Video:Requirements for Opening a McDonald's Franchise

Transcript:Requirements for Opening a McDonald's Franchise

Hi, I'm Omar Saad here for About.com, and today, we're going to take a look at the requirements for opening a McDonald's franchise using information from About.com's Franchises site. Few endeavors embody the American Dream quite like entrepreneurship. And even fewer entrepreneurial endeavors have been as successful as the McDonald's restaurant franchise. Here's a quick look at some of what it takes to open your own McDonald's franchise.

Financial Requirements for a McDonald's Franchise

The start up costs for any franchise is likely to be significant, and McDonald's is no exception. McDonald's requires a down payment of 40% of the total cost when the franchisee is purchasing a new restaurant. However, it's most often the case that new franchisee's purchase existing restaurants, often owned by McDonald's, and the down payment requirements in those cases is 25%. Obviously, costs will vary depending on where the restaurant is located along with other specifics, but generally speaking, you should have at least $300,000 available for the down payment. McDonald's does require, however, that all potential franchisees have at least $500,000 in liquid assets available when applying. McDonald's also stipulates that this money must be non-borrowed personal funds and should come from either cash on hand, stocks, bonds, or real estate investments, not including your personal residence.

Other Requirements for a McDonald's Franchise

Two keys associated with being a successful entrepreneur and required to become a McDonald's franchisee are the ability to develop and execute a business plan and the ability to show a history of managing finances well. Also, significant business experience is one of McDonald's top requirements for new franchisees. As mentioned on their own website, McDonald's is looking people who have successfully owned or managed multiple business or departments in the past. Lastly, McDonald's is looking for people who are going to be committed to the success of their restaurant. As detailed on a quote by founder Ray Crock on their website, franchisees should be fully present and committed to train, oversee, and run their restaurants, in order to ensure success.

Owning a franchise such as McDonald's carries with it a substantial entry fee and a full commitment of time and effort. However, the rewards of being involved with this successful worldwide business may just be worth it. Thanks for watching. To learn more, visit us on the web at About.com.