How did other business segments contribute to McDonald's income?
3/30/2025 03:19pm
**McDonald's income is diversified across various business segments**, with the most significant contributions coming from the following areas:
1. **Company-Owned and Operated Restaurants**: These are primarily located in the U.S. and include well-known brands like McDonald's, Egg McMuffin, and McDonald's Coffee. They generate income through sales of food and beverages directly to customers. While the U.S. segment is 95% franchised, the company still retains a significant portion of the revenue from these owned and operated locations.
2. **Franchised Restaurants**: This segment includes fees from franchised restaurants owned and operated by conventional franchisees, developmental licensees, and affiliates. The revenue from this segment is generated through franchise royalties, lease payments, and other fees. McDonald's operates 42,000 stores across over 100 countries, with approximately 81% of these being franchised.
3. **International Operated Markets**: This segment includes countries like Australia, Canada, France, Germany, and the U.K., which are 89% franchised. These markets contribute to income through franchise fees, lease payments, and sales from company-operated restaurants.
4. **International Developmental Licensed Markets & Corporate**: Covering over 75 countries, this segment is 99% franchised. Income is generated through franchise royalties and lease payments. The growth in this segment, particularly in countries like China, Italy, Poland, Russia, South Korea, Spain, Switzerland, and the Netherlands, contributes to the overall revenue and income.
5. **Loyalty Program Growth**: McDonald's loyalty program has seen a significant increase in active users, with a 15% year-over-year growth, reaching over 175 million users. This growth in customer engagement can lead to higher sales and revenue.
In summary, McDonald's income is bolstered by a combination of sales from company-owned restaurants, franchise fees, lease payments, and strategic initiatives like its loyalty program. The international nature of its business, with a strong presence in both operated and franchised markets, provides a diversified revenue stream.