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The burger giant is raising the fees that franchise owners pay for the brand to 5% from 4%, starting Jan. 1, for any new restaurants they open.
This “will help us maintain our competitive edge – so we can continue offering opportunity to independent small business owners and their families for generations to come,” according to the letter.
The change will not affect existing franchisees who are maintaining their current footprint or who buy a franchised location from another operator. It will also not apply to rebuild existing locations or restaurants transferred between family members.
The fast-food giant operates more than 13,000 locations across the United States, with 95% of the restaurants run by franchisees as of Dec. 31, making up nearly 30% of its total revenue in 2022.
It will also change the term for payments in the U.S. from “service fees” to “royalty fees”, used by all other McDonald’s (NYSE:MCD) markets around the world.
Royalty is a fee paid by restaurant operators to the owner and the rate is set based on the revenue generated by the licensed property.
The company had said in July it expects revenue growth to moderate in the second half of the year as signs of easing inflation prompt it to temper menu prices, even as it reported better-than-expected quarterly profit.
