In India, because of changing lifestyles and the growth of home delivery systems, the quick-serve restaurants market is growing very fast. And as per a recent survey it is expected to reach 828 billion by 2025.
So using this opportunity you can enter the QSR business by taking the franchise of the world’s largest restaurant chain like McDonald’s.
In this article, we will give a complete guide related to the McDonald’s franchise in India, which includes McDonald’s franchise cost, profit margin, licenses and documents required, space required, how to apply for the dealership, etc.
Why choose McDonald’s Franchise?
Founded in 1940, McDonald’s is an American multinational quick-service restaurant chain. It has a headquarters in California, USA.
The company introduced its first franchise outlet in 1953. Today it is the world’s largest restaurant chain by revenue. McDonald’s has 40,000+ outlets in 100+ countries.
McDonald’s serves a wide variety of burgers, cheeseburgers and french fries, soft drinks, milkshakes, wraps, and desserts.
McDonald’s entered India in 1996 with its first franchise outlet in Delhi. Today it has 500+ outlets all over India.
In India, investment firms Westlife developments and the MMG Group have the master franchise agreement with the McDonald’s brand. These master franchisees will provide the sub-franchise of the brand apart from running its own outlets.
Westlife developments are operating 300+ outlets in the South and Western regions of India and the MMG group is operating 200+ outlets in the North and East regions.
The menu in the Indian McDonald’s outlets includes Chicken Maharaja Mac, McSpicy Paneer, Cheesy Rice Bowls, McSpicy burgers/wraps, McGrill and Pizza McPuff, Mc Aloo Tikki, Mc Veggie etc.
Licenses and Registrations required
These are the licenses and documents required to start a McDonald’s franchise in India.
- Business Registration – sole proprietorship/LLP/Private Limited
- FSSAI Licence
- Trade Licence – from the local municipality
- Shop and Establishment Registration
- GST Registration
- NOC from the local fire department
- Eat House License – from the city police commissioner
- Certificate Of Environmental Clearance from MOEF
- Signage license from Municipality
If you lack capital, then you can approach banks like SIDBI for a business loan.
Space required to start the franchise
To start a McDonald’s outlet in India, you need a commercial space of around 1,000 to 2,000 square feet. Make sure that the outlet is in a prominent location that matches the McDonald’s guidelines.
If you do not own a commercial place, you can lease the outlet. Note that, all leases are corporately held and you will receive a sublease.
The exact space for the outlet depends upon the type of outlet category you choose.
For the location, McDonald’s has 3 categories,
i). Satellite Locations like metro stations, airports, sports clubs etc.
ii). Traditional restaurants in locations like shopping mall food courts, corporate areas etc.
iii). Small Town Oil & Retail outlets in locations like petrol bunks, small towns etc.
iv). Business Facilities Lease grant franchises with leases for corporate buildings.
McDonald’s franchise Cost
The minimum investment required to start a McDonald’s franchise in India is around 6 crores with a commercial space that matches McDonald’s guidelines. The exact amount will vary as per the type of McDonald’s outlet you choose.
This amount includes the McDonald’s franchise fee, outlet interior works, Decoration, landscaping, training charges, machines & equipment, signage boards,, licences, working capital, opening inventory, cash and inventory control system, business insurance etc.
The majority of the McDonald’s outlets in India are run by the McDonald’s master franchises Westlife developments and the MMG Group. The master franchise will provide the sub-franchise of the brand.
Since most of the outlets are run by the master franchises, the chances of getting a sub-franchise are very rare.
The eligibility for the sub-franchise will be decided by your current liquid assets, total net worth, your desired location, your experience in the QSR business etc.
The monthly expenses include employee salary, raw materials, utility bills, etc.
Profit margin in McDonald’s franchise
McDonald’s charges a royalty fee of 4% on the gross sales. So deducting all the expenses and the royalty, you can expect a profit margin of up to 8% on your annual sales.
How to get a McDonald’s franchise?
In India, Westlife developments and the MMG Group have the Master franchise agreement with the McDonald’s brand. So to open a new McDonald’s franchise, these two firms will provide the sub-franchise of the brand.
For the new franchise, you can also contact McDonald’s by filling out their franchise application form available on their official website.
After filling out the form, if approved, the team will contact you for further steps. The selection steps include a Phone Interview, Background check, Panel interview & Financial/Asset verification.
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FAQ about Dealership
How much investment is required for the McDonald’s franchise?
You need a minimum investment of around 6 crores with a commercial space.
How much shop space is required for the McDonald’s franchise?
The space required is around 1,000 to 2,000 square feet.
Profit margin in McDonald’s franchise?
You can expect a profit margin of up to 8% on the annual sales.
How to contact McDonald’s for the franchise?
You can contact McDonald’s for a franchise by filling out the form given in the article.
I hope this article has resolved many of your doubts related to the McDonald’s franchise. If you have any suggestions feel free to mention them in the comment box below.