Picture this: the laughter is heard in the background, the smell of French fries is all over the surroundings, and burgers are served with cold drinks.
I know most of you figure out what I’m talking about. McDonald’s is not the ordinary QSR in India; it’s an experience where people plan to visit and eat their favorite burgers.
When people come, the first thing they do is click photos with Ronald McDonald, who is a clown mascot of this brand. Now, look at the business point of view of McDonald’s since 1996, the franchise has over 300 stores, and it is expected that by 2030, it will have 600.
There are many good reasons to start a McDonald’s franchise. However, I will cover the details of the franchise cost and much more that you should know. At the end of the article, you can make an informed decision.
McDonald’s Franchise Cost in India(Full detailed article)
First, you must note that McDonald’s does not offer fixed prices, as it depends on the location, type, size, and many other operational factors.
Let’s know the costing structure in detail:
1. Initial franchise cost
- Franchise fee- Rs 30 Lakhs – Rs 35 Lakhs( One time)
This is the franchise cost; you must pay a one-time fee to use their brand name, system, and operation training support. McDonald’s grants you the right to use their brand name, generally for 20 years.
2. Restaurant set-up cost
Set-up costs are the significant expenses you must incur as you build from scratch according to the franchise‘s policy. It varies by outlet formats, including mall, standalone, highway, or food court.
- Construction and Civil work
It will cost around Rs 1.5 crores—Rs 2.5 crores, and it generally includes flooring, plumbing, washrooms, customer service counters, and layout creations.
- Interior and exterior design
The estimated cost is about Rs 50 lakhs—Rs 1 crore, which includes brand-color-theme furniture, seating arrangements, lighting, air conditioning, and much more.
3. Machinery and kitchen equipment
Machinery and equipment will cost around Rs 70 lakhs- 1.5 crores.
It generally includes refrigerators, grilling machines, POS systems, digital menus, Billing setup machines, beverage dispensers, warming trays, and deep fryers.
4. Staff recruitment and training.
Running a franchise business requires training because it is not a random venture. You must adapt according to the franchise standards, which provide training.
- Costing: 10-25 Lakhs approximated
It includes pay, employee orientation, training courses in the McDonald’s training center, staff uniforms you hire, operation guidelines, and even the certification of hygiene and service standards.
5. Opening inventory
- Approximate cost: 5 to 10 Lakhs
Includes the first stock of ingredients (buns, patties, sauces, oils, cold drinks, etc.), disposable packaging materials, cleaning products, and food-grade supplies.
Many franchise businesses forget this, but it is the most important thing to remember; otherwise, your daily operations will be delayed.
6. Marketing and Promotion Launch
- Cost: Rs 5 -15 Lakhs
Although Macdonald’s does need an introduction to be promoted, people are not aware that it is open, so consider this: to convince people to leave their homes, or make them aware that they can visit and avail of exciting offers.
7. Legal Compliance and Licenses
Agreement Cost: Rs 5 -10 Lakh Rupees
Includes:
- Food license FSSAI
- GST registration
- Licenses for local trade
- Safety and fire approval
- Compliance with Labour law
- Shops & Establishments registration
These are the formalities you need to fulfil with that cost.
8. Working Capital (3–6 months)
Business is uncertain, so you need at least 3-6 months of resources yourself to maintain daily expenses and fixed costs, which are incurred monthly.
Estimated Cost: Rs 50 Lakhs – Rs 1 Crore
Counters rent costs, electricity, salaries, restocking costs, maintenance costs, and daily running costs up to the outlet’s profitability time.
9. Legal and Working Costs
Estimated cost: Rs 5 -8 lakhs.
This includes expenses for drafting a franchise agreement, a CA consultation, a legal advisor, a tax filing charge, and a bank processing charge.
You May Also Read: Tata 1mg Franchise Cost in India
Top 10 Reasons Why McDonald’s Franchise is a Superb Business Chance
1. Globally Recognized Brand that is Also Locally Attractive
McDonald’s is not only a fast-food chain but one of the most well-known brands on Earth. McDonald’s has gained customers’ trust in India through its flexibility, such as the foods it offers internationally and in terms of local preferences.
The brand that changes its strategy according to the culture, country, and preference will never face failure, and that is what McDonald’s has done over the years. It changes its menu according to local tastes.
So when you buy a franchise of such a famous brand, you will not need to create a base of loyal customers from day one. And you will not make a brand; the name is self-explanatory.
2. Try and Test the Business Model
In India, McDonald’s entered in 1996, and till now, it is growing faster than any other food franchise. It has a tried-and-tested business model, and more than 300 countries have adopted it.
All its operations, including processes involved in cooking and customer services, are engineered and can be duplicated. This reduces your learning time and will help you scale your business much sooner, particularly if you intend to open some outlets.
3. Advanced Training and Operation Facilitation
McDonald’s offers extensive training to franchise owners, including how to operate a kitchen, food safety, employee management, customer service, inventory handling, and advertising.
You will also receive continuous operations support and regular audits to maintain the quality of the services. What else do you want?
Many franchise owners of other companies have complained that they have not received training support after paying franchise fees to the owner. Still, you won’t face that situation with the McDonald’s company because they are very professional with everyone.
I am telling you a real story. My friend has joined McDonald’s. While making burgers, he mistakenly filled an aloo tikki with a non-standard size, and while serving a customer, his manager saw.
He immediately asked him to replace the burger as it was not of standard size.
So you can get an idea of how professional they are.
4. Powerful and Sound Supply Chain
Ingredients, quality, and vendors are among the most challenging aspects of a food business.
McDonald’s manages this by using its world-class supply chain network in India. Because of its organized network, raw materials are obtained through verified suppliers and delivered when needed.
This ensures the consistency of products and food safety and lessens the burden on the management.
5. Marketing and advertising support at the national level
The best part is that you will get McDonald’s strong advertising efforts without incurring extra expenses.
Everything involving national promotions, television advertisements, online advertising, social media campaigns, and even the featuring of influencers, among other things, is handled at the company level alone.
A nearly 80-year-old brand already has a considerable market. From a promotional point of view, you will get the cream in return.
Because such big-impact campaigns also directly increase the number of people entering your store and bring your brand to the forefront of local thought.
6. Adapted menu according to the Indian market
Unlike many international chains, McDonald’s has customized its menu (according to India). It satisfies the local market and food preferences through popular food items such as McAloo Tikki, Maharaja Mac, McSpicy Paneer, and other vegetarian food items.
This menu approach will surely expand your reach in the Indian market, particularly in geographical areas where people prefer vegetarian meals.
7. Various Franchise Formats to be obtained
McDonald’s allows different formats according to your preference, budget, and location.
It can be a single restaurant, a food court in a mall, on a highway, or a non-standard store: at an airport or a train station.
This versatility will enable you to join the franchise model at a point where you can afford its investment.
You May Also Read: Burger King Franchise Cost in India
8. Customer retention and high Footfall
McDonald’s doesn’t have a target audience based on age. It has a broad audience that comes from all different ages. Trust me! Every generation enjoys visiting McDonald’s because of its variety and adjustable brands, which suit everyone.
Moreover, it prides itself on its low prices, fast services, cheap family-friendly setup, and repeat visits. These are enough reasons to attract customers to the outlet.
9. Ongoing Innovation and Technology Integration
McDonald’s regularly invests in technological advancements in services, such as self-service kiosks, online ordering, cell-phone apps, or third-party delivery, such as Zomato and Swiggy.
They keep surveying with people about their services and take key notes on how they can improve and make it more customer-friendly.
These innovations enhance and improve customer experience, allowing you to simplify your store operations and outperform your competition.
FAQs
How much are the royalty fees charged by McDonald’s?
McDonald’s charges a 4% royalty fee for monthly revenue plus 4% for marketing and advertising.
Do I need prior experience in the food industry to apply?
No, having expertise in the food industry is not mandatory, but it’s a plus if you do. However, McDonald’s provides training and support to all the franchise owners.
How long does it take to open a McDonald’s franchise after a franchise is taken?
It usually takes 6-12 months from application approval to store launch, depending on construction, training, and equipment installation.
Conclusion
Owning a McDonald’s franchise is not just about a fast-food outlet; it’s about becoming a part of one of the most reputable food chain companies. If I talk about the promotion part, McDonald’s does not need any introduction, because it is a benchmark for many food chain brands.
It keeps rising in India, and it will increase further in the coming years. So, if you’re financially able, then owning a McDonald’s franchise should be a consideration.
