1851

<a href="https://1851franchise.com/franchise-deep-dive-mcdonalds-franchise-costs-fees-profit-and-data-2720737">McDonald's</a> has informed its operators of plans to increase its royalty fees from 4% to 5% starting Jan 1, 2024, marking the first increase in nearly three decades,&nbsp;<a href="https://www.cnbc.com/2023/09/22/mcdonalds-to-raise-royalty-fees-for-new-franchised-restaurants.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=mcdonalds-to-hike-royalty-fees-for-new-franchisees-marking-first-increase-in-30-years-2723700" target="_blank" rel="nofollow">CNBC reports</a>.&nbsp;The increment will commence next year and will primarily impact new operators and those acquiring corporately owned units. However, current operators maintaining their stores or those who purchase a franchised restaurant from another franchisee will be exempt from this new rule. The move is aimed at aligning the fee structure in the U.S. and Canada with that of other global markets where the brand already applies a 5% royalty rate."While we created the industry we now lead, we must continue to redefine what success looks like and position ourselves for long-term success to ensure the value of our brand remains as strong as ever,"&nbsp;<a href="https://www.linkedin.com/in/joe-erlinger-7445b88?utm_source=1851franchise.com&utm_medium=article&utm_campaign=mcdonalds-to-hike-royalty-fees-for-new-franchisees-marking-first-increase-in-30-years-2723700" target="_blank" rel="nofollow">Joe Erlinger</a>, McDonald's USA president, said in a message to domestic franchisees.&nbsp;The burger giant also intends to change its terminology from "service fees" to "royalty fees" to reflect this adjustment.Approximately 95% of McDonald’s outlets are operated by franchisees. To function as part of the McDonald’s network, they are obligated to&nbsp;<a href="https://1851franchise.com/how-does-mcdonalds-use-real-estate-to-make-money-2717508#stories">pay rent</a>,&nbsp;<a href="https://1851franchise.com/what-is-a-franchise-royalty-fee-2718389">monthly royalty fees</a> and&nbsp;<a href="https://1851franchise.com/how-do-you-open-a-mcdonalds-franchise-2721882">additional costs</a>, including annual contributions for the company’s mobile app.This decision to increase royalty fees unfolds against a backdrop of&nbsp;<a href="https://1851franchise.com/unhappy-with-happy-meals-pricing-mcdonalds-franchisees-butt-heads-with-corporate-2714453">tense relations</a> between McDonald's and its franchisees. This pressure has been exacerbated by recent legislative changes, like&nbsp;<a href="https://finance.yahoo.com/news/devastating-financial-blow-mcdonald-franchisee-163000954.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=mcdonalds-to-hike-royalty-fees-for-new-franchisees-marking-first-increase-in-30-years-2723700" target="_blank" rel="nofollow">California's fast-food bill</a> mandating a $20 per hour minimum wage. McDonald's franchisees have reportedly expressed their overall dissatisfaction, rating their relationship with the corporate body at a mere 1.71 out of 5 in a quarterly survey, CNBC reports.Despite the controversy, McDonald’s is experiencing strong growth, ending the second quarter with 13,445 restaurants in the U.S. Of these, 12,759 were franchised, and 686 were company-owned. The company has reported a 10.3% rise in U.S. comps in the second quarter, attributed mainly to successful campaigns like the&nbsp;<a href="https://1851franchise.com/mcdonalds-franchise-creates-cosmcs-spinoff-fast-food-concept-2723161">Grimace Birthday Meal</a>, which gained substantial traction on TikTok, accumulating over 3 billion views.Read more,&nbsp;<a href="https://www.cnbc.com/2023/09/22/mcdonalds-to-raise-royalty-fees-for-new-franchised-restaurants.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=mcdonalds-to-hike-royalty-fees-for-new-franchisees-marking-first-increase-in-30-years-2723700" target="_blank" rel="nofollow">here</a>.Related articles:<ul><li><a href="https://1851franchise.com/mcdonalds-us-operators-vote-to-snub-corporate-over-millions-in-fees-2714524">McDonald’s U.S. Operators Vote to Snub Corporate Over Millions in Fees</a></li><li><a href="https://1851franchise.com/how-profitable-is-owning-a-mcdonalds-franchise-2715302?utm_source=1851franchise.com&amp;utm_medium=article&amp;utm_campaign=mcdonalds-franchise-creates-cosmcs-spinoff-fast-food-concept-2723161#stories">How Profitable is Owning a McDonald’s Franchise?</a></li><li><a href="https://1851franchise.com/franchise-deep-dive-mcdonalds-franchise-costs-fees-profit-and-data-2720737?utm_source=1851franchise.com&amp;utm_medium=article&amp;utm_campaign=mcdonalds-franchise-creates-cosmcs-spinoff-fast-food-concept-2723161">Franchise Deep Dive: McDonald’s Franchise Costs, Fees, Profit and Data</a></li><li><a href="https://1851franchise.com/buying-a-mcdonalds-franchise-the-pros-cons-2720750?utm_source=1851franchise.com&amp;utm_medium=article&amp;utm_campaign=mcdonalds-franchise-creates-cosmcs-spinoff-fast-food-concept-2723161">Buying a McDonald's Franchise: The Pros &amp; Cons</a></li><li><a href="https://1851franchise.com/how-do-you-open-a-mcdonalds-franchise-2721882">How Do You Open a McDonald's Franchise?</a></li><li><a href="https://1851franchise.com/how-does-mcdonalds-use-real-estate-to-make-money-2717508">How Does McDonald's Use Real Estate to Make Money?</a></li></ul>

McDonald's to Hike Royalty Fees for New Franchisees, Marking First Increase in 30 Years

1851 Franchise

The royalty fee increment, which will officially go into effect early next year, comes amid ongoing tensions between franchisees and McDonald’s corporate. 

mcdonalds-to-hike-royalty-fees-for-new-franchisees-marking-first-increase-in-30-years

Comfort Keepers

Comfort Keepers - Midyear Press Release 2025 - 1851 Franchise

Comfort Keepers® Hits Mid-Year Stride With Strong Franchise Growth and Rising Demand for In-Home Care

comfort-keepers-franchise-midyear-momentum-2025

petbar

petbar - Garrett Dewan - Why I'm Investing - 1851 Franchise

Why Garrett Dewan Is Choosing To Reinvest in petbar

petbar-franchise-austin-garrett-dewan-multi-unit

Paris Baguette

NJBIZ: Paris Baguette Ramps Up Expansion With New Franchises, Facility and 2030 Growth Target

njbiz-paris-baguette-ramps-up-expansion-with-new-franchises-facility-and-2030-growth-target

Busy Bee Jumpers

Top 10 Reasons To Buy a Busy Bee Jumpers Franchise in 2025

top-10-reasons-to-buy-a-busy-bee-jumpers-franchise-in-2025

Home Halo

home-halo-former-athletes-frachisees-image

Why Former College Athletes Can Make Winning Home Halo Franchise Owners

former-college-athletes-home-halo-franchise

Buying a Franchise Masterclass

 Franchise Opportunities

Get Support Buying a Franchise

How to Buy a Franchise White Paper

How to Buy a Franchise

How to Sell Franchises

How to Grow a Franchise

Find a Franchise Supplier

1851 Franchise Opportunities

Franchisor News

Franchisor Power Rankings

FranCamp Mastermind Summit

Franchise Development Website Builder

Franchise Resources

What ALEC-Laffer's Report Means for Franchising

Website Awards

Power Rankings

About 1851

Advertise on 1851

Contact 1851 Editorial

Terms of Use

1851 Login

GROWTH CLUB LOGIN

facebook

instagram

twitter

linkedin

youtube

Wendy's CEO Kirk Tanner Steps Down - Breaking News - 1851 Franchise

Wendy’s CEO Kirk Tanner Steps Down Amid Challenges, Leaving Franchisees Facing Uncertainty

wendys-ceo-transition-kirk-tanner-franchisee-uncertainty

"Come in, We're OPEN" sign against abstract background

Small Business Optimism Dips, Raising Concerns for Franchise Owners

small-business-optimism-dips-raising-concerns-for-franchise-owners

Photo of Roof Scientist truck and trailer

Roof Scientist Expands Into Northern Indianapolis as Entrepreneur Dale Speckman Launches New Business in Fishers

roof-scientist-expands-into-northern-indianapolis

Image of Donald Trump pointing with red stripes in the background

August 1 Tariff Deadline Is Said to Have ‘No Extensions’: What This Could Mean for Franchises

august-1-tariff-deadline-franchise-impact

What June’s Jobs Report Means for the Franchise Industry

what-junes-jobs-report-means-for-the-franchise-industry

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores - Agg - 1851 Franchise

Hooters Leans Into Franchising With Closure of 30 Company-Owned Stores

hooters-franchise-model-company-owned-closures

Technomic Releases Annual Ranking of the Top 15 Fast-Food Chains in the U.S.

technomic-releases-annual-ranking-of-the-top-15-fast-food-chains-in-the-us

The Ultimate Guide to Selling Franchises: How To Create a Strong Incentive

how-to-build-strong-incentives-to-attract-prospective-franchisees

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery 

From Prescriptions to Pastries: Kari Khandelwal Creates a Comforting Community Bakery in Overland Park, Kansas

paris-baguette-franchise-overland-park-khandelwal

Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

From Corporate Careers to Community Roots: Kansas Couple Revitalizes Local Childcare With Children’s Lighthouse

kansas-couple-opens-childrens-lighthouse-gardner-olathe

Hely and Hiral Patel Bring Their Longtime Dream to Life With The Brass Tap

brass-tap-franchise-pasadena-maryland-hely-hiral-patel

Franchisee spotlight graphic with photo of Ricki Oberoi and Layne's Chicken Fingers logo

McDonald's to Hike Royalty Fees for New Franchisees, Marking First Increase in 30 Years

MORE STORIES LIKE THIS