investment as working capital for the restaurant.
This is because this requirement is in keeping with the volatile nature of the markets and trends. Because there may be times when the outlet is loss-making due to market volatility, and having adequate working capital ensures that the franchisee can sustain the business during challenging periods and avoid losses. The cost for the franchise is as follows in the table below:-
| Expenditure | Amount |
|---|---|
| McDonald’s Franchise Fee | 30 lakh rupees |
| Civil Work Cost | 12 lakh rupees |
| Furniture Cost | 20 lakh rupees |
| TV, Hoardings, Signage, Reception | 15 lakh rupees |
| Furniture and Chair | 8 lakh rupees |
| Other interior Cost | 10 lakh rupees |
| Machinery Cost | 35 lakh rupees |
| Other Costs (Training, Transportation, and Licencing) | 20 lakh rupees |
| Total minimal Investment | 1.5 crore rupees |
Where can you open McDonald’s Franchise?
McDonald’s restaurant franchises can be opened in four places. About which we have discussed below:-
- Traditional Restaurant: – Traditional restaurants are opened at such locations as food courts, freestanding buildings, storefronts, etc. These franchises are usually granted for 20 years, after which they have to be renewed again.
- Satellite location:- Various places like airports, colleges, and hospitals come under this area. Franchises that operate within these premises are called satellite location franchises. Additionally, these franchisees may have non-McDonald’s branded products sold alongside McDonald’s products.
- STO (STO) and STAR (STOR) locations:- In smaller towns, restaurants that open at fuel stations tend to be located in the same area. You must have seen many such places in India where there is a petrol pump on one side and a McDonald’s restaurant on the other side. The franchise agreement for such STO and STR locations is usually for a period of 10 years. You can open a franchise at these places only for 10 years, after that, you will have to renew the franchise again.
- Mcdonald’s business facility lease:- The franchise is offered to lessees, including business facilities. Similarly, the BFL-type franchise is granted for only 3 years.
Mcdonald’s Franchise Profit Margin in India
If you want to take McDonald’s franchise in India and wondering what is the Mcdonald’s Franchise profit margin. McDonald’s franchise profit margin can vary depending on various factors, including franchise location, operating costs, competition, and local market conditions. Following are the exact profit margin figures we have provided for McDonald’s Franchise in India.
In general, fast-food franchises such as McDonald’s generate good revenue and profit margins for franchise holders due to their strong brand recognition, standardized operations, etc. Operating costs in a Mcdonald’s franchise, including rent, labor, materials, and marketing expenses, can all have a significant impact on the profit margin of Mcdonald’s Franchise. “McDonald’s Franchise Cost in India and Profit Margin, How to Get & How Much McDonald’s Franchise Earn”
| Particulars | Best Case Sales (in Rupees) | Average Case Sales (in Rupees) | Worst Case Sales (in Rupees) |
|---|---|---|---|
| Gross Franchise Monthly Sales | 16,00,000 | 10,00,000 | 5,00,000 |
| Raw Food Cost @ 35% | -5,60,000 | -3,50,000 | 1,75,000 |
| Shop Rent | -1,20,000 | -1,00,000 | -80,000 |
| Electricity & water bills | -30,000 | -20,000 | -15,000 |
| Employees Salaries | -2,20,000 | -2,00,000 | -1,30,000 |
| Online Aggregator Commissions | -40,000 | -30,000 | -20,000 |
| Royalty Fee @4%+GST | -1,51,000 | -94,400 | -47,200 |
| Advertisement Fee @4%+GST | -1,51,000 | -94,400 | -47,200 |
| Transportation | -24,000 | -20,000 | -18,000 |
| Other expenses (Software, Store Maintenance, etc.) | -40,000 | -40,000 | -30,000 |
| Net Monthly Profit | 3,85,000 (24% of sales) | 1,46,000 (14.6% of sales) | -15,200 (-3% of sales) |
Required Space for McDonald’s Franchise
One of the important problems of opening a franchise is the need for space, as it is very important to have enough space to open a franchise. McDonald’s franchisees require a suitable area that will facilitate the company’s various operations such as loading, unloading, packaging, parking, and branding.
Ideal locations for McDonald’s franchisees include malls, hospitals, colleges, and schools. McDonald’s requires a minimum land area of 1500-4000 square feet to ensure smooth business operations. “McDonald’s Franchise Cost in India and Profit Margin, How to Get & How Much McDonald’s Franchise Earn”
How to get McDonald’s Franchise
- To get Mcdonald’s Franchise first go to Mcdonald’s official website.
- For the North and East regions, reach out to Mr. Vikram Bakshi, the regional head responsible for these locations. For the South and West regions, get in touch with Mr. Amit Jatia.
- Before that read the franchise disclosure documents carefully.
After reading the franchise disclosure, make sure you meet all the eligibility criteria, which include business experience, adequate financial resources, and a strong entrepreneurial background.
After this apply for McDonald’s Franchise.
If your application is shortlisted, you will be called by McDonald’s office in person for further discussion and a personal interview.
- If you are selected for the McDonald’s franchise, you will need to sign a franchise agreement and pay the required fee and royalties.
- After getting the franchise, you will be given training, after that, you can start your franchise.
FAQs
Mcdonald’s franchise cost is around 25 lakhs.
Mcdonald’s charges a 4% fee from the franchise owners in exchange for their brand.
It may cost around 1.5 crore to 2 crore to open Mcdonald’s franchise in India.
It depends on which franchise you have taken, usually, McDonald’s franchise is available for 3 years to 20 years.
