Franchise News
How Does McDonald's Use Real Estate to Make Money?
The masterminds behind the Golden Arches turned a burger joint into a real estate mogul by owning the land where stores are built and leasing to franchisees.
McDonald’s success is built on layers of several ideas, but where the consumer world sees a fast-food burger chain, the business world sees a real estate company.
The brand owns all of the land on which its stores are built, so the franchisees who open up their own units of McDonald’s locations are not only paying franchise royalties to the company, they’re also paying it rent.
According to Wall Street Survivor, McDonald’s uses two methods to make its money on real estate: buying and selling hot properties and collecting rent on franchised units. McDonald’s has nearly 40,000 units around the world, 85% of which are franchisee-owned and operated, and sees much of its revenue come from that rather than its more budget-friendly menu options.
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