How has franchised restaurants impacted McDonald's revenue?

**Franchised restaurants have significantly impacted McDonald's revenue in several ways:** 1. **Revenue Stream**: Franchised restaurants contribute a substantial portion of McDonald's revenue through franchise royalty fees and lease payments. In Q3 2024, franchised restaurant revenues amounted to $4,094 million. This stream of income is derived from the franchisor's rights to use the brand, products, and services, which includes a percentage of sales as royalties and sometimes rent for leased properties. 2. **Scalability and Growth**: The franchising model enables rapid expansion with minimal initial investment from the franchisor. This has allowed McDonald's to expand its global footprint, operating in over 100 countries with more than 36,000 restaurants. The ability to generate revenue from new locations contributes to the overall revenue base. 3. **Predictable Revenue**: The revenue stream from franchised restaurants is more stable and predictable compared to company-operated restaurants. This is because franchisees pay rent and royalties based on a percentage of sales, which provides a consistent cash flow to McDonald's. 4. **Indirect Revenue**: Franchisees also contribute to McDonald's revenue indirectly through the sale of company-approved products and supplies. 5. **Real Estate Component**: McDonald's owns most of its restaurant properties and leases them to franchisees, generating additional revenue through real estate holdings. This rental model ensures the company benefits from real estate investments and adapts the space to brand standards. In summary, franchised restaurants have a substantial and positive impact on McDonald's revenue, contributing through various streams such as franchise fees, lease payments, and indirect revenue from product sales, while also enabling the company's global expansion and providing a stable revenue base.