McDonalds Franchise in India: Cost & Process [Feb’24]

Currently, McDonald is not giving franchise in India. This blog post is solely for informational purposes and should not be considered as professional advice. Always consult with a qualified expert before making any legal, financial, or business decisions based on this information.

 

Please Note: As per the latest information on McDonald’s India’s official website, the company has announced that they are not accepting new franchise applications in India at the moment. They caution against engaging with anyone claiming to provide McDonald’s franchises on behalf of McDonald’s or HRPL, as these could be fraudulent schemes.

 

McDonalds Franchise

 

Therefore, if you are considering establishing a McDonald’s franchise, it’s important to note that McDonald’s is currently not providing any franchising opportunities.

Read this for more information: Click Here

 

McDonald’s is one of the leading fast-food chains in India and its popularity and demand doesn’t seem to slow down anytime soon. People from every age group are fond of the treats from McDonald’s.

The vast and scrumptious product range is indeed their key to success, but the extremely quick service is the cherry on top.

Many entrepreneurs have started investing in this globally renowned fast food- chain, and now is your time to take that step!

McDonald’s has an estimated valuation of a whopping $240 Bn and without any doubt is an exceptionally fruitful venture.

Let’s take a brief look at the McDonalds Franchise in India and how fruitful they might prove to be for you!

 

Beginning of McDonald’s

With over 60 years of history, McDonald’s is the world’s largest fast food restaurant developed from a mere barbeque stand! 

The McDonald brothers, Richard and Maurice McDonald, in 1948 commenced their first McDonald’s restaurant by transforming their tiny drive-thru barbeque joint into a burger and milkshake joint in San Bernardino, California.

This was Richard and Maurice McDonald’s second attempt into the food industry, first attempt being a hot dog stand.

The original McDonald’s retailed their offerings for half the price and in half the time of their competing restaurants. Their menu included fries, shakes and burgers. They managed to best their competitors by diverging from the traditional ways by which a hamburger shop operated. McDonald brothers came up with the installation of self-service counters to refrain from relying on waitresses and waiters.

They pre-prepared all of their orders and kept them fresh and warm under high-powered hit lambs instead of cooking each meal after receiving orders, which helped them cut the waiting time, which gave them an exceptional edge against their competitors.

The revolutionary restaurant system, Speedee Service System was developed by the McDonald brothers to streamline the food preparation process and deliver faster.

The McDonald brothers purchased several multimixers from Ray Kroc who was a kitchen appliance salesman. Kroc was highly impressed by the success and efficiency of their system, and saw the potential for a much larger-scale operation.

By 1954, Kroc convinced the McDonald brothers to expand their operations nation-wide and to let him franchise it. 

 

McDonald’s Outlets

In 1955, Kroc founded the predecessor of McDonald’s Corporation, namely, McDonald’s System, Inc, which oversaw the expansion and franchising of McDonald’s restaurants. In the same year, Kroc established the first franchised McDonald’s restaurant, turning it from a single-location operation in California to a national and eventually a global fast-food chain.

By 1966, Ray Kroc completely bought out the founding brothers and ran the company himself.

McDonald’s proudly owns a whopping number of 38,000 outlets in over 100 countries all around the world!

Launch of McDonald’s in India

McDonald’s first commenced its operations in India in 1996 in the city of Bollywood, Mumbai.

McDonald’s currently operates an estimated number of 170 outlets in India and plans to expand to an estimate of 580-630 by 2027.

 

McDonald’s Menu

McDonald’s in India offers a wide variety of both Non-  Vegetarian and Vegetarian burgers, fries, freshers, shakes, breakfast items, and their famous happy meals in accordance to every taste. 

McDonald’s provides its wide range of products at a moderate price and at a quick delivery time.

You can often hear wailing of children at a McDonald’s outlet, requesting for the extremely popular and kids’ favorite Happy Meal, consisting of a healthy drink, burger, fries, a healthy side and a toy. 

Every Indian is well acquainted with their scrumptious burgers and their pizza McPuffs served with your favorite cold drink topped up with ice-cream (McFloat).

McDonald’s  has now also expanded their operations with a new kind of outlet, the McCafe, serving breakfast and confectionery items including cookies, shakes etc.

 

Reasons to Choose a McDonald’s Franchise

  • McDonald’s is the world’s largest Quick-Service Restaurants chain.
  • McDonald’s is one of the extremely well-established and known brands all over the globe.
  • McDonald’s provides support throughout the franchise operation and even at later stages if necessary. 
  • McDonald’s has award-winning marketing campaigns and strategies, and advertises well.
  • McDonald’s is already a successful business model.
  • You get to use the trademarks and operating system of one of the best and leading brands in the world.
  • Local and national support is provided by McDonald’s at every step.
  • They provide extensive and world-class training.
  • Field offices provide responsive and collaborative business support.
  • McDonald’s provides an excellent network of supply chain partners who make sure the restaurants are provided the highest-quality products at the economical prices.

 

McDonalds Franchise in India Cost & ROI (Expected)

McDonald’s offers 4 kinds of franchise outlets, completely dependent upon the size and locality of the store. McDonald’s also expects a franchise fee and lease agreement in accordance to the type of franchise model. 

 

Here are the 4 types of franchises listed below alongside their lease agreements and fees-

  • STO/STR Locations- STR stands for ‘Small Town Retail’ locations whereas STO stands for ‘Small Town Oil’ locations. STR locations are situated near mall or large department stores in small towns whereas STO locations are situated near rest areas and petrol pumps or highways. These generally contain the full range menu along with a dining area.
  • BFL Franchise- BFL stands for ‘Business Franchise Lease’ which is meant for corporations to establish McDonald’s canteens in workspaces. Initially, this type of franchise is provided with a 3 years lease agreement but can be extended if the response recorded is good and is maintained well.
  • Traditional Restaurant- These are the typical outlets situated in corporate or residential buildings, malls and food courts. These areas come with both dine-in and party areas and are big in size. They are provided with a full ranged menu. Lease agreements provided with this sort of an outlet are for 20 years. And the franchise fee stands at an estimate of INR 30 L. 
  • Satellite Location- These outlets are situated in airports, colleges, universities etc and come with a short menu containing only specific items. They generally provide takeouts only. The lease agreements solely depend upon the location and size of the outlet whereas the franchise fee stands at an estimate of INR 15 L. 

Further capital worth INR 6.6 Cr to INR 14 Cr would be required for equipment, maintenance, staff training, and other set-up costs. 

A safety capital (liquid capital) worth INR 5 Cr would also be required for any unexpected expenses.

An average cost of owning a McDonald’s franchise is given below-

Essentials Cost & Other Requirements
Franchise Cost INR 25- 30 L
Civil Work Cost INR 10 L
Furniture Cost INR 11 L
Development Cost INR 20- 30 L
Machinery Cost INR 35 L
Training & Support Cost INR 20 L
Interior Cost INR 20 ;
Advertising Cost 3% of Gross Sales
Royalty Fees 4% – 6% of Gross Sales
ROI/Break Even Time Frame 2 – 3 years
Area Requirements 750 – 1500 sq. ft.
Total Infrastructure Investments INR 6.6 Cr – 16 Cr

The average franchise fee for a McDonald’s franchise stands at INR 25 – 30 L.

The advertising cost and royalty fees stand at 3% and 4% – 6% of gross sales respectively. 

The ROI/Break Even time frame is 2 – 3 years and the area requirements are 750 – 1500 sq. ft.

Total infrastructure investments stand at INR 6.6 Cr to INR 16 Cr.

 

McDonald’s Profit & Profit Margin

A McDonald’s franchise is an extremely profitable business venture in India but the profit and profit margin is variable in accordance to the outlet type, location, footfall etc.

McDonald’s franchise outlets on an average incurs an annual revenue of INR 2.6 Cr.

For every INR 1 L revenue generation, then the franchisee will make a profit of INR 20 – 25 K. Which means the profit margin ranges from 20% – 25%.

We encourage you to carry out a thorough research before investing in any franchise outlet. 

 

Steps to Apply for a McDonalds Franchise in India

A procedure is to be followed carefully to apply for a McDonald’s franchise, here are the steps to become a part of the McDonald’s Franchise operations-

STEP 1: Reaching out the McDonald’s Team- Visit the McDonald’s website or reach out to the McDonald’s franchising team. Necessary guidance and information will be provided.

STEP 2: Application Submission- Carefully fill out the application form with the required data including some documents and submit it.

STEP 3: Background Check- Once the application is collected, McDonald’s team proceeds with a background check to analyze the eligibility and other factors.  A personal interview might be carried out.

STEP 4: Approval of Agreement and Signing- You will be granted approval if you pass the eligibility criterion. You will be then required to sign and agree upon a terms and condition document provided by McDonald’s. 

STEP 5: Construction and Site Selection: With the assistance of the McDonald’s team, you will then be required to identify a suitable location for your outlet, and begin the construction. 

STEP 6: Support and Training- A thorough and comprehensive training will be provided to you and the staff by the McDonald’s team before the commencement of your very own McDonald’s franchise outlet. Constant support and guidance will also be provided to you even after the opening of your outlet by the McDonald’s team.

The opening of a McDonald’s franchise outlet is likely to take 1 – 1.5 months.

 

Read also:  Vending Machine Price List in India

 

Eligibility Criterion for a McDonalds Franchise in India

McDonald’s is a globally renowned and well- established brand. It is a leading QSR chain globally and hence requires its future owners to tick a few criterions, including-

  • Applicants must have experience in the food service industry.
  • Applicants must have a net worth of INR 5 Cr.
  • Applicants must be willing to stay with the franchise for almost 20 years.
  • Applicants must have minimum liquid capital worth INR 1.5 Cr.
  • Applicants should be open to learning and accepting of challenges. 
  • Applicants must possess an entrepreneurial spirit.

 

Documents Required for a McDonalds Franchise in India

A number of documents or certificates are required to own your very own McDonald’s franchise, the list is given below-

  1. Proof of funds
  2. Financial statements
  3. Thorough business plan

Other documents might also be asked for.

 

CONCLUSION

Get ready to become well acquainted with success once you invest in a McDonalds Franchise in India. McDonald’s is globally the biggest food chain service and has a huge sum of fans all over the world. Just like there is no compromise by McDonald’s when it comes to hygiene and taste, you shouldn’t compromise when it comes to investing in a McDonald’s franchise either!

 

Frequently Asked Questions (FAQs)

 

Is McDonalds Franchise in India Profitable?

McDonald’s is globally the largest fast food service chain and a well established brand. A McDonald’s franchise is an extremely profitable business venture in India but the profit and profit margin is variable in accordance to the outlet type, location, footfall etc.

 

What is the tenure for a McDonald’s franchise?

20 years is the tenure for a McDonald’s franchise outlet.

 

What is the franchise fee for a McDonald’s franchise?

The franchise fee for a McDonald’s franchise is INR 25 – 30 L.

2 thoughts on “McDonalds Franchise in India: Cost & Process [Feb’24]

    1. Team says:

      Hi,

      We do not provide McDonald’s Franchise. McD also do not provide franchise in India to any individual person in India.

      This is a blog for information only about McDonald.

      Thanks.

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Planning to start vending machine business? Click Here

X