Jakarta –
McDonald’s plans to increase royalties for franchisees opening new restaurants in the United States and Canada. This is the first increase in the last 30 years
According to CNBC International, this fast food restaurant is increasing its prices by 4% to 5% starting January 1, 2024. This change only applies to those who open a franchise for the first time or purchase a restaurant under certain scenarios. In the meantime, for those who extend the lease and sell the franchise to another operator, the fees will remain the same.
McDonald’s will also stop using the term service fee and move to the word royalty.
“We’re not changing the service system, but we’re trying to change the mindset by making sure people see and understand the power of the McDonald’s brand when they buy it,” said McDonald’s U.S. President Joe Erlinger, quoted by CNBC, Sunday (24/9). /2023).
Franchising is an important part of McDonald’s business. The reason is that about 95% of the 13,400 restaurants in the United States are run by franchises. They pay rent, monthly fees, and the company’s mobile app fees.
This increase in fees may not have an immediate impact on many franchise owners. In recent years, McDonald’s and its franchisees have been involved in a number of issues, such as a new evaluation system and a California bill that would raise wages for fast food workers by 25% next year .
Despite this, McDonald’s business continues to grow rapidly. In the fourth quarter, restaurant sales increased 10.3%. Several factors drive sales. Starting with promotions like the Grimrace Birthday Meal and strong demand for McDonald’s main menu items like Big Mac and McNuggets. As a result, the average cash flow of U.S. carriers has increased by 35% over the past five years.
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