Franchise Economics

Reading McDonald’s Revenue, Margins & System Sales

Learn how a franchisor’s reported revenue differs from customer spending across the system, and how ownership structure changes margins, capital needs and incentives. Fiscal year ended December 31, 2024; 2023 comparison; USD millions unless labelled. Restaurant counts, revenue, margin and Systemwide-sales figures were checked against the 2024 Form 10-K and company annual report. McDonald’s does not consolidate franchisees’ restaurant-level income; no franchisee profit is inferred. Option economics are classroom proposals.

What you will learn

• Distinguish Systemwide sales from McDonald’s reported revenue.
• Reconcile franchised and company-operated revenue and margin definitions.
• Calculate restaurant mix and margin ratios without confusing franchisor and franchisee economics.
• Evaluate growth choices using capital and incentive tradeoffs.
• Write a franchise-model memo with explicit data limits.

Syllabus

1. 1Map the franchise system and the reporting entity10 min
2. 2Separate Systemwide sales from corporate revenue10 min
3. 3Reconcile corporate revenue streams10 min
4. 4Compare restaurant-margin definitions10 min
5. 5Evaluate growth with capital and incentives10 min
6. 6Write a franchise-model decision memo10 min
7. CBusiness case: McDonald’s: Franchise More or Operate the Next Stores?20 min