McDonald’s Corporation

McDonald’s Corporation

Richard and Maurice McDonald founded the first McDonald's restaurant in San Bernardino, California, in 1940. Ray Kroc, a milkshake machine salesman, joined as a franchise agent in 1954 and bought the chain in 1961, expanding it globally through a franchising model that remains the core of its structure. McDonald’s generates revenue through three segments: company-operated restaurants, franchised locations (rent, royalties, and initial fees), and developmental licenses. As of 2024, approximately 95% of its 38,000+ restaurants were franchised, with company-owned stores concentrated in markets like the US and Japan. The company’s asset base is dominated by real estate — it owns the land and building for roughly 60% of franchised units, making it one of the largest property owners globally. Confirmed geographic footprint includes North America, Europe, Asia (notably Japan and China), and Latin America. In 2024, same-store sales declined 0.2% globally, weighed by weakening demand in markets like the Middle East and France. McDonald’s had 150,000 employees in 2024, though total workforce including franchisees is much larger. The company operates an extensive corporate support infrastructure outside its Oak Brook, Illinois, headquarters, including regional offices worldwide. In May 2024, the company expanded its digital loyalty program, MyMcDonald’s Rewards, to include delivery orders, aiming to boost transaction frequency among its roughly 60M active members. The structural differentiator is McDonald’s real-estate-heavy franchising model. Unlike most restaurant chains that treat real estate as a cost center, McDonald’s owns a majority of its franchisees’ land and buildings, generating stable rental income that provides a buffer against sales volatility. This hybrid landlord-operator structure allows it to capture both upside from franchisee performance and downside protection through long-term leases.