McDonald's Implements First Royalty Fee Increase in Nearly 30 Years for New Franchises

McDonald's is increasing its royalty fees for new franchised restaurants from 4% to 5%, starting January 1, 2022, marking the first hike in nearly 30 years. Existing franchisees maintaining their current footprint or buying from another operator will not be affected, nor will rebuilt existing locations or restaurants transferred between family members. The change will impact new franchisees, buyers of company-owned restaurants, relocated restaurants, and other scenarios involving the franchisor. McDonald's U.S. President Joe Erlinger stated that the move aims to redefine success and emphasize the value of the McDonald's brand. The company's relationship with its U.S. operators has been strained in recent years, but despite the turmoil, McDonald's U.S. business is thriving, with domestic same-store sales growing 10.3% in the most recent quarter.