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The McDonald’s fast food restaurant chain closed 2023 with a net profit of 7,880.1 million euros, which is equivalent to an increase of 37.1% over the previous year, as announced in a statement. Meanwhile, the multinational’s revenues reached 23,721.6 million euros, a 10% increase.
Broken down by origin, income from own restaurants totaled 9,064.4 million euros, while income from commissions charged to franchises amounted to 14,363.5 million euros, up 11.4% and 9.4%, respectively. To these amounts should be added 293.7 million euros for miscellaneous income.
On the other hand, the costs incurred by company-owned and franchised restaurants amounted to 7,652.4 million euros and 2,302.6 million euros. These figures were 11.4% and 5.3% higher than those recorded twelve months earlier.
Increase in commissions to franchisees
At the end of October 2023, it was reported that McDonald’s planned to increase the fee it charges to some of the franchises operating in the United States and Canada from the current 4% to 5% of sales. Thus, those entrepreneurs who open new restaurants or buy those previously owned by McDonald’s will have to transfer 5% of the revenues generated to the parent company. The revised rate will also apply to restaurants that the company acquires and then sells to a franchisee.
However, it is anticipated that franchisees will continue to be subject to the 4% if their businesses change ownership and both the bidder and the buyer are associated with McDonald’s. Similarly, franchisees who sign 20-year contracts or those whose businesses are transferred from parent to child will also not be affected.
The food company will also standardize the name of this fee, which will be renamed ‘royalty’ in all markets where McDonald’s is present as opposed to the existing ‘service fee’, for example, in the United States.