Ask McDonald’s what a franchise earns and it will show you a page of encouraging numbers: typical restaurant cash flow of £120,000–£400,000 a year, a 20–25% annual return. Ask Companies House and you get a different answer, because franchisees file real accounts.
We assembled the largest public census of the McDonald’s UK franchise system we know of: 113 limited-company operator groups (plus at least one sole trader, who files nothing), of which 73 file usable accounts. Together those 73 operators turned over £4.01 billion and employed 92,871 people. Their combined operating profit was £45.4 million — a 1.13% margin. Twenty-three of them, nearly a third, lost money at the operating level.
And above them sits the quiet half of the system. McDonald’s Real Estate LLP holds the property. Its accounts for 2024 show £117.6 million of turnover — described in its own notes as recharges to McDonald’s Restaurants Limited for the use of its properties — converted into £94.9 million of operating profit, an 81% margin, rising to £177.8 million of total profit once property gains land. The partnership has no employees. Its operating profit alone is more than double what all 73 franchise operators combined managed. One rung further up, its corporate partner, McDonald’s Real Estate Company No. 1, booked a £195.2 million share of the partnership’s profits against £7,000 of administrative costs, and paid £99.7 million of it up as dividends.
Why the margin is so thin: the fee stack is published
This is not a mystery, and it is not an allegation — McDonald’s now publishes the numbers itself. For restaurants franchised in 2025, 80% paid rent of 8%–18% of net sales. On top sit a 5% royalty and a 4.3% marketing contribution. Before a franchisee buys a single bun or pays a single member of staff, 17.3%–27.3% of sales has left the building.
| Charge | Published rate | Illustrative amount on the £4.01bn we observed |
|---|---|---|
| Rent | 8%–18% of net sales | £321M–£722M |
| Royalty | 5% | £201M |
| Marketing | 4.3% | £173M |
| Visible stack | 17.3%–27.3% | £694M–£1.10bn |
That illustration is not a fee estimate — the published rent band describes newly franchised restaurants, and accounts turnover is not identical to contractual net sales — but it explains the shape of every filing we read. The operator puts roughly £0.9M–£1.5M into a McDonald’s-controlled site (often 75% debt-funded), then earns whatever is left after a fee stack that scales with sales, not with profit.
It also explains how both of McDonald’s headline claims can be true at once. £120k–£400k of “annual cash flow” per restaurant is measured before owner drawings, loan repayments and tax. The filed accounts measure what is left as operating profit in the company. The gap between those two numbers is the point of this report.
FY2024: one wage rise ate half the profit pool
The 1.13% margin is not the steady state of McDonald’s franchising — it is what one year did to it. Among the 72 groups that filed comparable accounts for both years, sales grew 3.0% in FY2024. Staff costs grew 8.0%. Operating profit halved.
The arithmetic is unusually clean. Had wage bills grown in line with sales, the 72 groups would have paid about £32M more in staff costs; they actually paid £86M more. That £53M overshoot — the April 2024 National Living Wage rise plus the pay-scale compression above it — almost exactly matches the £47M of operating profit that vanished. This was a system-wide repricing of labour, paid for out of the operators’ penny.
The balance sheets recorded it too: across the six years of filings we examined, no sampled franchisee reported negative shareholders’ funds in any year from 2019 to 2023. In FY2024, for the first time, three did.
An 8% operator exists — which makes the 1% average more interesting
JRA Family Restaurants — ten restaurants in Yorkshire, 1,126 staff — made £3.8M of operating profit on £47.1M of sales, an 8.1% margin, roughly seven times the system average, with no one-off gains and a margin that improved through the wage shock. It is the best-performing operator group in our sample; whether it contains Britain’s most profitable individual McDonald’s, no public document can say.
At the other end, CGN Restaurants lost £1.4M on £51M of sales in FY2024, and its FY2025 accounts show it borrowing externally to clear £2.9M of aged balances owed to McDonald’s, finishing the year with negative shareholders’ funds. Ex Animo Foods, after its FY2024 loss, disclosed that McDonald’s granted it adjusted rent terms and relief from July 2025 — the franchisor’s own filings-level acknowledgement of what the economics had become.
Scale, notably, buys nothing: the biggest operator in the sample, London’s Capital Arches Group (£182M of sales, 3,643 staff), ran at 1.2%.
There is also now a public price for the asset itself. Six disclosed transactions in the filings cover 18 restaurants changing hands for £20.9M — about £1.16M per restaurant, squarely inside McDonald’s published £0.9M–£1.5M range. Restaurants trade only through McDonald’s approval process; franchisees sell to buyers the franchisor accepts.
The first FY2025 accounts suggest the trough is behind them
Most operators’ December 2025 accounts are not due until the end of September 2026. But the earliest filers hint at a recovery — through gross-margin repair and labour discipline, not relief on the fee stack. The Lee Collective (four restaurants) went from a 0.7% margin to 2.7%, growing sales 4.9% while cutting headcount from 470 to 457. S&VE Williams went from 0.2% to 1.8% with a wage bill held flat — even as its employer social-security cost jumped 47% under the April 2025 NIC rise.
Two early filers cannot prove a system trend — we will re-run this analysis when the September wave of accounts lands.
The comparison McDonald’s would rather you not draw
The same public accounts exist for other franchise systems. Where we could isolate clean, pure-play franchise operating companies, the gap is stark:
Three Domino’s franchise groups with clean accounts kept 6.98p per pound; eleven KFC owner-groups kept 5.01p; the 73 McDonald’s operators kept 1.13p. Every sampled Domino’s group was profitable through the same wage shock that pushed a third of McDonald’s operators into loss — and Domino’s itself reports its average UK franchised store made £162k of EBITDA in 2025.
The difference is not simply “who owns the building.” Domino’s also sits in the property chain — but it says that for the majority of its sites the landlord’s terms are mirrored back-to-back to the franchisee. McDonald’s charges rent of 8%–18% of net sales. One structure passes the property cost through; the other turns it into the most profitable part of the system — the 81%-margin property partnership at the top of our first chart.
What this does and does not show
Everything here is from filed statutory accounts and McDonald’s own published material. Some care with the edges: our census is a lower bound (McDonald’s permits sole-trader franchisees, who file no accounts at all); group accounts cannot reveal any single restaurant’s profit; operating margin is not owner income — most of these companies are their owners’ livelihoods, paying salaries and dividends the accounts only partly disclose; and the non-McDonald’s samples are small. The one-sentence version survives every caveat: in Britain’s biggest fast-food system, the people who run the restaurants keep a penny in the pound — and the property partnership above them keeps eighty.
Watch the short version: the 90-second reel on the LLP’s company page. Figures are from the companies’ filed accounts at Companies House, McDonald’s published UK franchising material, and Domino’s Pizza Group’s 2025 annual report. Franchisee figures are operator-group totals; individual restaurant profitability is not public.