stockrowWhat it does
McDonald’s franchises and operates restaurants serving food and drinks in communities across more than 100 countries. Its menu includes burgers, chicken sandwiches, Chicken McNuggets, fries, desserts, coffee and other beverages. Many restaurants also serve breakfast. The menu is broadly consistent, but varies by market to reflect local tastes, and restaurants offer some products for limited periods.
The company was founded on 1940-05-15 and is headquartered in Chicago. Christopher Kempczinski is its chairman, president and chief executive officer.
Most McDonald’s restaurants are run by independent franchisees rather than the company itself. At year-end 2025, approximately 95% of its 45,356 restaurants were franchised. Franchisees operate under agreements with McDonald’s, follow its brand standards and make their own employment, marketing and pricing decisions. The company also runs restaurants directly, using them to train personnel and develop operating practices, marketing concepts and product and pricing strategies.
Customers can order in restaurants, through drive-throughs, through the McDonald’s app or for delivery where available. The app offers ordering, personalized offers and a loyalty program. McDonald’s works with delivery providers and also allows app-based delivery ordering in some markets.
How it makes money
McDonald’s earns revenue from sales at restaurants it owns and operates and from fees paid by franchisees, developmental licensees and affiliates. It also receives payments from franchisees that recover part of the cost of technology and digital platforms, and revenue from licensing its brand for consumer packaged goods.
Under a conventional franchise, McDonald’s generally owns or holds a long-term lease on the restaurant’s land and building. The franchisee pays for equipment, signs, seating and décor. The company receives rent and royalties based on a percentage of sales, with minimum rent payments, as well as initial fees when a restaurant opens or a new franchise is granted. Franchise and license agreements generally have 20-year terms.
Developmental licensees and affiliates operate their own businesses, provide capital, including their real estate interest, and develop new restaurants. McDonald’s generally does not invest restaurant capital under these arrangements. It receives sales-based royalties and generally initial fees. In some affiliate arrangements, it also holds an equity investment and records its share of the affiliate’s net results.
Its reporting segments are the U.S., International Operated Markets, and International Developmental Licensed Markets & Corporate. Franchise restaurant sales are not recorded as McDonald’s revenue, but they are the basis for calculating franchise revenue. The company uses Systemwide sales, which include both franchised and company-operated restaurants, to track its restaurant business.
In 2025, consolidated revenue was $26.9 billion and Systemwide sales were $139.4 billion; in Q2 2026, McDonald’s said Systemwide sales grew 4% in constant currency and global comparable sales grew 1.3%.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| International Operated Markets | $13.6 billion | 50.7% | 7.96% |
| U.S. | $10.8 billion | 40.3% | 1.82% |
| International Developmental Licensed Markets & Corporate | $2.4 billion | 9.03% | −8.79% |
Customers and how it sells
McDonald’s serves restaurant customers across more than 100 countries, adapting parts of its menu to local preferences. Its customers can purchase meals and drinks through restaurants, drive-throughs and delivery, while digital tools let them order, pay, access offers and participate in loyalty programs.
At the end of 2025, McDonald’s had loyalty programs in 70 markets, including nearly all of its major markets. The company said it had nearly 220 million active loyalty users globally in Q2 2026. It offered delivery from nearly 41,000 restaurants across approximately 100 markets, representing approximately 90% of its restaurants. App-based delivery ordering was available in five of its top markets.
The U.S. and International Operated Markets are its significant reportable segments. International Developmental Licensed Markets & Corporate includes results from over 75 countries as well as corporate activities; China and Japan are among the markets where McDonald’s uses affiliate arrangements. In FY2025, International Operated Markets accounted for 50.7% of revenue and the U.S. accounted for 40.3%.
Franchisees and licensees are also business customers: they pay McDonald’s for the rights and support needed to operate under its brand. The company’s agreements specify fees and operating rights, while franchisees retain responsibility for their own restaurant operations.
| Segment | Revenue, FY2025 | Share | Change on the year |
|---|---|---|---|
| International Operated Markets | $13.6 billion | 50.7% | 7.96% |
| U.S. | $10.8 billion | 40.3% | 1.82% |
| International Developmental Licensed Markets & Corporate | $2.4 billion | 9.03% | −8.79% |
Suppliers and costs
McDonald’s and its franchisees buy food, packaging, equipment and other goods from numerous independent suppliers. The company sets food safety and quality standards, reviews products and visits suppliers. It also requires periodic third-party food safety audits and unannounced audits for suppliers of higher-risk foods.
The costs of a company-operated restaurant include food and paper, payroll and employee benefits, occupancy and other operating expenses. For franchised restaurants, McDonald’s measures restaurant margins after occupancy costs, including lease expense and depreciation. Conventional franchisees pay for restaurant equipment and furnishings and are responsible for reinvesting in their businesses over time; McDonald’s may co-invest in improvements.
Corporate support expenses include staff and spending on technology, legal, marketing, restaurant operations, supply chain and training. In 2025, company-operated restaurant margins reflected ongoing inflationary cost pressures in the U.S. and International Operated Markets. McDonald’s also said capital expenditures were $3.4 billion in 2025, mainly for new restaurants and, to a lesser extent, reinvestment in existing locations.
- Revenue$26.9B
- Cost of revenue−$11.5B
- Selling, general and administrative−$2.6B
- Other operating costs−$459.0M
- Operating income$12.4B
Competitive position
McDonald’s competes with international, national, regional and local food-service businesses. Its competitive set includes quick-service and fast-casual restaurants, delivery and takeaway providers, convenience stores, cafés, coffee shops, kiosks and other food outlets. It competes primarily on price, convenience, service, experience, menu variety and product quality.
It was reported on 26 October 2026 that McDonald’s and Burger King had highlighted the protein content of their menu items. McDonald’s considers its name and Golden Arches logo materially important to its business, and its marketing promotes the brand across markets. Its restaurant network includes drive-through and delivery locations, while franchisees operate under common brand standards.
Our reading: the brand is a meaningful competitive asset because customers encounter the same name and recognizable products across markets, although competitors can also compete on value and convenience.
Our reading: the restaurant and drive-through network is another meaningful advantage, giving McDonald’s physical access to customers across many locations; operating that network still depends on consistent execution by independent franchisees.
Our reading: digital ordering and loyalty can support repeat visits and customer engagement, but the Q2 2026 U.S. experience shows that changes to offers and restaurant execution can also disrupt customer traffic.
| Competitor | Where they compete | Threat (our reading) |
|---|---|---|
| Burger King | Restaurant meals and menu offerings | Medium |
Growth opportunities
McDonald’s growth plans include marketing, its core menu, digital ordering, delivery, drive-throughs and restaurant development. The company also plans to build technology platforms for customers, restaurant operations and corporate services. Its app offers personalized promotions and loyalty rewards, and the company plans to increase loyalty engagement and sales.
McDonald’s aims to reach 250 million 90-day active loyalty users and $45.0 billion in annual Systemwide sales to loyalty members by the end of 2027. It also expects 30% of Systemwide delivery sales to originate from its app by the end of 2027. The company is developing restaurant software intended to help locations introduce changes with less complexity.
New restaurants are another part of the strategy. In Q2 2026, McDonald’s said it expected to reach 50,000 restaurants globally in 2028, rather than by the end of 2027. It attributed the slower pace to a pressured consumer environment and the cumulative effect of inflation on development costs. The company said it remained on track to open about 2,600 gross restaurants in 2026.
McDonald’s also introduced McDonald’s Next, a strategy focused on food taste and quality, customer engagement and simpler restaurant operations. It said early results from its beverage platform exceeded expectations in the U.S., Canada and Germany, and planned a training program for restaurant crew, company employees and supplier partners.
- $23.2BFY2021
- $23.2BFY2022
- $25.5BFY2023
- $25.9BFY2024
- $26.9BFY2025
Structural risks
- Consumer conditions and value: Unfavorable economic conditions can hurt results. In Q2 2026, McDonald’s described a challenging consumer environment and said inconsistent execution of its U.S. affordable-price menu and lower-than-target awareness reduced the program’s incremental effect.
- Restaurant execution: McDonald’s said U.S. restaurant teams were overwhelmed by too many deployments in Q2 2026, making operations less efficient. Service times increased and customer satisfaction scores fell.
- Franchisee dependence: Franchisees run most restaurants and make their own pricing, marketing and employment decisions. McDonald’s said some U.S. franchisees did not follow its recommended pricing execution for the affordable-price menu.
- Costs and development: Inflation can pressure restaurant margins and make new locations more expensive. McDonald’s cited cumulative development-cost inflation when it moved its global restaurant target to 2028.
- Legal and regulatory complexity: The business operates across jurisdictions with differing rules on matters including franchising, employment, food safety and taxation. Litigation, settlements or judgments can also affect costs and perceptions of the brand.
- Debt: It was reported on 21 October 2026 that McDonald’s had $54.6 billion in debt at the end of fiscal Q2 2026.
Bottom line
Our reading
McDonald’s is primarily a franchisor whose revenue depends substantially on sales at independently operated restaurants, supported by a smaller company-operated business. Its brand, locations and digital channels give it several ways to reach customers, but franchisee execution and affordability remain important to restaurant traffic. The slower restaurant-development target and reported debt add capital and financial considerations to that operating exposure.