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McDonald’s Margins

A stock research company called Trefis who is blogging at Forbes.com noted that McDonald’s company owned stores had a combined EBITDA margin of 24%, while franchised stores provide McDonald’s corporate with an 88% EBITDA margin.¬† Trefis doesn’t detail how they sourced information to arrive at these margin calculations, but there point was McDonald’s earns 4x as much by franchising a store rather than owning it directly.

McDonald’s owns about 6,200 (20%) of its 30,000 restaurants.

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About Ryan Knoll

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Talk about some margins in the franchising world. Wow! I am also shocked that McDonald's makes more money on franchised stores. I wonder if this is because of the franchisees initial investment in not only the brand but also developing a new location.