Either way, you need to fulfill certain financial requirements to be a McDonald's franchisee.
(1) NEW RESTAURANTS
The costs for starting an entirely new McDonald's restaurant can be anything between RM1.5 million to RM3.5 million. The costs also depend on the restaurant size and type, its location, style of décor and landscaping.
Initial Costs
| (A) | USD 45,000 (approximately RM171,000, subject to prevailing exchange rate) Franchise fee paid upon or prior to the commencement of the franchise. |
| (B) | RM45,000 - RM70,000 Interest-free security deposit for the faithful performance of the franchise (approximately 2 months' deposit for service fee, royalty and marketing contribution or 3 months' rental deposit), refundable upon the expiration of the franchise. |
| (C) | RM200,000 - RM250,000 Pre-opening expenses - Staff training and salaries, stock trading, living expenses while training and other normal start-up costs. |
| (D) | RM900,000 Approximate cost of kitchen equipment, signage, seating, decor and landscaping paid to individual suppliers. |
| (E) | RM600,000 to RM2 million [depending on store type (Drive Thru, Mall, Oil Alliance or Shop Front)] Approximate cost of all civil works, ventilation system and renovations to the premises paid to individual contractors (Applicable for Developmental Franchise Only). |
| (F) | Other Miscellaneous Costs Stamp duty (paid to the government) is assessed on necessary documentation and is paid by the franchisee in addition to the working capital required. Legal fees are paid by the franchisee to cover the preparation of the franchise documentation |
Ongoing Fees (Monthly)
Royalty Fee
A Royalty Fee, which is a system fee, is based on a percentage of the restaurant's gross sales, which is currently at 5%.
Service Fee
For a developmental license (whereby the capital investment is solely borne by the franchisee), a monthly service fee is charged based on a percentage of the restaurant's gross sales. This is currently set at no less than 5% of the gross sales. For a conventional license (whereby the capital investment is shared between McDonald's and the Franchisee), a monthly rental, being a fixed base rent and/or a percentage of the gross sales, is determined by the total development cost of the restaurant.
Marketing Contribution
Currently at 5% of the restaurant's gross sales.
2) EXISTING RESTAURANTS
If you choose to buy an existing McDonald’s restaurant business instead, you will usually buy it over based on the restaurant's market value. In addition, the franchise fee and security deposit aforementioned will also be payable.
Note: All matters mentioned in relation to an individual making an application and qualifying for a McDonald's franchise also apply to the situation where it is proposed that an existing restaurant business is purchased.
FURTHER NOTES:
| 1. | The costs stated above are only estimates and may change without prior notice. |
| 2. | As a general guide, no less than 30% of the initial costs must be funded from non-borrowed personal resources. |
| 3. | Term of Franchise: 20 years or length of lease of premises. |