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This statistic highlights McDonald’s Revenue Breakdown by Store Type from Q1 2010 onwards, split between Company Operated Stores and Franchised Restaurants.
McDonald’s Corporation generated total revenue of $5.04 billion in Q1 2021 through:
|Category||Q1 2021||Q1 2020||YoY Growth||Revenue share in Q1 2021|
|Company Operated Stores||$2.16||$2.03||6%||43%|
(All figures in billions, except percentages)
Company Operated Stores
Operating a company-owned store allows McDonald’s to improve its operations, enhance customer service and ultimately build a high degree of customer loyalty. Mcdonald’s tests the reforms suggested by its franchisees in its company-operated stores and if they feel it is viable, it is efficiently implemented across all the stores.
McDonald generated a total of $5.04 billion of which the company-operated stores contributed $2.16 billion in Q1 2021. Revenue from the company-operated store has witnessed 6% year-over-year growth in Q1 2021 from $ 2.03 billion of Q1 2020. As of Q1 2021, McDonald’s owns 2,676 company-operated stores worldwide.
McDonald’s has been a franchising company since 1955. McDonald’s is primarily a franchisor and considers that franchising is important to deliver tasty food, render locally relevant customer experiences, and accelerate profitability. Franchising enables an individual to be the owner of the store, and exercise control over employment, marketing, and pricing decisions, at the same time take the advantage of McDonald’s global brand image, its operating system, and financial resources.
McDonald’s franchised stores are owned and operated under one of the following structures – conventional franchise, developmental license, or foreign affiliation.
In a conventional franchise arrangement, Mcdonald’s owns or secures a long-term lease on the land and building for the restaurant location and the franchisee pays for seating, signs, equipment, and decore. The franchisee reinvests capital in the business and Mcdonald may also co-invest with franchisees to make improvements in the store. Conventional franchisees contribute to the revenue of McDonald’s by making the payment of rent and royalties which are calculated as a percent of sales. As of Q1 2021, Mcdonald’s has 21,496 conventional franchised stores.
In a developmental license arrangement, licensees are accountable for operating and managing the business. Licensees invest the capital including the investment in real estate. Mcdonald’s does not invest any capital under a developmental license and it receives a royalty based on a percent of sales and also receives initial fees upon the opening of a new restaurant. As of Q1 2021, Mcdonald’s has 7,705 developmental licensed stores.
Affiliate arrangements are largely similar to a developmental license, however, affiliate arrangements are used in a limited number of foreign markets usually in China and Japan. In this arrangement, Mcdonald’s holds an equity interest in the associated store. As of Q1 2021, Mcdonald’s has 7,283 affiliated stores.
Mcdonald’s revenue from franchised restaurants is 57% of total revenue amounting to $2.88 billion in Q1 2021. The revenue has increased by 10% year-over-year from Q1 2020. However, sales from franchised restaurants are not recorded as revenue by McDonald’s, yet the sales information is important because these sales are the basis on which Mcdonald’s calculates and records its franchised revenues, and also such data indicates the financial health of the franchisee store.
McDonald’s Corporation is an American-based company that was incorporated in May 1940 by the McDonald brothers- Maurice James and Richard James. Its headquarters is in Chicago. McDonald’s Corporation completed its initial public offering in 1965 and its common stocks are traded on the New York Stock Exchange under the trading symbol “MCD”.
Mcdonald is the world’s largest fast-food restaurant chain who is best known for its hamburgers, cheeseburgers, and french fries. They also sell other food items like salads, fish, smoothies, fruit, soft drinks, milkshakes, wraps, desserts, and breakfast items.
In 1955, Ray Kroc, an entrepreneur, discovered that the brothers had developed a process to produce large amounts of food at a low cost by pre-cooking and reselling it through their restaurant. He proposed to start the franchise for the brothers and thus first franchised store of McDonald’s was opened. Today it is located in more than 100 countries with over 39,000 restaurants worldwide. Some of the major competitors of McDonald’s are Starbucks, Subway, Taco Bell, Chick-Fil-A, Wendy’s, Burger King, Domino’s, Pizza Hut, KFC, etc.
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