Have you been waiting for us to write about one of the World’s most renowned and well-established food & beverages franchises? Are you looking for a profitable investment in food business in India?
Have you been reading several articles on starting a Mcd franchise in India but couldn’t find any reliable information? Are you ready to dive into the universe of another well-known food chain in India?
If you have answered “yes” to any of the queries, you should be curious to understand more about McDonald’s – one of India’s most popular and most-demanding fast-food brands that have an immense customer base, revenue figures, and much more.
If you’re looking for a profitable investment in the fast-food industry, owning a McDonald’s outlet may prove to be an enticing opportunity.
In this blog, we’ll cover an in-depth article on the McDonalds Franchise in India, along with its cost, profit, and step-by-step guidelines to get this franchise – and answer some common questions about the chain.
- Company: McDonald’s
- Founded: 1955
- HQ: California, US
- Industry: Food & Beverage
- No. of outlet: 40,570 restaurants
- Model: Franchise
- Area served: Worldwide
- Franchise Fee: ₹30 lakhs
- Area Required: Min. 2000 sq ft
- Total Initial Investment: ₹ 3 Crores to 5 Crores
Table of Contents
Overview of McDonald’s Franchise in India
Irrefutably, McDonald’s as a brand doesn’t need any introduction to any individual. Originally, established in 1940 as a simple restaurant in San Bernardino, California by Richard and Maurice McDonald, McDonald’s is one of the world’s leading, most recognized, and successful fast-food restaurants, specialized in serving diverse menu range, including Burgers, Chicken, Salads, Egg McMuffin, Sausage McMuffin, Wraps, Beverages, and many more varieties of desserts.
In 1955, The chain was purchased by Ray Kroc, who transformed McD’s business into a successful chain and several times McDonald’s is often regarded as a real estate company, which certainly contributes a major part to its revenue.
That being said, when did McDonald’s foray into the Indian market? What’s their growth trajectory? To learn more, let’s dive further.
McDonald’s In India:
McDonald’s, One of Iconic burger chain, foray into indian market in 1996 with a bang, marking the beginning of its successful franchise journey in the country.
The expansion plan for McDonald’s was a joint venture between the McDonald’s corporation and two big Indian partners Amit Jatia of Hardcastle Restaurants Private Limited (HRPL) and Vikram Bakshi of Connaught Plaza Restaurants Private Limited (CPRL).
It is important to note that in 2017, McDonald’s chain also experienced some occasional challenges and disputes with the Latter partner – Vikram Bakshi of Connaught plaza restaurants private limited(CRPL), which eventually led to the termination of their franchise with them, leading to only SINGLE THIRD PARTY VENDOR – HRPL, responsible for McD’s franchise expansion in India.
Currently, the McDonald’s boast over 40,570 restaurants across the globe, serving over 69 million customers daily in over 100 countries. Today, the franchise controls over 357 restaurants in India itself, which is managed by HRPL and McDonald’s corporation.
Does this little snippet excite you to Become a franchisee of a McDonald’s store? Don’t hurry! we have a few more important topics to cover on McDonald’s chain, and we believe that it will undoubtedly help you to understand and choose the best fast-food franchise.
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The Journey of McDonald’s Franchise in India
- Ventured into Indian market in 1996 with a strategic collaboration with McDonald’s Indian subsidiary company and two Indian partners specialized in restaurants industry – HRPL and CRPL.
- Initially, the brand faced numerous challenges and had to make significant modifications to its menu offerings.
- They had to introduce multiple veg options to cater to the predominantly vegetarian population.
- In 2017, the franchise faced occasional challenges with CRPL, resulting in the termination of their franchise agreement.
- In 2019, Sole-franchise rights were given to HRPL that takes care of entire expansion program for its franchises.
Key Facts on McDonald’s
| Sr No. | Type | Public |
|---|---|---|
| 1 | Trade Name | McDonald’s or McD |
| 2 | Industry | Food & QSR |
| 3 | Founded | 1955 |
| 4 | Founders Or Parent Company | Richard McDonald Maurice McDonald Ray Kroc |
| 5 | Corporate Headquarters | Chicago, Illinois, U.S. |
| 6 | Number of locations | Over 40000 worldwide, over 357 in India |
| 7 | Area served | Worldwide |
| 8 | Model | Franchise |
| 9 | Menu Offering | Burger, Wraps, Salads, Chicken, and many more |
| 10 | Revenue | US$23.223 billion (2021) global |
| 11 | Website | https://www.mcdonaldsindia.com/ |
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How Much Does A McDonald’s Franchise Cost in India?
The specific cost of owning a McDonald’s outlet in India certainly requires a huge investment and McDonald’s is quite peculiar in choosing a franchise for its businesses.
However, the cost of owning a McD outlet in India may depend on numerous factors, such as location, restaurant size, market potential & conditions, and other major business-related considerations.
Nonetheless, considering the brand’s current status and information available as per the industry standards, one may require to invest at least ₹ 3 Crores to ₹ 5 Crores for a floor area of minimum 2500 sq feet.
It is also important to mention that the initial investment includes various components like franchise fees, equipment/machinery and inventory costs, restaurant construction or renovation expenses, and working capital.
How much is the McDonald’s Franchise Fee?
The franchise fee is one of the major revenue streams for any franchisor like McDonald’s, and the franchise for McDonald’s in India will be approximately ₹30 lakhs.
In addition to that, Interested candidates/partners may also require to meet the minimum financial requirement of at least a Net Worth of ₹ 10 Crores and at least ₹5 Crores in liquid assets.
Moreover, At FranchiseGoal India, we always recommend contacting the respective team for accurate and current information.
Additional Cost for The McDonald’s
Typically, to run and maintain a McDonald’s location, one must adhere to their standards and are liable to pay a few additional costs such as Royalty fee, advertisement fee, maintenance fee, and a few other investments.
The on-going royalty fee for a McDonald’s restaurant will be approximately 4% and an advertising fee of 3%, which will be charged by the franchise on a monthly basis.
| Type of Fee | Cost & Other details |
|---|---|
| Franchise Fee | ₹30 lakhs |
| Machinery/Equipment | ₹40 lakh |
| Interior Cost | ₹30-35 lakh |
| Furniture expenses | ₹15 lakh |
| Royalty Fee | 4% |
| Ad Royalty Fee | 3% |
| Required Space | Min. 2000 sq feet |
| Net Worth | ₹10 Crore |
| Required liquid capital | ₹5 Crore |
| Total Initial Investment | ₹3 Crore – ₹5 Crore |
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How Much is McDonald’s Franchise Profit Margin?
The profit margin for a McDonald’s location may depend on several factors, including outlet’s geographical location, restaurant size, market conditions, and managerial capabilities of a franchise owner.
Nevertheless, considering the brand’s experience, varieties of localized flavor food menu, competitive pricing, worldwide presence, comprehensive training and marketing support, and humongous loyal customer base may help new franchise owner to earn a healthy profit margin of 8-10%.
Additionally, the McDonald’s chain hasn’t disclosed any specific details about the profit margin for its franchisees, and we firmly advise aspiring entrepreneurs to conduct thorough research, carefully analyze financial projections, and seek professional advice from the respective franchise team to determine the potential profit margins for a McDonald’s outlet in their specific location in India.
McDonald’s Franchise Profitability Explained
We will try to explain more about the profitability of McDonald’s location with a simple example, and yes, it could vary depending on the chosen model and city.
Assuming, you have opened an McD outlet in a good area and with given expenses, achieved these numbers throughout the years;
Usually, McDonald’s outlets are renowned for their staggering sales figure, and an average McDonald’s restaurant with a great location could easily achieve revenue of somewhere around ₹12-15 lakhs.
| Type of Cost | Amount |
|---|---|
| Sales/month | ₹ 12,00,000 |
| Raw Material Cost (Max 40%) | (₹ 6,00,000) |
| :Gross Profit | : ₹6,00,000 (60%) |
| Rent | (₹2,00,000) |
| Employees salary | (₹ 80,000) |
| Utilities | (₹ 50,000) |
| Misc. | (₹ 35,000) |
| Marketing | (₹ 35,000) |
| Aggregator | (₹ 40,000) |
| Discount/Promos | (₹ 40,000) |
| Royalty(4%) | (₹ 36,000) |
| Ad Royalty(3%) | (₹ 27,000) |
| :Net Profit | ₹ 57,000 (~10%) |
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Is McDonald’s Franchise Profitable in India?
In India, owning a McDonald’s restaurant could be a lucrative opportunity for entrepreneurs who are experienced in managing franchises, controlling expenses, and catering to local market needs.
Moreover, the McDonald’s outlets are owned by HRPL that takes care of complete expansion strategies for the chain in India.
The profitability of a single franchise owner may depend on several factors, including its market potential, brand strength and support, varieties in menu offering, operational efficiency, and its competitive strength. Some of other major factors influencing the growth of McDonald’s in India;
- Rapid urbanization and Changing lifestyles
- Well-established support system
- Marketing strategies, supply chain management, and operational expertise
- Competitive pricing
An average McDonald’s outlet holder in India may anticipate a net profit margin of 8-12% that may amount to more than ₹1 lakhs per month.
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Why Consider Owning A McDonald’s Franchise in India?
Being a part of renowned fast-food chain could be an enticing opportunity for aspiring candidates. Moreover, we have enlisted a few prominent reason to own this franchise;
- Ever-growing strong financials:
- The franchise has been quickly expanding its locations worldwide and has provided healthy return to its franchisee and investors. Moreover, the food franchises is in demand that has garnered attention of several food enthusiasts in India.
- Unique franchise model:
- McDonald’s operates under a conventional franchise arrangement, where the company owns or secures a long-term lease on the land to build its restaurant and franchisees to fund improvements to their restaurants.
- Leverage the loyal customer base:
- As a franchisee, you may leverage the brand’s well-established loyal customer base that may help new franchisees in generating revenue from day one.
- Variety & Affordability
- McDonald’s provides a wide range of pocket-friendly and delicious food ranges filled with regional flavors to its consumers, enabling them to garner customers from every category.
- Online and Offline Marketing Support:
- Its master franchise – Amit Jatia of Hardcastle Restaurants Private Limited (HRPL) may provides an extensive support to its outlet holders by offering industry standard online and offline marketing support.
- Extensive training support:
- McDonald’s offers comprehensive training and support to its franchisees, including assistance in site selection, Interior decor, and other necessary stuff.
- High profit potential:
- The franchise offers highly profitable franchise model, and with right location and marketing strategy, McD outlet holder may generate an impressive profit margin of 8-12%.
What does it require to become a McDonald’s Franchisee?
- First and most important – One should have the required funding to partner with a McDonald’s, and one should be ready to invest anywhere between ₹3 Crore to ₹ 5 Crores.
- One should be have a space of over 2000 sq feet with a plenty of parking space. The location should be in a city center and should be accessible to its customers.
- Interested applicants are advised to dedicate themselves to the McDonald’s business and follow the company standards and maintain their legacy.
- Interested applicants must undergo and complete the necessary training program offered by its master franchise team – HRPL.
- Interested franchisees should have a passion to work in the fast-food industry and should possess the leadership and financial skills to operate a McDonald’s outlet.
What is the Support offered by McDonald’s to Setup a store?
- Site Search and Analysis
- Store interior & exterior layout planning
- Necessary IT support
- Marketing Support
- Regular product launch & innovations
- Quality checks and Complete support for supply chain
- Staff Training Support
- Marketing & Sales growth strategies and guidelines
- All Hands Meetings to improvise the business
- Location-specific promotions during the opening and planning of the launch
Documents required to own a McDonald’s Franchised outlet
- Personal Documents – Aadhar and Pan Card
- Passport Size photographs
- Outlet rental agreement- if rented
- Bank Passbook
- PD cheques – If necessary
- GST License, ITR doc, and other necessary stuff
- FSSAI & Nagar Nigam license
- Brand agreement
How to Get McDonald’s Franchise in India?
Irrefutably, becoming a McDonald’s outlet owner requires an enormous capital that may offers an impressive gross profit margin.
Additionally, the McDonald’s chain may provide several benefits, and interested candidates can take up franchise outlets in their city through their expertise and endless support systems.
One can avail this franchise using below mentioned steps;
- Visit its official website and find the necessary details.
- Additionally, According to the latest info, McDonald’s or its partner HRPL is not currently seeking additional franchisees/sub-franchisees at this time in West and South India.
- However, In January 2023, its McD restaurants has announced to expand their presence by four to five fold in North and East region.
- Additionally, According to the latest info, McDonald’s or its partner HRPL is not currently seeking additional franchisees/sub-franchisees at this time in West and South India.
Contact Number – 011- 24604047/45/49
Final Takeaway
Despite the occasional hurdles, McDonald’s restaurant in India has managed to acquire a significant market share in the competitive fast-food industry.
Today, McDonald’s enjoys a great space and has become one of India’s leading and well-established fast-food brand that has gained immense popularity countrywide.
Currently, the chain operates at more than 350 location across India, and its North and East market lead has planned to increase it presence by four to five fold in upcoming years. It may created tremendous opportunity for interesting candidates to join hands with India’s popular fast-food chain.
With an Initial investment of ₹ 3 Crores to ₹ 5 Crores, the McDonald’s chain may offer an outstanding profit margin to its stakeholders and one may anticipate an exceptional net profit margin of 8-12%. Nevertheless, Interested applicants are advised to speak to 4-5 McDonald’s outlet owners before applying for its franchise.
The Bottom line – In case you are interested in the fast food industry and want to take advantage of the opportunity with a moderate investment, then you can apply for a McDonald’s outlet in India. With its immense legacy, expertise, and robust supply chain, one may experience stable and steady growth in their entrepreneurial journey.
So, what are you waiting for? Go and start your entrepreneurial journey with McDonald!!
Good Luck!! Happy Franchising!!
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FAQ
How much does it cost to Start a McDonald’s Franchise in India?
Ans: The initial investment for McDonald’s will range from ₹3 Crore to ₹ 5 Crores for a floor area of a minimum of 2000 sq feet. This initial investment for McD involves costs like Franchise Fees, Equipment Fees, Marketing and other expenses.
How much profit does a McDonald’s franchise make in India?
Ans: It certainly depends on several factors including the location, average customer footfall, franchisee’s managerial skills, and many other business-related dependencies.
Additionally, Owning a McDonald’s outlet in India may require an enormous investment that may generate sales of over ₹10 lakhs to ₹15 lakhs, offering a profit margin of 8-12% sums up to ₹80000 or more per month.Does McDonald’s still franchise in India?
Ans: It does provide but limited to only specific location. According to the official information, McDonald’s chain is not seeking any franchisee/sub-franchisees for its west and south location but its North and East region head has certainly planned to expand its presence by 4-5 folds.
