Building a brand-new company and establishing its value in the industry from the ground up is not only an enormous challenge but also a significant obstacle that each and every fresh business holder must conquer. When this happens, the entrepreneur has the option of purchasing a franchise, which grants them the right to deal in and sell the products of an already established brand for a predetermined amount of time in exchange for a royalty payment.

McDonald’s franchise is a trusted brand and a fantastic choice for anyone interested in opening a franchise in the food-related fast-food market. In the beginning, McDonald’s was known as a grill restaurant, but it eventually grew into the most successful chain of fast-food restaurants in the entire globe.

Mcdonald’s Franchise details and history

The two brothers, Maurice McDonald and Richard McDonald launched their business in the year 1940, which became famous as McDonald’s after that. As was described top section, the company’s beginnings may be traced back to its days as a grill restaurant. Despite this, Maurice and Richard started selling franchises of the business in 1955, which coincided with the great response they received and the success they achieved. As a direct result of their efforts, McDonald’s presently has franchises operating in more than 120 countries across the globe.

McDonald’s was originally just a grill restaurant, but it has since expanded its menu to include a wide variety of fast food options, including burgers, fries, wraps, fizzy drinks, ice cream, and much more.

At the moment, McDonald’s operates in over 36000+ stores across more than 120 countries around the globe. Their consumers can take advantage of a variety of combined meals, treats, promos, and services that satisfy their needs. They have a workforce of more than one million employees, which indicates that the brand itself is responsible for providing employment for millions of individuals. If we are talking about the client base, we can say that more than 56 million individuals are satisfied with the meals and combos that McDonald’s provides, and that figure is increasing each and every day.

Their menu is always being expanded to include more vegetarian and even non-vegetarian food products, providing clients with a wider variety of options from which to choose.

Why Choose Mcdonald’s franchise in India?

McDonald’s is an internationally recognized fast-food franchise with locations all over the world. Everyone is familiar with its logo and brand. It is present in more than 100 countries around the world. McDonald’s presently has more than 38,000 outlets and serves 7 crores customers daily. These figures are substantial enough to demonstrate that McDonald’s is among the top choices for franchisees looking to start their own burger shop or fast-food franchise in India.

Mcdonald’s Franchise Cost In India

To start a Mcdonalds franchise in India it can cost from 1.5 crore rupees to 2 crore rupees depending on the type of restaurant you want to start and other various components that affect the investment in starting the mcdonalds franchise in India.

But, as per company norms, a franchise owner must have 10 crore rupees in total(including franchise investment) in cash or in the bank account as the working capital of the restaurant. It is required due to volatile markets and trends. Sometimes you have to run your outlet at loss due to this volatility.

Below is the detailed cost or investment break down for starting a new McDonald’s franchise.

ExpenditureAmount
McDonald’s Franchise Fee30 lakh rupees
Civil Work Cost12 lakh rupees
Furniture Cost20 lakh rupees
TV, Hoardings, Signage, Reception15 lakh rupees
Seating Table chairs & portable furniture8 lakh rupees
Other interior Cost10 lakh rupees
Machinery Cost including
Kitchen Utensils, Oven, Baker, Deep Freezers, Fryers, etc…
35 lakh rupees
Other Cost (Training, Transportation, and Licencing)20 lakh rupees
Total minimal Investment1.5 crore rupees

Mcdonald offers 4 types of franchises to new franchise applicants. It is based on the type of city, the hype or trend of burgers and fast food in your city and the size of the outlet, the applicant want to open. The four types of Mcdonald’s franchises in India are:

  1. Traditional Restaurant: These are general/traditional outlets like other restaurants. It can be in Mall, Food court, Residential area, corporate park, etc… Traditional restaurants in Mcdonald’s are large in size and have a seating capacity of at least 50 people. With the Menu of all the products provided by the company and some stores also have party and event spaces. The franchise fees for Traditional restaurant of McDonald’s India will be 30 lakh rupees and is valid for the next 20 years.
  2. Satellite Location: This is a small canteen-sized restaurant where limited items are served and less space with less seating arrangement is there. This kind of outlet can be open in Airports, Schools & Colleges, Universities, etc… This kind of outlet plays a major role in takeaway services. The McDonald’s Franchise fee for this kind of store is 15 lakh rupees and the duration of the agreement can vary depending on the location and other factors.
  3. STO/STR Stores: STO stores means Small Town Oil stores. These stores can be at any location of petrol pumps or gas stations. It can be inside the town or on the highway. STR stores mean Small Town Retail Stores. STR stores can be at any retail shopping market or mall. These outlets will have all menu items and also will have a seating area.
  4. BFL Outlets: BFL stands for Business Franchise Lease. BFL are provided to giant corporate companies to open outlets in their working area canteens. It is provided for a minimum of 3 years lease. But it can be extended with mutual responses.

Mcdonald’s Franchise Profit margin in India (Monthly)

We’ll use a scenario to analyze the Mcdonald’s franchise profit margin in India. All costs will be subtracted from the gross revenue. We are estimating sales of 10,00,000 (ten lakh) rupees, or roughly 33,000 rupees each day. Below is the detailed profit breakdown.

ParticularsBest Case Sales
(in Rupees)
Average Case Sales
(in Rupees)
Worst Case Sales
(in Rupees)
Gross Franchise monthly Sales16,00,00010,00,0005,00,000
Raw Food Cost @ 35%-5,60,000-3,50,0001,75,000
Shop Rent-1,20,000-1,00,000-80,000
Electricity & water bills-30,000-20,000-15,000
Employees Salaries-2,20,000-2,00,000-1,30,000
Online Aggregator Commissions
(Swiggy, Zomator, etc…)
-40,000-30,000-20,000
Royalty Fee @4%+GST
Advertisement Fee @4%+GST
-1,51,000-94,400-47,200
Transportation-24,000-20,000-18,000
Other expenses
(Software, Store Maintenance, etc.)
-40,000-40,000-30,000
Net Monthly Profit3,85,000 (24% of sales)1,46,000 (14.6% of sales)-15,200 (-3% of sales)

According to our calculations, the McDonald’s franchise had a profit margin of 14.60% on sales of 10,00,000(ten lakhs) Indian rupees. Although the business may not make much money in the beginning, Burgers will gradually become very well-known and in high demand.

With effective local advertising and branding, sales can reach 12 lakhs Rupees each month, yielding a 22% to 25% profit margin.

Benefits of Mcdonald’s Franchise in India

  • the possibility of being your employer
  • a strong brand and a tested business approach
  • Training and assistance from the corporate staff of the organization
  • access to premium goods and advertising materials
  • flexible working hours

How to start a McDonald’s franchise in India?

At the moment, McDonald’s runs two businesses in India. You can get in touch with these two businesses to learn more about the franchise procedure and contract since they both function in various parts of India.

  • Regions in the North and East of India: Get in touch with Connaught Plaza Restaurants Private Limited if you want to establish a McDonald’s franchise in the North or East region of India. Previously held by Vikram Bakshi, this business is now entirely controlled by the parent company of McDonald’s. Any franchise in these two regions must first receive approval from this firm, which controls all the McDonald’s restaurants there.
  • Regions in the South and West of India: To open a McDonald’s restaurant there, get in touch with Hardcastle Restaurants Pvt. Ltd. You must get in touch with this organization if you have any franchise-related questions regarding the South and West regions of India.

You can read the 350–400 page Franchise Disclosure Document of McDonald’s to acquire a general concept of the terms and conditions of franchise ownership. You might also need to speak with your accountant and lawyer to fully comprehend it. This documentation will give you a solid sense of how a franchise works and its terms and conditions.

If a person wishes to start a McDonald’s franchise in their city, there are specific processes that must be followed. The following are the steps to applying for a McDonald’s franchise in India:

  1. Reading the McDonald’s Franchise Disclosure Document is the first thing that has to be done to start the process of becoming a McDonald’s franchisee. When one owns and operates a McDonald’s franchise, they are subject to a number of rules, regulations, and limitations that one must adhere to. Only that piece of information is provided by this document. The file, which is in PDF format, is readily available for download on the internet.
  2. The next thing to do in order to become a McDonald’s franchisee is to submit an application form in order to request the ability to vote. The candidate is required to provide some information about themselves, both personally and professionally, in the application form. The applicant is required to send in the application form after they have finished filling it out.
  3. The McDonald’s support team goes through the process of reviewing the application form, and based on their findings, the corporation decides which applicants to examine further and call for an interview.
  4. If the candidate is successful in both the test and the telephone interview, the next step is for the employer to assign them to any available position in the city.
  5. The individual is then educated regarding the operations of the shop. He or she will be instructed on the operation of the shop as well as the necessary characteristics for a franchisee to successfully operate the business.
  6. After that, the candidate is required to participate in a final interview that will be led by a panel of corporate representatives. If the person in question is able to successfully complete the interview, then McDonald’s will give them permission to start their own franchise.

List of Cities and states where McDonald’s Stores are available

States/RegionsCities
1. MaharashtraMumbai, Nagpur, Pune, Ahmednagar,
Amravati, Kolhapur, Navi Mumbai
2. Tamil NaduChennai, Coimbatore
3. Uttar PradeshNoida, Agra, Gorakhpur, Lucknow, Bareilly
4. GujaratAhmedabad, Baroda, Rajkot, Surat,
Bhavnagar, Porbandar, Bharuch, Gandhinagar, Vapi
5. KarnatakaBangalore
6. West BengalKolkata, Howrah, Sealdah, Purulia, Bolpur,
Darjeeling, North 24 Parganas
7. RajasthanJaipur, Jodhpur, Udaipur, Kota, Alwar
8. Andhra PradeshVizag, Trichy
9. TelanganaHyderabad
10. Madhya PradeshBhopal, Indore, Jabalpur
11. KeralaThrissur, Ernakulam, Trivandrum
12. DelhiNew Delhi, Delhi NCR
13. HaryanaGurgaon
14. ChhattisgarhRaipur, Bilaspur, Durg
15. PunjabAmritsar, Ludhiana, Chandigarh
16. OdishaBhubaneshwar, Cuttack, Puri
17. JharkhandRanchi, Jamshedpur

Conclusion about Mcdonald’s Franchise in India

In the current situation, any business’s surrounding environment is quite volatile. This is mostly because to the COVID-19 epidemic. The potential entrepreneurs are therefore afraid to invest their money. When purchasing a McDonald’s franchise, you must take into consideration a variety of variables and potential occurrences throughout the course of 5 to 10 years. The recent change in circumstances may cause the forecasts to change. The goal should always be to handle unforeseen circumstances without suffering significant loss or harm. To do it, one must take a calculated risk and maintain enough cushion. Avoiding risk is not a good idea in today’s business environment.

It is anticipated that the fast-food business would undergo significant transformation. Customers now choose to order takeout over dining out frequently. Since no one like eating cold food, quicker meal packages should be the main focus. Additionally, consumers are becoming more concerned about food safety. It must thus be upheld at all costs. We thus hope that you now fully comprehend the conditions for the McDonald’s franchise price in India.

FAQ

Is McDonald’s franchise profitable in India?

Yes, Mcdonald’s franchise is profitable in the markets of India. It’s reputation, branding, Varieties of menu, Quality of food & services attracts customers and retain them in a period of time.

What is the ROI time of McDonald’s Franchise?

If you study the Franchise Disclosure Document (FDD) that McDonald’s provides, you will see that company have set an expected time at which you will convert your investment into profit. According to the FDD, it will take you two to three years to break even, after which the majority of your revenue would come from net profits.

What is a Franchise Disclosure Document?

The paper, which is over 400 pages long, provides a general summary of the rights, responsibilities, and obligations of McDonald’s franchise owners. An applicant must sign the Franchise Disclosure Document before submitting an application for a McDonald’s franchise (FDD).

How much does McDonald’s Franchise Cost in India?

The McDonald’s (mcd) Franchise in India will cost you around 1.5 crore rupees. How ever you will need to have nearly 2.5 crore rupees in your cash/bank balance to maintain the store.