Profitability

The costs for starting the new McDonald's restaurant is between RM2.0 million to RM4.5 million and is usually depend on the size and location of the restaurant. Besides that, the initial cost incur are included the franchise fee of USD 22,500 paid upon or prior to the beginning of the franchise.

Furthermore, the start-up costs of the franchise also included the costs of decoration, kitchen equipment, signage, furniture and redesigning at the minimum of RM1.7 million and maximum of RM2.5 million are paid to the suppliers. Besides that, the start-up costs of the franchise also included the interest-free of RM50, 000 deposits for the faithful performance of the franchise and it would be refundable when the date of the franchise is expired.

Moreover, the McDonald would incur RM200, 000 - RM250, 000 for pre-opening expenses. Inside this costs it provide the training for their staff and it also incur the living expenses when the staff training. After that, the other miscellaneous costs are stamp duty, it is the costs that are necessary paid by the franchisee to the working capital.

The royalty fee is one of the ongoing fees and is based on a percentage of the company gross sales, normally the McDonald royalty fee is 5 % on their gross sales. Based on franchise agreement, when you want to start your business you must refer to the franchise agreement. In the franchise agreement there were such rule before the franchisor start the business and the franchisor must signing in the agreement first and the term of  the franchise are 10 years. After, the franchise agreement are expired the franchise are not allowed to sell your franchise to a third party unless they get the consent of the franchisor.

The company’s current financial status are good because the company sales and profit are planned early before they start their business and they are expecting a positive growth trend to be continue.