McDonald’s

About McDonald’s

McDonald’s is an American multinational fast-food corporation, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in California. They turned the company into a franchise in 1953, and the following year, businessman Ray Kroc joined the company as a franchise agent and proceeded to purchase the chain from the McDonald brothers in 1961.

The world’s largest restaurant chain by revenue, McDonald’s has more than 38,000 outlets in over 119 countries worldwide, and as of 2020, had the ninth-highest global brand valuation. The vast majority are franchised locations, which includes sites franchised to conventional franchisees, developmental licensees and foreign affiliates. While the company owns all the land on which its US restaurants are situated and earns a significant portion of its revenue from rental payments from franchisees, the UK and Ireland business model is different in that fewer than 30% of restaurants are franchised, with the majority under the ownership of the company.

In April 2022, McDonald’s took control of its largest UK franchisee, the Appt Corporation, which had grown to 43 sites, after completing a deal to buy out founder Atul Pathak’s shares. In December 2022, McDonald’s started trialling a new smaller to-go format in the US, aimed at order-ahead app users. In December 2023, the company launched CosMc’s, its new, small-format, beverage-led restaurant concept, in the US, and said expects to open nearly 10,000 restaurants over the next four years, the fastest period of growth in the company’s history.

In March 2024, Ian Borden, McDonald’s chief financial officer, said the brand is seeing “strong momentum” in the UK, and in June 2024, the brand ended its AI drive-thru trials in the US. In December 2024, McDonald’s launched a new prototype “On-the-Go” store in the US, which is tailored for digital and drive-thru orders and has a smaller footprint, no lobby and no dine-in option.

In February 2025, Kempczinski said the brand “still has work to do in the UK” following a sales drop here in the fourth quarter of 2024. He said: “It’s one that historically has performed quite well for us, been one of our strongest performers. We’re not seeing the UK business perform certainly at a level that we’re used to historically. That said, we understand what needs to go in place, and there’s been a lot of work with our local franchisees there to do that.”

The following month, McDonald’s was named the world’s most valuable restaurant brand, according to a new “Restaurants 25 2025” report from valuation consultancy Brand Finance. In April 2025, McDonald's UK & Ireland hired Mike Spencer as its new vice-president for development, as it targeted 40 new openings this year. The following month, the company pulled the plug on its CosMc’s spin-off.

In August 2025, Kempczinski said the company is introducing initiatives to improve its UK performance but recognises it will take time. That same month, Alistair Macrow stepped down as chief executive of McDonald’s UK and Ireland, to be replaced by Lauren Schultz, who was in charge of 1,200 restaurants and 180 franchisees in the US.

Macrow said: “As chief executive of McDonald’s UK & Ireland, I’ve had the honour of leading through a post-covid world, rising costs and evolving customer expectations. I’ve seen first-hand the resilience of our people and the strength of our market. I’m so proud that over the past five years, our growth has been three times that of our nearest competitor, which is a true testament to the dedication of our teams and franchisees.”

In October 2025, Mike Spencer, McDonald’s UK & Ireland’s vice president of development, has said 2025 has proven to be a “landmark year” for the brand’s restaurant development here. The following month, Spencer told the Propel Multi-Club Conference the brand also sees lots of opportunity for further growth in the UK and Ireland. He said: “We see another 400 to 500 restaurants in the UK. When we look at other markets globally, the penetration is deeper than it is in the UK at the moment. A lot of those will be in urban areas where the populations are. So, we’re looking at smaller formats.

“To access those and to make the economic model work, we have bumped up against the capabilities and capacity of the kitchen, which is so strong in terms of the volumes it can deliver, but obviously it requires a certain amount of space to be able to do that. So, if we restrict that, then we end up capping the sales potential. But if we take it to its full zenith, then it becomes more space than you perhaps require in those locations.”

In June 2026, McDonald's started rolling out a new corporate strategy called “McDonald’s Next”, focusing on increasing automation, raising standards for hospitality, leaning on social media for marketing and upgrades in its menu. McDonald’s will also start offering a new prototype for upcoming store remodels. It also said it is testing a new AI drive-thru system called Archy at five US locations, designed to speed up service and streamline restaurant operations.

Why franchise with McDonald’s

• ✓In the past 15 years, McDonald’s has almost tripled the amount of franchised restaurants, as well as grown the cash flow and top line sales within the restaurants. A franchisee will need to make a significant up-front financial investment, which means having at least £100,000 in unencumbered funds.
• ✓The minimum financial requirement is 25% of the total investment in unencumbered funds, and the remaining 75% investment can be funded by a bank. McDonald’s has a number of long-standing relationships with banks, which can lend to franchisees, offering investment opportunities that perhaps otherwise wouldn’t be available.
• ✓All franchisees are supported by a network of consultants and complete a training programme before they take control of their restaurant. Across the course of the programme, they build their knowledge, gain the experience and learn the skills necessary. Franchisees, senior executives and marketing experts work together to try to achieve a maximum return on investment from the marketing budget, with an importance based on innovating with new menu items.
• ✓For 80% of restaurants franchised in 2018, the cost of purchasing the franchise rights and equipment was between £350,000 and £1.85m, and this was priced on profitability over a 10-year period. The monthly fees payable by 80% of restaurants franchised between May 2018 and June 2019 ranged between 12.25% and 21% of that restaurant’s net sales. Typically, this rent is fixed for 20 years on the initial term.
• ✓Rent is calculated over a 10-year period, factoring in projected sales and projected profitability. There is an additional monthly service fee of 5% of net sales, as well as a contribution to the marketing fund, which is currently set at 4.3% of net sales.
• ✓Typical cash flow after first year is £50,000-£500,000, and typical return on investment over 20 years is 20-25%. Franchisees purchase the equipment and rights to operate a restaurant from a location for a set term, with the challenge to maximise its sales and profitability over 20 years. McDonald’s only franchises one restaurant at a time to new franchisees, but additional sites can be taken on if “consistently high standards” are met.