{"id":1089863,"date":"2021-04-29T02:16:56","date_gmt":"2021-04-29T07:16:56","guid":{"rendered":"http:\/\/origin-www.tasteofhome.com\/?p=1089863"},"modified":"2024-10-14T05:39:36","modified_gmt":"2024-10-14T10:39:36","slug":"the-real-way-mcdonalds-makes-their-money","status":"publish","type":"post","link":"https:\/\/www.tasteofhome.com\/article\/the-real-way-mcdonalds-makes-their-money\/","title":{"rendered":"The Real Way McDonald\u2019s Makes Their Money\u2014It\u2019s Not Their Food"},"content":{"rendered":"McDonald\u2019s sells a lot of food. Like, a lot<\/em> of food. We\u2019re talking enough food to serve more than 70 million people every day, with more than 75 burgers sold every second. (And did you know McDonald's has birthday cakes<\/a>?)\r\n\r\nThat shouldn\u2019t be too surprising, considering McDonald\u2019s is one of the largest fast-food chains in the world. But their menu actually isn\u2019t what generates the company\u2019s multi-billion dollar profits. The real best-seller? Real estate.\r\n\r\nThere are more than 36,000 McDonald\u2019s locations worldwide, but only about 5 percent of them are company-owned. The rest are franchised out, meaning they\u2019re run by individuals who McDonald\u2019s has contracted to operate them. In those situations, the company only spends money on the real estate of that location. The franchise is responsible for all the costs of running the restaurant while also paying McDonald\u2019s for rent (which adds up to an average of 10.7 percent of their sales), a $45,000 franchise fee and a monthly service fee equal to 4 percent of gross sales, Business Insider<\/em> reports<\/a>. With multiple means of collecting revenue at relatively minimal costs, it\u2019s no wonder McDonald\u2019s relies so heavily on franchises.\u00a0In case you were curious, here are 17 things McDonald's employees won't tell you<\/a>.\r\n\r\n\u201cWe are not basically in the food business,\u201d former McDonald\u2019s CFO Harry J. Sonneborn reportedly told investors<\/a>. \u201cWe are in the real estate business. The only reason we sell 15 cent hamburgers is because they are the greatest producer of revenue from which our tenants can pay us rent.\u201d\r\n\r\nBeing able to hand off the costs of running the restaurants is a primary key to McDonald\u2019s success. According to Wall Street Survivor<\/a>, in 2014, the company made $27.4 billion in revenue, with $9.2 billion coming from franchised locations and $18.2 from company-owned locations. But after you factor in the total costs of running those locations, McDonald\u2019s kept only 16 percent of the revenue from locations it owned directly\u00a0compared to the 82 percent of the franchise-generated revenue.\r\n\r\nSo while you may spend money at McDonald's on a Big Mac and fries, McDonald's is spending money on prime real estate\u2014and they're lovin' it. Check out the state with the largest number of McDonald's locations.\r\n\r\n[embed_section]\r\n

More for McDonald's Lovers<\/h4>\r\n[embed-content tmbi_embed_carousel_content_id=\"832778\" imageid=\"1426451\" title=\"The 7 Healthiest Things You Can Eat at McDonald's\" linkurl=\"https:\/\/www.tasteofhome.com\/article\/healthiest-things-you-can-eat-at-mcdonalds\/\" \/]\r\n\r\n[embed-content tmbi_embed_carousel_content_id=\"750821\" imageid=\"1438323\" title=\"This Is the Secret Ingredient Behind the Addictive Flavor of McDonald\u2019s Fries\" linkurl=\"https:\/\/www.tasteofhome.com\/article\/secret-ingredient-mcdonalds-fries\/\" \/]\r\n\r\n[embed-content tmbi_embed_carousel_content_id=\"784926\" imageid=\"785398\" title=\"17 Things McDonald\u2019s Employees Won\u2019t Tell You\" linkurl=\"https:\/\/www.tasteofhome.com\/collection\/secrets-mcdonalds-employees-wont-tell-you\/\" \/]\r\n\r\n[\/embed_section]","protected":false},"excerpt":{"rendered":"

This fast-food giant may serve billions and billions of customers, but the bulk of their profit isn\u2019t made from food sales.<\/p>\n","protected":false},"author":6170,"featured_media":1089858,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"tags":[303719,303738],"categories-v2":[308324,308366],"coauthors":[199674],"acf":{"ncv_override_generic_settings_option":false,"ncv_autoplay_option":"","ncv_stickyplay_option":"","ncv_ads_option":"","ncv_mute_option":"","ncv_comscore_option":"","ncv_moat_option":"","ncv_autoplay_mobile_option":"","ncv_viewable_threshold_option":"","ncv_sticky_offset_option":"","ncv_autopause_option":"","ncv_sticky_offset_mobile_option":"","ncv_autopause_mobile_option":"","ncv_sticky_mobile_option":"","ncv_remove_player_option":false,"long_pin_file":false},"yoast_head":"\nThe Real Way McDonald\u2019s Makes Their Money\u2014It\u2019s Not Their Food | Taste Recipes<\/title>\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\n\n\n\n\t\n\t\n\t\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The Real Way McDonald\u2019s Makes Their Money\u2014It\u2019s Not Their Food | Taste Recipes","description":"Surprisingly, burgers aren't the key to the fast-food giant's success. 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