McDonald’s Success Story: Global Expansion, Franchise Opportunities & Costs in India

Overview of McDonald’s: The Global Fast-Food Powerhouse

McDonald’s is a global fast-food giant that has become one of the most recognizable and successful brands over the years in the whole world. It has always been on the top because of their unique concept of providing fast-food t customers in a very short time.

According to the movie “The Founder”, we have all seen how McDonald’s were doing something very unique and different than others for serving food in no time. The journey of McDonald’s from a very small burger stand to a global powerhouse is a testament to its innovative business strategies and customer-centric approach.

This has helped the fast-food giant to gain a market cap of whopping $185.81 billion as of June 2024. With this achievement, it made McDonald’s the world’s 68th most valuable company by market cap. Another factor, how McDonald’s expanded rapidly in the world market is because of their franchise business opportunity.

Various documentaries about McDonald’s expansion has showed, how the owners were keep to expand their business globally. So, there is no better time to invest in such business and open one for yourself and start making huge profit margin annually. Irrespective of your location or country, you will be earning a good sum of money from McDonald’s franchise.

Is McDonald's Franchise Profitable?

Again the profit margin of McDonald's franchise will vary as per the place, location, and demand. However, opening a McDonald's business franchise is a profitable business in India.

The average profit margin ranges from 20-25% in India. This means every Rs 1 lakh of revenue generation then as a franchise owner you can have a profit of Rs 20-25k. Make sure you do your research before planning to open such a reputable business franchise.

The Rise of McDonald’s: From Small Burger Stand to Global Empire

It was in the mid-20th Century when two brothers, Dick and Mac McDonald, ventured into the restaurant business in California. The brothers initially opened a drive-in restaurant called “McDonald’s Bar-B-Q” in San Bernardino, California in 1940.

After streamlining their operations and introducing a limited menu featuring 15-cent hamburgers in 1948, they began franchising their concept. Other than this, the Speedee Service System introduced by the brothers was a revolutionary concept.

This system transformed the way restaurants operated by simply implementing new kitchen processes that streamlined crew responsibilities, making it easier to serve customers effectively. This service system was based on principles of speed, lower prices, and volume.

The pivotal moment for McDonald’s came when Ray Croc, a multimixer salesman, visited their restaurant back in 1954 and he saw the potential for nationwide franchising. Soon, Kroc became their franchise agent and opened the first McDonald’s east of the Mississippi River in Des Plaines, Illinois on April 15, 1955.

Kroc was the one who played a significant role in transforming McDonald’s into a global brand. He acquired the rights to the McDonald’s brothers’ company back in 1961 and expanded the brand internationally.

Ray Kroc’s initial vision aimed at having 1,000 McDonald’s restaurants solely in the United States of America but, he eventually led to over 36,000 restaurants across more than 100 countries today. Over the years, while McDonald’s was busy expanding they introduced iconic menu items to customers.

Some of the biggest examples are Filet-O-Fish Sandwich, Big Mac, Quarter Pounder with Cheese, and Egg McMuffin. Other than this, the company also successfully established Hamburger University for training its employees and opened the very first Ronald McDonald House to support families with sick children.

The Expansion Strategy: How McDonald’s Became a Global Franchise Phenomenon

The first store was in Bernardino, California, it marked the humble beginnings of what would become a global giant. After Ray Kroc became a franchise agent at McDonald’s, he opened the first McDonald’s location in Des Plaines, Illinois.

In a very short span, McDonald’s expanded rapidly, Kroc bought McDonald brothers for $2.7 million and setting the stage for its global dominance. By 1960s, McDonald’s had already established a strong presence in various states across America.

The very first international McDonald’s outlet was opened in Canada in 1967, signalling the first beginning of global expansion. By 1970s, McDonald’s continued to open new outlets throughout the country and expanded into new markets globally, Interestingly, this was the era when the drive-thru services by McDonald’s in different locations were further advanced and enhanced.

In 1980s, McDonald’s introduced lots of new food items to their menu and by 1990s, they embraced new technology by introducing drive-thru order-taking kiosks at select locations to make the service better.

Additionally, in the late 90s, McDonald’s finally made their entry into the Indian market. As of today, McDonald’s boasts over 38,000 locations across more than 100 countries, employing around 200,000 people worldwide.

Interestingly, the iconic Golden Arches design was introduced with the ‘Red and White” building style that actually featured attention-catching architecture designed by Stanley Meson. Unfortunately, this design on their outlets were later replaced by the Mansard Roof design in the late 1960s.

McDonald’s in India: Adapting to Local Tastes and Preferences

McDonald’s entered into the Indian market in 1996, making a significant milestone in its international expansion strategy list. The move to India from McDonald’s was strategic, considering the country’s vast consumer base and growing economy.

McDonald’s was adapting its menu to suit local preferences and cultural norms. This included introducing vegetarian options and removing beef and pork from their menu so that they could cater to the predominantly vegetarian population in India. According to some reports, McDonald’s has now opened up more than 350 outlets in India and their outlets are located in 56 cities in our country.

Mcdonalds Franchise options : Various Franchise options with Macdonalds in India

Mcdonalds Traditional Franchises option

In this franchises, You can open storefront, food court like the business. For such business, MacDonald's provides 20 years of the franchise.

Mcdonalds Settelight Frenchies business model

In this Franchise model, You can start your restaurant business in a mall, college, railways station. The meaning of this business means you should have space nearby location.

Mcdonalds's STO and Start Location

In this model, you can start your business in small cities, nearby petrol pup and related stuff. In this case, you get at least 20 years of franchises.

Mcdonalds BLF Franchises

In this model, you can either open your franchise in corporate offices or even you can convert your existing restaurant into MacDonald's franchise business.

Space Requirement for McDonald's Franchise in India

One of the major drawbacks of opening a franchise could be related to the space requirement. Almost every business franchise around the world asks for a great place and store area. People willing to become a part of a reputable business franchise need to fulfill the area terms and conditions or else they might get the final approval.

Similarly, McDonald's expects its franchisee to rent or have a good area. This helps the parent company to load, unload, pack, park, and brand their company. Make sure you open a McDonald's franchise at a great location. The best place to open a McDonald's franchise is in malls, hospitals, colleges, and schools.

As per McDonald's requirements, you need to have at least 1500-4000 square feet of land. Yes, this is a huge area requirement but, it will help you conduct the dairy business operation very smoothly. So, while opening a McDonald's franchise make sure you have at least the asked space.

Reason to Choose McDonald’s Franchise In India

Here are some of the reasons to choose McDonald’s franchise in India:-

• One of the highest reputed fast-food brands in the whole world.
•  Has a successful and a proven business model that has refined over the years. Franchises will benefit from its extensive experience over the years.
• McDonald’s adapts its menu options to cater to different locals in our country to attract more customers.
• Franchisees in India will surely benefit from the company’s national and global marketing campaigns. As they invest heavily in advertising, which can help drive foot traffic to your franchise location and increase brand visibility.
• Training offered by McDonald’s are just amazing and are from the industry leaders.
• McDonald’s has an excellent and robust supply chain system that ensures consistent quality and timely delivery of ingredients. Franchise owners can leverage McDonald’s supply chain network, reducing operational complexities.

McDonald’s Franchise Cost and ROI in India: What You Need to Know

The total cost of McDonald’s franchise could depend on the area, demand, and location. But, the average cost required to make is between Rs 6-10 crores in India. This cost will include franchise cost, infrastructure setup cost, staff hiring cost, development cost, manager cost, interior cost, advertising cost, and many more.

The franchise cost of McDonald's can also be tricky just like its total investment. This is because the land, labor, and machinery cost will vary on the state you are opening the franchise. We surely cannot give you a perfect franchise cost but, the average franchise cost has been revealed by many franchise owners.

The average franchise cost of opening a McDonald's franchise across the country is between Rs 25-30 lakhs. Other than the franchise fee you need to pay other charges as well while and after opening a McDonald's franchise.

Here is a simple breakdown of the costs that are necessary to make for McDonald’s franchise in India:-

Parameters	Average cost
Franchise cost	Rs 25-30 lakhs
Civil work cost	Rs 10 lakhs
Furniture cost	Rs 11 lakhs
Electricity, water supply, training and support	Rs 20-30 lakhs
Interior cost	Rs 20 lakhs
Advertising cost	3% of total sales
Return on Investment	2-3 years
Machinery cost	Rs 20-30 lakhs