McDonald's franchise finance: how UK franchisees fund a restaurant

McDonald's franchise finance is the funding a prospective franchisee puts together to take on a McDonald's restaurant in the UK: usually a substantial amount of their own unborrowed money plus a business loan from a bank or specialist franchise lender. This guide is for people assessing whether they could fund a restaurant and what lenders will want to see. Smart Funding Solutions is an independent broker, is not affiliated with McDonald's, and can compare franchise lenders on its panel on your behalf. For franchise funding in general, see our franchise loans page.

McDonald's sets a minimum level of personal, unencumbered funds that applicants must have before they are considered. Requirements change, so always check McDonald's UK franchising information for its current position.

01What a McDonald's franchise costs

McDonald's publishes these figures for UK franchisees, as at October 2026:

The sales, rent and cash flow ranges cover most of McDonald's franchised UK restaurants in 2025, not every site. Check the current figures on McDonald's UK franchising pages. The balance you do not put in yourself is what a bank or specialist franchise lender would be asked to fund.

The total cost depends on the restaurant, its location and whether you are taking over an existing site. Costs typically fall into two groups.

Upfront costs

• The initial franchise fee
• The purchase price of the restaurant's equipment, fixtures and business (for an existing site)
• Working capital to cover the early months of trading
• Professional fees, such as legal and accountancy advice

Ongoing costs

• Service fee or royalty: a percentage of sales paid to the franchisor
• Rent: McDonald's typically owns or controls the property, so franchisees pay rent, which may be linked to sales
• Marketing contribution: towards national advertising
• Staff, stock, utilities and maintenance

Ask for full, current figures during the application process and have an accountant review them.

02How much is a McDonald's franchise in the UK?

McDonald's UK says that, for 80% of its restaurants franchised in 2025, the typical payment needed to buy the franchise rights and equipment for a first restaurant was between £900,000 and £1.5 million. Its minimum financial requirement is 25% of the total investment in unencumbered funds, and it says the remaining 75% can be funded by a bank. When we checked its financials page on 18 October 2026, McDonald's put the unencumbered funds needed at circa £350,000 (McDonald's UK, the financials), so always check the current figure before you plan your contribution.

Applied to the published range, the 25% and 75% split works out as follows. These are illustrations of McDonald's own percentages, not quotes:

What the McDonald's franchise price buys

The payment buys the franchise rights and the restaurant's equipment. It does not buy the property: McDonald's charges rent, which ranged between 8% and 18% of net sales for most franchised restaurants in 2025 and is typically fixed for 20 years on the initial term. On top of rent there is a monthly royalty of 5% of net sales and a marketing fund contribution currently set at 4.3% of net sales. McDonald's models a potential return of 20% to 25% a year over the term, and notes that this does not take account of future investment in the business during the 20-year term.

Is the McDonald's franchise cost the same for every restaurant?

No. The price depends on the restaurant, its sales and its location, which is why McDonald's gives a range rather than a single figure. Lenders size the 75% they are asked to fund on the specific restaurant's trading and your own contribution, so a bank will want the figures for the restaurant you are offered before it commits.

03How the funding usually fits together

04Eligibility beyond money

McDonald's selects franchisees carefully. Alongside the minimum funds, it looks for business and people-management experience, commitment to running restaurants hands-on, and willingness to complete its training programme. Franchising is not a passive investment.

05Financing options for McDonald's franchisees

Bank and franchise loans

Several UK banks and specialist lenders have franchise teams that lend to franchisees of established brands. They like the proven model, brand support and trading data a large franchisor provides, which can make terms more favourable than for an independent start-up. They still require a significant personal contribution.

Secured business loans

If you own property, a secured business loan can provide larger sums or lower pricing, but your property is at risk if repayments are not met. Borrowing against property to fund the minimum personal contribution may not be acceptable to the franchisor, so check first.

Asset finance

Kitchen equipment, fit-out items and technology can sometimes be financed separately through hire purchase or leasing, which preserves cash. Read about commercial kitchen equipment finance.

Working capital facilities

Once trading, franchisees may use overdrafts, revolving credit or short-term loans to manage stock, payroll and seasonal variation.

06What lenders look at

• The size and source of your personal contribution
• Your personal credit history and assets
• Your management and hospitality experience
• The restaurant's historic trading figures (for an existing site) or projections
• A detailed business plan and cash flow forecast, including all franchise fees and rent
• The franchise agreement terms

Many lenders will also ask for a personal guarantee. Make sure you understand what that means before signing.

Several UK banks and specialist lenders have franchise teams that lend to franchisees of established brands.

07Evaluating profitability

Profitability varies widely between restaurants. The biggest influences are location and footfall, opening hours, drive-thru capacity, labour costs, rent and the share of sales paid to the franchisor. Do not rely on published averages: ask for the actual trading history of the restaurant you are considering and have it reviewed independently.

08How much does a McDonald's franchise owner earn in the UK?

McDonald's does not publish a salary for UK franchise owners. What it does publish is a typical annual cash flow of £120,000 to £400,000 after the first year, and it defines that as the money left in the business before the owner takes a personal draw and before paying any loans or outstanding tax (McDonald's UK, the financials). The owner's real income is what remains after those come out.

What comes out of cash flow before the owner is paid

• Loan repayments: McDonald's says up to 75% of the investment may be funded by a bank, and capital and interest on that loan are paid from cash flow.
• Tax: corporation tax if you trade through a company, or income tax as an individual, plus any tax owed on what you draw.
• Reinvestment: refurbishments and equipment over a long agreement. McDonald's notes its modelled return of 20% to 25% a year over 20 years does not account for future investments.
• A reserve: for slower periods and unexpected repairs.

Why the range is so wide

Cash flow follows sales, and McDonald's reports that 80% of its UK franchised restaurants had sales between £2.0 million and £5.8 million in 2025. Rent of 8% to 18% of net sales, a 5% monthly royalty and a 4.3% marketing contribution all scale with sales, while staff and food costs depend on how the restaurant is run.

Lenders look at the same figures from the other side: they want cash flow to cover repayments with room to spare before you draw anything. Our page on franchise loans explains how lenders test affordability, and our guide to managing business loan repayments covers planning around them.

09McDonald's franchise loan repayments: a worked example

McDonald's says up to 75% of the investment can be funded by a bank. The table applies that to two points in its published range and works out a year's repayments over 10 years. Our panel has no McDonald's product, so we have used the rates secured business loans of this size and term show on our panel, 8.99% to 12.9% a year; a bank's franchise team sets its own price, term and security.

Set those against McDonald's typical cash flow of £120,000 to £400,000 a year after the first year, which comes before loan repayments, tax and the owner's draw. At the bottom of that range, repayments on £900,000 would take more than all of it; at the top, they leave about £239,381 to £263,249 before tax and reinvestment. That is why lenders look at the specific restaurant's sales, and why a larger own contribution or a longer term changes the answer. Indicative ranges from lenders on our panel, checked October 2026; your rate depends on your circumstances.

10Steps to funding a McDonald's franchise

1. Check McDonald's UK's current franchisee requirements and confirm you meet the minimum funds.
2. Talk to an accountant about costs, tax and company structure.
3. Prepare a business plan and cash flow forecast.
4. Compare lenders with franchise experience, directly or through a broker.
5. Take legal advice on the franchise agreement and any loan and guarantee documents.

We can compare franchise lenders on our panel and manage the application once you have the franchisor's figures. It is free to enquire; any broker fee is disclosed separately before you proceed. For a different quick-service brand, see our Subway franchise finance guide, or explore funding options online when you are ready.