McDonald's is one of the most recognized franchise systems on the planet, with more than 40,000 locations operating in over 100 countries. For aspiring franchise owners in the United States, owning a McDonald's restaurant represents a rare opportunity to operate inside a proven, globally trusted brand with built-in customer demand. But the path to ownership is not cheap. The total investment required to open a McDonald's franchise runs from approximately $1.4 million to over $2.5 million, making financing an essential piece of the equation for virtually every prospective franchisee.
Understanding the full cost picture and the financing options available is the first step toward turning a McDonald's ownership goal into a reality. Whether you are exploring SBA loans, conventional business financing, or specialty franchise lending products, there are paths available for qualified buyers. At Crestmont Capital, we help business owners across the U.S. navigate franchise financing with speed, transparency, and access to capital that moves as fast as your ambitions.
This guide covers everything you need to know about McDonald's franchise costs, available loan products, qualification criteria, how Crestmont Capital can support your journey, and real-world scenarios that show what financing a McDonald's franchise actually looks like in practice.
In This Article
McDonald's Corporation operates through a franchise model, meaning that the vast majority of its U.S. restaurants - approximately 95% - are owned and operated by independent franchisees. The company itself provides the brand, systems, supply chain, training infrastructure, and global marketing engine. Franchisees operate under a license agreement and pay ongoing royalties and fees in exchange for the right to run a McDonald's restaurant.
Founded in 1940 in San Bernardino, California, and franchised aggressively starting in the 1950s by Ray Kroc, McDonald's has grown into the world's largest fast food chain by revenue. As of recent reporting from Forbes, McDonald's consistently ranks among the top franchise opportunities globally in terms of brand recognition, revenue potential, and system support.
McDonald's franchises in the United States are primarily sold through two channels. The first is the purchase of an existing restaurant from another franchisee (a resale), and the second is the development of a new location when McDonald's approves new store openings in specific markets. In both cases, the franchisee must meet McDonald's strict financial, operational, and personal qualifications before being approved.
Unlike some franchise systems that use area representative models or semi-absentee ownership structures, McDonald's expects its franchisees to be actively involved in day-to-day operations, at least initially. McDonald's requires a training period of 12 to 18 months before a new franchisee can take ownership of a restaurant, and much of that training is hands-on in a working restaurant environment. The U.S. Small Business Administration recognizes McDonald's as an eligible franchise under its SBA Franchise Directory, which makes SBA-backed loans available to qualified buyers.
Key Franchise Facts
The total investment required to become a McDonald's franchisee is substantial. Understanding each cost component is critical before approaching any lender or financing partner. Below is a detailed breakdown of what to expect.
McDonald's charges a standard initial franchise fee of $45,000. This fee grants you the right to operate a single McDonald's restaurant for an initial term of 20 years. This amount is paid directly to McDonald's Corporation and is typically not financed - it is expected as part of your liquid capital contribution.
McDonald's offers franchisees two primary purchasing paths. A conventional arrangement involves buying an existing restaurant from a current franchisee or purchasing a new site. A business facility lease (BFL) arrangement involves McDonald's constructing and equipping the restaurant, with the franchisee then leasing the complete facility. Each path carries different upfront costs. For a turnkey (BFL) arrangement, the franchisee typically needs less in initial capital because McDonald's fronts the real estate and construction costs - but ongoing rent and service fees are higher. For a conventional arrangement, the total investment is higher upfront but provides more long-term financial control.
According to McDonald's Franchise Disclosure Document (FDD), the estimated total cost to open a new McDonald's restaurant ranges from approximately $1,425,000 to $2,560,000 for a standard restaurant, depending on the format, size, location, and market. Key cost components include:
Once open, McDonald's franchisees pay a royalty fee of 4% of gross sales monthly. Additionally, franchisees pay service fees (rent) to McDonald's for the use of the building and land when in a BFL arrangement - these fees are typically 8.5% to 15%+ of gross sales depending on the agreement. There are also contributions to the National Marketing Fund (currently approximately 4% of gross sales) and local co-op advertising. Total ongoing fees to McDonald's Corporation routinely run 12% to 20% of gross sales when all components are combined.
McDonald's requires all prospective franchisees to have a minimum of $500,000 in non-borrowed liquid assets. These funds cannot come from loans or other borrowed sources - they must represent true liquid net worth. This requirement ensures franchisees have the personal financial stability to weather the operational challenges of running a restaurant business. McDonald's also evaluates total net worth, which is typically expected to exceed $1 million for serious candidates.
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Apply Now ->Given the significant capital requirements involved, most McDonald's franchisees rely on some form of financing to complete their purchase or development. There are several loan products that work well for franchise acquisitions of this scale.
The SBA 7(a) loan program is one of the most popular choices for franchise financing. Because McDonald's is listed on the SBA Franchise Directory, SBA-participating lenders can process loans more efficiently, often without requiring a separate lender review of the franchise agreement. SBA 7(a) loans offer up to $5 million in financing with repayment terms of 10 years for working capital and equipment, and up to 25 years for real estate. Interest rates are typically prime plus 2.75% to 4.75%, making them among the most affordable options for qualified borrowers. You can learn more about SBA loans and how they apply to franchise acquisitions.
For franchisees purchasing real estate as part of their McDonald's ownership, the SBA 504 program offers a powerful two-part structure. A Certified Development Company (CDC) provides 40% of the project cost at fixed below-market rates, a conventional lender provides 50%, and the borrower contributes 10% as a down payment. This program is ideal when the total project cost is driven by commercial real estate acquisition or construction, which is often the case with conventional McDonald's arrangements.
Conventional term loans from banks, credit unions, or specialty lenders provide a straightforward financing vehicle for franchise acquisitions. Long-term business loans with repayment periods of 5 to 10 years are commonly used to finance equipment, leasehold improvements, and working capital for franchise openings. While rates are typically higher than SBA options, approval timelines are faster and documentation requirements are sometimes lighter.
McDonald's restaurants require extensive commercial kitchen equipment, including fryers, grills, warming units, POS systems, and drive-through technology. Equipment financing allows franchisees to spread the cost of major equipment purchases over 36 to 72 months, with the equipment itself serving as collateral. This can free up capital for other startup costs or operating reserves.
When purchasing an existing McDonald's restaurant from another franchisee, financing typically covers the purchase price, which reflects not only the physical assets but also the goodwill, customer base, and existing cash flow of the restaurant. Lenders evaluate the restaurant's historical performance, lease terms, and McDonald's approval of the buyer when structuring resale financing. Resales can range from $1 million to well over $5 million for high-volume locations.
While not typically used for the initial purchase, a business line of credit can provide essential working capital flexibility once your McDonald's is operational. Lines of credit allow franchisees to manage payroll, inventory, seasonal dips, and capital improvements without disrupting their primary loan structure.
For buyers who have significant equity from a resale or who are financing specific components of a larger deal, small business loans in the $150,000 to $750,000 range can complement a larger primary financing package. These loans are faster to close and can be used to cover gaps in working capital, pre-opening costs, or equipment that falls outside other loan programs.
Financing Insight
Most McDonald's franchisees use a combination of an SBA 7(a) or 504 loan for the primary acquisition alongside equipment financing and a business line of credit. Layering multiple products can reduce overall borrowing costs and improve cash flow flexibility during the critical first year of operations.
Crestmont Capital has established itself as a leading business lender in the United States, specializing in fast, flexible financing solutions for franchise owners, established businesses, and growth-stage companies. When it comes to McDonald's franchise financing, Crestmont offers several meaningful advantages over traditional banking options.
First, Crestmont's team understands the unique financial structure of franchise acquisitions. Unlike general-purpose business lenders that may be unfamiliar with franchise disclosure documents, multi-unit royalty structures, and the McDonald's approval process, Crestmont advisors work with franchise buyers regularly and can help structure loans that align with both McDonald's requirements and the borrower's financial goals.
Second, Crestmont's application process is designed for speed. Traditional bank SBA loans can take 60 to 90 days or longer to close. Crestmont works with a network of lenders and alternative financing sources that can move significantly faster, helping franchisees meet McDonald's approval timelines and respond quickly to resale opportunities as they arise.
Third, Crestmont offers access to a wide range of loan products, meaning your Crestmont advisor can help you evaluate multiple options side by side - SBA 7(a), term loans, equipment financing, lines of credit - and recommend the structure that best fits your specific situation. This one-stop approach saves time and ensures you are not leaving money on the table by choosing a suboptimal product.
For franchisees who have faced credit challenges or have less-than-perfect financial histories, Crestmont also offers access to bad credit business loans and flexible underwriting options that look beyond credit scores to evaluate the full business opportunity. This can be particularly valuable when purchasing an established, high-revenue McDonald's location that speaks for itself financially. See how we've helped other franchise buyers through our Domino's franchise financing guide and our Crunch Fitness franchise loan overview.
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Apply Now ->Qualifying for McDonald's franchise financing involves meeting both McDonald's own requirements and the underwriting criteria of your lender. These two sets of requirements interact - a lender will not approve financing until McDonald's has conditionally approved the borrower, and McDonald's approval depends in part on having a viable financing plan in place.
McDonald's requires prospective franchisees to demonstrate a minimum of $500,000 in liquid, non-borrowed assets. This is the most stringent financial prerequisite and immediately disqualifies buyers who do not have substantial personal financial resources. Beyond liquidity, McDonald's reviews total net worth, creditworthiness, and the applicant's ability to manage a business with annual revenues that often exceed $2 million to $4 million per location.
For SBA and conventional lenders, the key underwriting factors include:
McDonald's has a strong preference for developing multi-unit operators - franchisees who own multiple restaurants. If you are already a McDonald's franchisee seeking to acquire additional locations, you will benefit from your operating history, existing relationships with McDonald's regional team, and established financial performance data that lenders find compelling. According to Census Bureau franchise data, multi-unit franchise operators consistently outperform single-unit operators in loan approval rates and financing terms.
Qualification Snapshot
The application process for McDonald's franchise financing typically runs in parallel with the McDonald's franchisee approval process. Here is a step-by-step overview of how the process works from start to funded.
Before approaching McDonald's Corporation, it is highly beneficial to understand your financing position. Getting pre-qualified with Crestmont Capital or another lender gives you clarity on how much you can borrow, what your down payment requirement will be, and what loan products are available to you. This makes you a more credible candidate when McDonald's evaluates your financial qualifications. Use our fast business loans application to get an initial read on your borrowing capacity.
Prospective franchisees apply directly to McDonald's Corporation through their franchising website. McDonald's conducts a thorough review of your financial background, business experience, and personal qualifications. This process can take several months. If you are pursuing a resale, you may be working with a specific seller while McDonald's reviews your application simultaneously.
McDonald's requires franchisees to complete a formal training program before taking ownership of a restaurant. This program is hands-on and typically takes 12 to 18 months for new franchisees. During this period, you will work in existing McDonald's restaurants to learn every aspect of operations, customer service, and management. Some of the costs incurred during training may be financeable as pre-opening expenses.
Once McDonald's has given conditional approval, your lender will move forward with the full underwriting process. This involves submitting personal financial statements, tax returns (typically 3 years), business plan and financial projections, a copy of the McDonald's franchise agreement or letter of intent, and documentation related to the specific restaurant being purchased (for resales). Your Crestmont advisor will help you gather and organize these documents to accelerate processing.
Once underwriting is complete and the loan is approved, you will move to closing. This is when loan funds are disbursed, the franchise agreement is executed with McDonald's, and you take legal ownership of the restaurant (or begin development for a new site). Timelines vary - SBA loans can take 60 to 90 days from application to closing, while conventional loans may close in 30 to 45 days in some cases.
With financing in place and McDonald's approval secured, you are ready to operate. Your first months as a McDonald's franchisee will involve working closely with your McDonald's field consultant and building your management team. Maintaining adequate working capital reserves during this period is essential, which is why proper loan sizing at the outset - including sufficient operating capital - is so important.
McDonald's Franchise Financing: Process Flow
To illustrate how franchise financing works in practice, here are several realistic scenarios that reflect the range of situations McDonald's buyers encounter.
An experienced restaurant manager has worked in the food service industry for 12 years and has accumulated $600,000 in liquid savings. She identifies a McDonald's resale in her city with annual sales of $3.2 million and an asking price of $1.8 million. She applies to McDonald's, completes a compressed training program (qualifying through prior experience), and is conditionally approved. She works with Crestmont Capital to secure an SBA 7(a) loan for $1.35 million at a rate of prime plus 2.75%, with a 10% equity injection of $450,000. Her remaining liquid assets after closing exceed McDonald's minimum, and she retains $150,000 as an operating reserve. Monthly debt service runs approximately $14,500, which her advisor confirms is well within the restaurant's historical cash flow capacity.
A multi-unit franchise operator who already owns two McDonald's locations is approved by McDonald's to develop a new location in a growing suburban market. Total project costs are estimated at $2.1 million, including real estate purchase, construction, equipment, and pre-opening expenses. He structures the deal using an SBA 504 loan - 50% conventional first mortgage ($1.05 million), 40% from a CDC at a fixed rate ($840,000), and 10% equity injection ($210,000). His existing business financials and strong credit profile result in favorable terms on both portions of the loan.
A private equity-backed operator group seeks to acquire a package of five McDonald's locations from a retiring franchisee. The total purchase price is $9.5 million. Because SBA loan limits cap at $5 million per borrower, the group uses a combination of a conventional commercial real estate loan for the property components and equipment financing for restaurant buildout. Crestmont helps structure the deal with two primary lenders and a bridge financing component to meet McDonald's closing timeline.
A corporate finance executive is transitioning out of a high-paying W-2 career to entrepreneurship. He has $750,000 in liquid assets, excellent credit (810 score), and strong references but no prior restaurant experience. McDonald's conditionally approves him after a thorough vetting process, requiring him to complete the full 18-month training program. While in training, he secures pre-approval for an SBA 7(a) loan of $1.2 million. Upon completing training, he purchases a single-unit resale using the SBA loan plus his liquid capital as an equity injection.
An existing McDonald's franchisee needs to upgrade her restaurant's kitchen equipment following a required renovation mandated by McDonald's reimage program. The renovation involves replacing fryers, grills, warming equipment, and POS systems at a total cost of $380,000. Rather than drawing down her line of credit or disturbing her primary SBA loan structure, she secures equipment financing through Crestmont Capital, spreading the cost over 60 months with payments of approximately $7,000 per month. The equipment itself serves as collateral, resulting in favorable rates and preserving her credit capacity for other needs.
A franchisee learns that a high-volume McDonald's location with $4.1 million in annual sales is becoming available, but the seller needs to close within 45 days. The buyer has McDonald's conditional approval already in place from a prior application. Standard SBA processing timelines make it difficult to close on time. Crestmont helps secure bridge financing to meet the closing deadline, with the understanding that the bridge will be replaced by permanent SBA financing within 90 days. The deal closes on schedule, securing the franchisee a location that generates nearly double his current single-unit revenue.
The total investment to open a new McDonald's franchise ranges from approximately $1,425,000 to $2,560,000, according to McDonald's Franchise Disclosure Document. This includes the initial franchise fee of $45,000, equipment costs, real estate or leasehold improvements, pre-opening training expenses, and working capital reserves. Resale purchases from existing franchisees may fall above or below this range depending on location volume and seller pricing.
Yes. McDonald's is listed on the SBA Franchise Directory, which means SBA-approved lenders can process SBA 7(a) or SBA 504 loans for McDonald's acquisitions without a separate review of the franchise agreement. SBA 7(a) loans offer up to $5 million with 10-year terms for equipment and working capital, and 25-year terms for real estate. You must meet both SBA lender underwriting standards and McDonald's financial requirements to qualify.
McDonald's requires a minimum of $500,000 in non-borrowed liquid assets. This means the funds must be truly liquid - cash, money market accounts, or readily marketable securities - and they cannot come from loans or borrowed sources. This requirement is non-negotiable and is among the most significant barriers to entry for prospective McDonald's franchisees.
For SBA-backed franchise loans, most lenders require a minimum personal credit score of 680, with 700 or higher preferred to secure the most competitive interest rates. For conventional business loans, requirements vary by lender but generally follow similar guidelines. A strong credit score combined with solid business experience and sufficient liquid assets creates the strongest possible financing profile for McDonald's franchise buyers.
McDonald's Corporation does not offer direct financing to franchisees in the traditional sense. However, in certain Business Facility Lease (BFL) arrangements, McDonald's builds and owns the restaurant and leases it to the franchisee, which reduces the franchisee's upfront capital requirement. This is sometimes described as an indirect form of financing because it reduces what the franchisee needs to borrow or contribute personally. All other financing comes from third-party lenders.
Loan approval timelines vary by lender and loan type. SBA 7(a) loans typically take 60 to 90 days from a complete application submission to closing. Conventional business loans can close in 30 to 45 days in some cases. Crestmont Capital works with expedited processes to help franchisees meet time-sensitive closing deadlines. Bridge financing options can close even faster when a rapid acquisition is required.
McDonald's charges a royalty fee of 4% of gross monthly sales. In addition to the royalty, franchisees pay ongoing fees for national marketing (approximately 4% of gross sales) and, in Business Facility Lease arrangements, rent to McDonald's Corporation (typically 8.5% to 15%+ of gross sales). Total ongoing fees to McDonald's commonly represent 12% to 20% of gross revenue, depending on the ownership structure and lease arrangement.
Yes, Rollover for Business Startups (ROBS) is a financing strategy that allows you to use retirement funds to invest in a franchise without triggering early withdrawal penalties or taxes. ROBS involves forming a C corporation, rolling your retirement funds into the new corporation's 401(k) plan, and using those funds to purchase franchise ownership. ROBS can be used alongside traditional loans but requires working with an attorney and plan administrator who specialize in this structure. Not all lenders accept ROBS as an equity source, so confirm this with your lender before proceeding.
For SBA and conventional franchise loans, you will typically need: personal financial statements (dated within 90 days), federal tax returns for the past 3 years, a business plan with financial projections, the McDonald's Franchise Disclosure Document (FDD) or Franchise Agreement, restaurant historical financial statements (for resales), a purchase agreement or letter of intent, and documentation of your equity injection source. Your Crestmont advisor will provide a specific checklist based on your loan type.
McDonald's does not require prior restaurant experience to apply for a franchise, but prior business ownership or management experience is highly valued in the selection process. Candidates without prior food service experience must complete the full 12 to 18 month training program before taking ownership of a restaurant. Having prior experience can shorten the training timeline and strengthen your application. Lenders also view prior business experience favorably when evaluating franchise loan applications.
The average U.S. McDonald's restaurant generates approximately $3.5 million to $4.0 million in annual sales, though high-volume urban and suburban locations regularly exceed $5 million. Restaurant-level profitability after royalties, rent, labor, food costs, and operating expenses typically ranges from 10% to 20% of sales, though this varies significantly by location, operator efficiency, and market conditions. Actual financial performance should be evaluated using the specific restaurant's historical data during due diligence.
Financing a McDonald's franchise with a credit score below 650 is very challenging given the loan sizes involved and McDonald's own vetting standards. However, if your credit challenges are historical rather than recent, and you have a strong overall financial profile (liquid assets, net worth, income), some lenders may work with you. Crestmont Capital can evaluate your specific situation and connect you with flexible lending options. In most cases, improving your credit score before applying will significantly expand your options and reduce your borrowing costs.
There is no fixed limit on the number of McDonald's locations a franchisee can own. McDonald's actually encourages multi-unit ownership and has a formal process for approving operators to expand from one location to multiple restaurants. The largest McDonald's franchisee operators in the U.S. own dozens of locations. Expansion approvals are based on your operating performance, financial capacity, and McDonald's assessment of market opportunities in your territory.
McDonald's franchise agreements are typically issued for a term of 20 years. At the end of the term, McDonald's has the right to offer a new agreement, require changes, or not renew, at McDonald's sole discretion. Unlike some franchise systems that offer automatic renewal rights, McDonald's retains significant control over renewal decisions, which is one reason why maintaining strong operational performance and a positive relationship with McDonald's regional management is essential throughout your franchise term.
Crestmont Capital offers several advantages over traditional banks for franchise financing. Our team specializes in franchise acquisitions and understands the nuances of McDonald's requirements, SBA eligibility, and the documentation needed for franchise loans. We work with a network of lending partners, which means we can match you with the right product rather than being limited to a single bank's offerings. We also move faster - in many cases significantly faster than traditional bank SBA processing times - which is critical when acquisition opportunities arise with tight timelines. Our advisors provide hands-on guidance throughout the process from pre-qualification to closing.
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Apply Now ->Owning a McDonald's franchise is one of the most capital-intensive business investments an entrepreneur can make, but it also offers one of the most recognized brand names on earth, a proven operational system with decades of refinement, and consistent demand that transcends economic cycles. The financial requirements are demanding precisely because the opportunity is substantial.
Successful McDonald's franchisees approach financing strategically. They understand the full cost picture before applying to McDonald's, they work with experienced financing partners who understand franchise acquisitions, and they structure their loans to ensure sufficient working capital reserves through the critical early months of operation. They also maintain strong relationships with their lenders, because a multi-restaurant expansion strategy over time will depend on continued access to capital.
Crestmont Capital stands ready to support McDonald's franchise buyers at every stage of the process - from initial pre-qualification through closing and beyond. Our team of franchise financing specialists understands the McDonald's system, the SBA lending landscape, and the creative financing structures that make complex deals possible. When you are ready to take the next step toward McDonald's ownership, we are ready to help you get there.
Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.