Video:How to Open a McDonald's Franchisewith Jonathon Stewart
If you want to be a proud owner of a McDonald's franchise restaurant, here's everything you need to know to open a McDonald's franchise.See Transcript
Transcript:How to Open a McDonald's Franchise
If you've ever dreamed of having your very own pair--or more--of golden arches, then you might want to consider greasing your corporate ladder with a McDonald's franchising opportunity.
About Opening a McDonald's Franchise
However, super size success doesn't come from how many hamburgers you can eat. Franchise ownership requires commitment and a serious investment of time and money.
Instructions for Opening a McDonald's Franchise
First, you'll want to place your franchise order. The process begins with submitting an application that can be downloaded from the McDonald's website. Instead of getting fries with that, the selected candidates will then be personally interviewed. From there, a candidate undergoes a three-day, in-restaurant evaluation. Those who successfully complete this evaluation go on to a second interview where personal finances are thoroughly reviewed.
More Steps for Opening a McDonald's Franchise
The next step is training, which McDonald's prides itself on. The process covers the franchise system, restaurant, and business management as well as ownership prep. This training is mandatory and can take anywhere from 9 to 24 months to complete, and includes conferences, seminars, and one-on-one training. Most franchises are existing restaurants purchased either from McDonald's or from other owner/operators. An initial down payment of 25% of the total cost is required. This down payment must come from non-borrowed personal resources, that is, your piggy bank... and the balance due is generally financed. Costs of restaurants vary, so the down payment amount will also vary. Typically, a minimum somewhere in the six figures is required for franchise ownership, and this amount has nearly doubled in recent years.
More Facts About Opening a McDonald's Franchise
Purchasing a new restaurant is relatively rare unless your money trees are overripe. The cash required down payment on a new build increases to forty per cent of the total cost. There is also a hefty, several thousand dollar initial fee, and equipment and pre-opening costs range from around one to two million dollars. You still sure about this? During the term of your franchise, there are also ongoing fees like a monthly service charge based on sales performance... this fee is currently 4% of monthly sales. There is also base rent or percentage rent due that are set based on the percentage of monthly sales.
Becoming a McDonald's franchise owner operator can also be a competitive process. But the willingness to relocate as well as having additional financial resources can put you out front in the burger owner race. Still, there are other qualifications that McDonald's also looks for.
These include significant business experience and a proven track record as a successful owner of multiple business units. You must also have a strong entrepreneurial spirit and the ability to develop and execute a business plan. Then, you need to show how adept you are at managing finances and understanding financial statements. It also helps to be committed to managing day-to-day operations through exceptional management skills.
Finally, you need to have an acceptable credit history to demonstrate that you can make smart financial decisions.So, if you've got the drive and desire, the cool, hard cash, and a love of Big Macs‚ a McDonald's franchise is where you just might want to place your career order.
I'm Jonathon Stewart, with About.com.