When a customer buys a meal at a franchised McDonald's restaurant, the franchisee's business records the checkout sale. McDonald's Corporation reports franchise-related rent, royalties and fees. In its FY2025 Form 10-K, the company said approximately 95% of restaurants worldwide were franchised at year-end. Corporate revenue and total activity across the restaurant network are therefore different measures.
Follow the roles
| Participant | Main activity in a conventional franchise | Money to distinguish |
|---|---|---|
| Customer | Buys the meal | Checkout payment |
| Franchisee | Operates the restaurant, funds specified equipment and bears operating costs | Restaurant sales, costs and profit |
| McDonald's Corporation | Provides brand/system rights and generally owns or leases the site | Rent, royalties and fees |
The 2025 filing reports $16.548 billion of franchised-restaurant revenue: $10.442 billion of rent, $6.018 billion of royalties and $88 million of initial fees. Those are corporation revenue categories, not pure profit or the typical franchisee's earnings. Property and system operations have costs, and franchisees also need an economically sustainable business.
Calling McDonald's “just a real-estate company” misses the role of brand demand, service standards, locations, supply chain, technology and local operators. The property arrangement matters precisely because it fits these other activities. The corporation may benefit from partner capital and local execution while remaining dependent on operator quality and investment.
The transferable question is which activities a company must control centrally, which can be delegated, and whether every participant can keep creating value.