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.
[chart removed---it wasn't displaying properly]
Similar Posts:
- Trend: Franchisors Decrease Company Owned Units
- News: Buffalo Wild Wings, Denny’s, Baskin-Robbins, Bennigan’s, Donatos
- Smoothies Competition from McDonald’s
- Papa John’s franchisees average $705K in annual sales?
- McDonald’s chickens out on Boston Market
Ryan is an attorney and valuation specialist residing in Chicago. He chronicles his thoughts and research on FranchisePundit.com. You may reach him by email ryanknoll@gmail.com or mobile telephone 312-715-8115.
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.