McDonald's Franchise Cost: Startup & Ongoing Costs

A McDonald's franchise costs far more than its franchise fee. The buy-in also covers equipment, signage, seating, opening inventory, and a cash reserve for the first months. The size of the bill depends on the restaurant format and on how much of the cost the franchisee pays up front.

The numbers here come from Item 7 of the franchise disclosure document (FDD), the section where a franchisor must list its estimated initial investment. Third-party summaries read the same filing, so their ranges line up closely but not always exactly. The tables below show what each source reports, checked Oct 12, 2026.

For a traditional restaurant, the 2026 FDD puts the total initial investment at $1,470,500 – $2,807,000, according to VettedBiz. That is the all-in figure for a standard building, not a down payment. The low end assumes the smaller end of every line item, and the high end assumes a larger restaurant with higher equipment and site costs.

Two fixed requirements sit on top of the range. The initial franchise fee for a new restaurant is $45,000. Applicants must also show $500,000 in liquid capital that is not borrowed. Lenders and the company treat that as proof the owner can fund the opening without financing the entire buy-in.

The traditional restaurant is the most expensive format. Smaller formats, such as satellite locations and small-town sites, report lower totals because they involve less building, less equipment, or both.

Satellite locations report the lowest totals, well below a full restaurant, and the small-town formats fall in between. Ask the company which formats it is offering in your area, since it decides where and how it grows.

Most of the investment for a traditional restaurant goes into physical build-out rather than fees. The breakdown below separates the largest categories.

Signs, seating, equipment, and decor make up the largest block. The additional funds line is working capital for the first three months of operation. Miscellaneous opening expenses and opening inventory are the two smallest lines.

A franchisee also pays recurring charges to the company for as long as the restaurant operates. These include a service fee, a rent or occupancy payment where the company owns or leases the site, and contributions to national and local advertising. Each is typically a percentage of sales, and the exact terms are set in the FDD rather than quoted here. Because they scale with revenue, a busy restaurant pays more in dollars even when the rate stays the same.

Other ongoing expenses are the same ones any restaurant faces: labor, food and paper, utilities, repairs, reinvestment in the building, and insurance. The company may also require periodic remodels and equipment upgrades, which can be a large cash outlay years after opening.

• Restaurant format. Traditional, small-town, and satellite units carry very different totals.
• Real estate. Whether the company owns or leases the site affects what you pay up front and what you pay monthly.
• Equipment and decor package. The current design standard sets much of the build cost.
• Location. Construction and labor costs differ by market.
• Working capital. Operators who want a larger cushion may set aside more than the minimum.

The FDD is a legal document that franchisors must give prospective buyers. Item 7 covers the initial investment, Item 6 covers other fees, and Item 19, when included, covers financial performance. Read the footnotes, since they explain what each estimate includes and which costs are refundable. Because the filing is long and the commitment is large, review the current FDD with a franchise attorney before signing anything. An accountant can help you test the numbers against your own finances.

The liquid capital requirement matters as much as the total. The company asks for cash that is not borrowed, so a buyer cannot cover the whole minimum with a loan. Whatever sits above that minimum can often be financed, but each lender sets its own terms, and the FDD describes the company's own conditions on financing.

Compare the total against what you can actually put in. A buyer with the required cash but little left over has less room for a slow first quarter, and the additional funds line in the cost breakdown is there for exactly that reason. A shortfall in early working capital is a common reason new restaurants struggle, so treat that line as a floor rather than a target.

The initial franchise fee of $45,000 buys the right to operate under the brand for the term of the agreement. It does not pay for the building, the equipment, or your first inventory. Those costs appear in the breakdown above, and most of them go to contractors and suppliers rather than to the company. Ask which costs, if any, are refundable if the deal falls through, and read the footnotes to Item 7 for the answer.