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McDonald’s Royalty Fee Increases, Opening A McDonald’s Franchise Is About To Get Expensive

A McDonald's Franchise In Canada (Photo:theglobeandmail)

McDonald’s royalty fee increases for operators opening a McDonald’s franchise in the US and Canada. This is the first time in 30 years that McDonald’s has increased its royalty fee.

McDonald’s USA (Photo: SoundCloud)

McDonald’s Royalty Fee Increase in the US and Canada for Franchise Operators Opening New Restaurants

In one CNN News article, the company’s executives shared the news of McDonald’s royalty fee increase with employees and franchisees on Friday.

The change in McDonald’s royalty fee was said to help align the North American market with the international market.

McDonald’s royalty fee will increase to 5% from their usual 4% royalty fee in January 2024.

According to The Takeout, the said increase in McDonald’s royalty fee will not affect existing franchisees or franchise locations bought from another operator. Restaurants that are passed down by family members are also unaffected by the McDonald’s royalty fee increase.

The new McDonald’s royalty fee will only affect new operators opening a McDonald’s franchise in the US and Canada or those who purchased directly from the company.


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Changing the term “service fee” to “royalty fee” is a significant change, the company said.

McDonald’s Royalty Fee before was referred to as a “Service Fee.” The change in terms might be small and insignificant to others, but to the company, changing the name means more freedom to reduce the services it is obligated to provide to the franchisees.

McDonald’s US President Joe Erlinger said to CNBC that changing McDonald’s royalty fee does not mean they are changing their services; rather, they are trying to change the mindset by letting people understand the power of what they buy into when they buy the McDonald’s brand.


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