McDonald’s Real-Estate Strategy

McDonald’s may be best known for Big Macs and golden fries, but behind the counter lies a real estate empire that has been pivotal to its success. In fact, former McDonald’s CFO Harry J. Sonneborn famously quipped, “We are not technically in the food business. We are in the real estate business. The only reason we sell 15-cent hamburgers is because they are the greatest producer of revenue, from which our tenants can pay us rent.” This strategy – owning or controlling the land under its restaurants and leasing it to franchisees – has allowed McDonald’s to flip burgers while collecting rent, making the company as much a landlord as a fast-food chain. In this article, we’ll explore the origins of McDonald’s real-estate-based business model, how it generates income, the breakdown of properties owned vs. leased, and how this approach impacts the company’s finances and influences the broader industry. We’ll also look at recent data and developments up to mid-2025, including revenue breakdowns and global expansion trends, all in an engaging, plain-language deep dive.

Origins of a Real Estate Empire: Ray Kroc and the Franchise Realty Corporation

McDonald’s real-estate strategy dates back to the 1950s and the vision of Ray Kroc – the franchising agent-turned-founder of McDonald’s Corporation – and a financial consultant named Harry Sonneborn. In the mid-1950s, Ray Kroc was struggling to make money by franchising McDonald’s restaurants. He earned only a small royalty (about 1.4% of sales) from franchisees, had slim profits, and faced difficulties financing new expansion. Enter Sonneborn (a former Tastee-Freez executive), who quickly spotted a flaw in Kroc’s approach. Sonneborn realized that McDonald’s could become far more profitable by flipping the business model: rather than just collecting a meager royalty on burgers, McDonald’s should own the land and buildings and act as landlord to its franchisees.

In 1956, Sonneborn helped Kroc set up a new entity called the Franchise Realty Corporation (FRC) specifically to acquire and lease restaurant sites. This move is widely regarded as the turning point for McDonald’s. The insight was summed up in Sonneborn’s famous advice to Kroc: “You’re not in the hamburger business, you’re in the real estate business.” From that point on, McDonald’s corporate strategy shifted to buying or leasing the land for each new restaurant, building the outlet, and then renting it to the franchise operator.

This innovation had multiple benefits. First, it provided McDonald’s with a steady, upfront revenue stream (rent) that began even before a new restaurant sold its first burger. Instead of waiting for franchisees’ sales to trickle in royalties, McDonald’s could collect rent as soon as a franchise agreement was signed. Second, it gave McDonald’s much tighter control over franchisees and operations – if a franchisee did not maintain standards, the company had the ultimate leverage of terminating the lease. Third, owning valuable real estate created assets that could be used to finance further expansion (for example, land could serve as collateral for loans, or be leveraged to fund new locations in a “virtuous cycle” of growth). Kroc embraced this strategy, and the results were dramatic: by 1960, McDonald’s had 200 restaurants, and after Kroc bought out the McDonald brothers in 1961 (with Sonneborn becoming the first McDonald’s president), the company expanded to over 1,000 locations by 1970. In essence, McDonald’s evolved into a hybrid of fast-food chain and real estate enterprise, setting the foundation for the global empire it is today.

Burgers and Rent: How McDonald’s Makes Its Money

How exactly does McDonald’s use real estate to make money? The company operates under a franchising model with a real-estate twist. Under a conventional franchise arrangement, McDonald’s typically owns or secures a long-term lease on the land and building for the restaurant, while the franchisee invests in the equipment, furnishings, and day-to-day operations. The franchisee runs the restaurant and is the employer for that location, but they do so on property that McDonald’s controls. In return, the franchisee pays McDonald’s a combination of rent and royalties, as well as an initial franchise fee.

The rent and royalty fees are usually calculated as a percentage of the restaurant’s sales (for example, a percentage rent), with minimum rent payments stipulated, ensuring McDonald’s gets a baseline income even if sales are lower than expected. A typical McDonald’s franchise agreement runs for 20 years, and McDonald’s retains control of the real estate throughout – when a franchise term ends, McDonald’s can choose to renew with the same operator, find a new franchisee, or in some cases close or relocate the restaurant. Notably, franchisees also generally cover occupancy costs like property taxes, insurance, and maintenance, which means McDonald’s isn’t burdened with those expenses on franchised locations.

This model creates two income streams for McDonald’s corporate: sales revenue from the restaurants it operates directly, and franchise income from restaurants operated by others (the franchisees). The franchise income includes the rent payments (for use of the land/building) and royalty fees (for use of the McDonald’s brand and system), plus initial fees. In essence, every time you buy a Big Mac at a franchised McDonald’s, the franchise owner must pass a portion of that sale to McDonald’s in royalties and also pay rent for the very ground beneath your feet.

Why go to such lengths? Because collecting rent has proven to be a brilliant strategy for stability and profit. Rental income tends to be steady and predictable, since leases obligate franchisees to pay regardless of short-term fluctuations in burger sales. In fact, McDonald’s often structures franchise leases to have both fixed and variable components – a base rent plus a sales-based rent – which means McDonald’s gets paid something even in slow times, but also benefits when a location’s sales soar. This arrangement “helps insulate [McDonald’s] from the ups and downs of the business of flippin’ burgers,” as one analysis noted. Franchisees, for their part, get some relief during downturns because if sales drop, the percentage rent portion drops, giving them a bit of breathing room. In this way, McDonald’s and its franchisees share the risks and rewards of the business, aligning their incentives. McDonald’s describes its heavily franchised model as one designed to generate “stable and predictable revenue” largely driven by franchisee sales – essentially a built-in buffer against economic swings or consumer fads.

Another advantage is that by being the landlord, McDonald’s can maintain strong oversight of its brand. Standards for menu, service, and quality are enforced via franchise agreements, and if a franchisee fails to meet McDonald’s standards, McDonald’s has leverage beyond legal action – they can ultimately enforce compliance or terminate the lease, which is a far more immediate tool to maintain consistency. This ability to safeguard the brand’s reputation across thousands of outlets is a key reason McDonald’s sticks with the real estate-centric franchising approach. As Ray Kroc once put it, “The franchisees are the bedrock of our business model, but we own the land they walk on,” underscoring how control of property underpins control of the brand.

Owning vs. Leasing: Inside McDonald’s Property Portfolio

A critical piece of McDonald’s strategy is how many of its restaurant sites it owns outright versus how many it leases from others. McDonald’s doesn’t necessarily own every parcel of land under its restaurants – in some cases, it signs long-term leases with external landlords (such as mall owners or other property holders), then in turn sub-leases those locations to franchisees. Still, the company strives to own a substantial portion of its real estate. This ensures control over strategic locations and lets McDonald’s capture the value appreciation of those properties over time.

So what does McDonald’s real estate footprint look like? As of the end of 2024, McDonald’s had 43,477 restaurants worldwide, and about 95% of them are franchised (run by independent franchisees) while only about 5% are operated by the company itself. McDonald’s reports that in the markets it consolidates (primarily the U.S. and other major markets it operates), it owns roughly 56% of the land and about 80% of the buildings for its restaurants. The remaining locations are on land or in buildings that McDonald’s leases from third parties (often on long-term leases). In simpler terms, McDonald’s is the landlord (property owner) for well over half of its restaurants globally, and for the vast majority it is at least the master lessee controlling the site.

To put this into perspective, McDonald’s is sitting on a massive real estate empire. Estimates of the total value of its land and buildings hover around $40 billion or more (before depreciation). In fact, the value of McDonald’s owned real estate comprises roughly 60–80% of its total assets on the balance sheet. That’s an extraordinary figure – it means that a huge chunk of the company’s worth is tied to property, not just trademarks or burger recipes. Little wonder McDonald’s has been called “one of the most successful real estate companies in the world” in the guise of a fast-food chain.

McDonald’s Global Real Estate Footprint (2024): Owned vs. Leased

Table: Roughly over half of McDonald’s restaurants sit on land the company owns (with the rest on leased land), and McDonald’s owns the actual building structure about 80% of the time. The remainder of sites are occupied under long-term leases where McDonald’s is the tenant to an outside landlord, but McDonald’s still controls the site and then subleases it to the franchisee. This balance allows McDonald’s to control critical locations while not tying up capital in every single site.

McDonald’s strategically balances owning vs. leasing to manage capital and risk. Owning property requires more upfront investment, but it lets McDonald’s capture long-term real estate gains and avoids rent expenses to third parties. Leasing sites can be useful for flexibility – for instance, in ultra-expensive urban locations or foreign markets where ownership is complicated, McDonald’s might lease a store site instead of buying it. Even when McDonald’s doesn’t own the land, it typically secures very long-term leases (20 years and often with extension options). This was illustrated in an extreme case when McDonald’s first entered Russia: the company negotiated a symbolic rent of just 1 ruble per square meter for a flagship Moscow location with a 49-year lease! In general, controlling the site for the long haul – by ownership if possible, or by long lease if not – is the goal.

An interesting insight came during the 2008 financial crisis: McDonald’s real estate approach turned into an offensive weapon. As property markets crashed and land values became cheap, McDonald’s “leaned heavily” on its real estate facet by buying up more land and buildings at bargain prices. In other words, while others were retrenching, McDonald’s went property shopping, expanding its asset base. Because it had cash flow from rents and a strong balance sheet, McDonald’s could capitalize on the weak market. The takeaway is that being in the real estate business gave McDonald’s an opportunistic edge and greater resilience.

Moreover, owning real estate provides McDonald’s a form of diversification within its business. The company isn’t solely reliant on selling Big Macs; it also effectively operates a large leasing enterprise. This diversification can lower risk – when burger sales face headwinds, the rent still must be paid. Analysts have noted that McDonald’s “is both a fast food and real estate business,” and this mix helps buffer financial risks and smooth out earnings. Of course, there are flipsides: McDonald’s carries the costs of property ownership (or lease obligations to outside landlords). If a location underperforms severely, the franchisee might struggle to pay rent, or McDonald’s could be left with a vacant property to manage. Franchise agreements usually protect McDonald’s with minimum rent requirements and the ability to replace underperforming operators, but the company does bear some real estate market risk on the properties it holds. By and large, however, the strategy has been a net positive, creating a steady income flow that is less volatile than restaurant sales.

It’s worth noting that McDonald’s adapts its model in certain international markets. In some countries, instead of owning or leasing every site themselves, McDonald’s uses what it calls “developmental license” or affiliate partnerships. In those cases, local partners or licensees own the restaurants (including the real estate) and pay McDonald’s a royalty for the brand. For example, McDonald’s China and McDonald’s Japan are operated by partner companies in which McDonald’s has an interest but not full ownership; those partners invest their own capital to open stores and acquire real estate. This approach is essentially a more asset-light strategy for markets where McDonald’s chooses to cede the landlord role to local developers. Even so, the core idea remains – McDonald’s ensures it still benefits financially (via royalties) and strategically (growing the footprint without directly spending on each location) while the local operator often takes on the property ownership. In McDonald’s top markets (like the U.S. and most of Europe), the conventional model of McDonald’s as landlord still prevails, but it’s flexible globally depending on what makes sense in each region.

Show Me the Money: Revenue Breakdown and Real Estate Profits

The power of McDonald’s real estate strategy shows up clearly in its financial results. By splitting its business between company-operated restaurants and franchised restaurants, McDonald’s effectively has two revenue streams – and they have very different profit characteristics. Let’s look at some recent figures to see how this plays out in dollars and cents:

McDonald’s 2024 Revenue and Operating Income by Segment (Worldwide)

Table: McDonald’s 2024 revenues came mostly from franchised restaurants (the rent and royalty fees paid by franchisees) rather than from the sales of company-operated stores. More striking is the profit difference: franchise fees are extremely high-margin for McDonald’s (over 80% margin), whereas running restaurants directly is far less profitable (around 15% margin after expenses). In 2024, franchised operations produced the lion’s share of McDonald’s operating income.

As the table shows, in 2024 McDonald’s had $25.9 billion in total revenue. The majority of that – about $15.7B – came from franchised restaurants (the rent and royalty payments from franchisees). The remaining $9.8B came from the much smaller number of company-owned stores where McDonald’s records all the sales. However, when we look at profitability, the franchise side dominates: McDonald’s earned over $13 billion in gross operating profit from franchised locations, versus roughly $1.4 billion from the company-run side. In percentage terms, McDonald’s kept around 80¢ of every dollar of revenue from franchisees as operating profit, but only ~15¢ of every dollar from its own store sales after covering the costs of running those stores. This dramatic difference is because running restaurants is expensive (food ingredients, crew wages, utilities, etc.), while collecting rent and royalties is relatively costless by comparison. As McDonald’s management dryly notes, “It costs way more money to run your own store than it does to sit back and collect cash.” Indeed, McDonald’s retains a much larger portion of franchise-derived revenue than it does of restaurant sales – a fact that has held true for decades. For example, even in 2014, when McDonald’s still derived a larger share of revenue from company stores, about 82% of McDonald’s operating income came from franchisee rent and fees. In recent years, after aggressively franchising more stores, the imbalance is even greater.

Another way to look at it: McDonald’s could be seen as having two divisions – a real estate rental division (franchise segment) and a restaurant operating division (company segment). The rental division generates less than two-thirds of the revenue but provides the vast majority of the profit, whereas the restaurant operating division generates a lot of revenue but at much lower margin. This is quite deliberate – McDonald’s has intentionally shifted over time to a heavier franchised model to tap those higher margins. As of 2024, about 95% of McDonald’s restaurants are run by franchisees, up from about 85% in the mid-2000s. The company has refranchised thousands of stores (selling company-operated stores to franchisees) to achieve a more asset-light, higher-margin business. One side effect is that rental income now accounts for a large portion of McDonald’s total revenue – by some estimates, rent from franchisees alone makes up roughly 35–40% of McDonald’s total revenues. (In 2021, for instance, McDonald’s disclosed that of $13.1B in franchisee revenues, $8.4B was rent – about 64% of franchisee fees – which was about 35% of the total $23B revenue that year. By 2024, that rent share of total revenue is likely closer to 40% as the franchise proportion has grown.) In other words, a very large chunk of the money that McDonald’s corporate brings in each year is not from selling food to customers, but from charging rent to its franchise operators.

This model has made McDonald’s extraordinarily profitable. In 2024, despite inflation and some economic headwinds, McDonald’s still earned $8.2 billion in net income (profit) – a profit margin of about 32% of revenue, which is stellar for the restaurant industry. Its operating margin (operating income as a percent of revenue) was around 45–46%. For comparison, many purely operational restaurant chains have operating margins in the teens or single-digits. McDonald’s high-margin franchise fees are the reason it can achieve such results. The company openly touts the stability of its cash flow due to its heavily franchised, rent-driven model. In fact, McDonald’s leadership has resisted pressure from some investors to spin off its real estate into a separate investment trust, arguing that the synergy of real estate and franchising is fundamental to its business. In 2015, when activists urged creating a REIT (Real Estate Investment Trust) for its properties, McDonald’s CEO firmly declined, saying “a REIT was not in the best interest of shareholders” and that the potential gains didn’t outweigh the risks of such a move. One risk would be losing the tight integration between the restaurant operations and the control of the land. Simply put, McDonald’s believes its rent-and-burgers combination model works best as a package – and the consistent performance seems to vindicate that stance.

It’s also notable that McDonald’s uses a portion of its company-operated restaurants as innovation testbeds and training centers, which justifies keeping a small percentage of locations under direct operation. The company finds value in operating some stores itself to stay closely in touch with ground-level operations and to pilot new menu items or technologies before rolling them out systemwide. Those company stores, while less profitable, are almost like R&D centers that ultimately benefit the franchisees too.

Influence on the Industry: Comparisons and Imitations

McDonald’s real estate-centric franchising strategy has not gone unnoticed. It has influenced the entire fast-food industry’s thinking about franchising and asset ownership, though few have replicated it to the same extent. The phrase “McDonald’s isn’t a burger chain, it’s a real estate company” has become almost cliché – a testament to how distinctive (and successful) the model is.

Other major fast-food franchisors have taken a decidedly asset-light approach. For example, Yum! Brands, which franchises tens of thousands of KFC, Pizza Hut, and Taco Bell locations worldwide, typically does not own the land or buildings of its restaurants. Yum’s franchisees generally secure their own locations or rent from third parties, while Yum collects purely a royalty on sales. This means Yum can grow rapidly without heavy capital investment, but it forgoes the rental income and has less leverage over franchisees’ site decisions. Similarly, Restaurant Brands International (parent of Burger King, Popeyes, and Tim Hortons) and others have focused on franchise expansion with minimal corporate real estate ownership. These companies saw McDonald’s enormous fixed-asset base and decided to pursue a lighter model to boost return on capital. The result is they earn lower margins on each franchise (since they only get royalties, no rent), but can support a larger number of outlets with less balance-sheet weight. In contrast, McDonald’s approach is more capital-intensive but yields higher margins and asset appreciation. It’s a strategic trade-off.

There have been instances of restaurant companies emulating aspects of McDonald’s strategy. Some franchise-driven chains have done sale-and-leaseback deals or formed their own property companies to take on real estate. Chick-fil-A, for example, retains ownership of its restaurant properties and requires its operators (who are more like managers than franchise owners) to run the restaurant without actually owning the real estate or the business. This mirrors McDonald’s in that Chick-fil-A corporate heavily controls site selection, development, and can ensure consistency (though Chick-fil-A’s model is unique in other ways). Subway, on the other hand, went the opposite direction – it expanded rapidly with an extremely asset-light model (franchisees find their own store locations, often renting small spaces in strip malls or gas stations, and Subway corporate just collects royalties). That allowed Subway to grow units quickly, but the lack of corporate-owned real estate or even centralized site standards arguably contributed to a less consistent experience and store quality problems over time. The value of McDonald’s model is evident when comparing outcomes: McDonald’s generates far more profit per restaurant and has a much higher market capitalization than similarly-sized (or even larger) rivals in terms of store count, in part because owning prime locations has built-in value.

McDonald’s strategy even sparked debates on Wall Street about unlocking that value. In the mid-2010s, some investors and analysts urged McDonald’s to spin off its real estate into a separate REIT (Real Estate Investment Trust) – essentially separating the landlord business from the hamburger business. The idea was that the real estate alone was so valuable that it could be a $30+ billion standalone company, and shareholders might benefit from that clarity. For instance, one analysis in 2015 imagined a hypothetical “McREIT” that would own McDonald’s properties, with $9 billion in annual rent revenue and very high profits – which could potentially trade at a high valuation. Similar pressure was put on other companies (like Macy’s in retail) around that time to monetize real estate. However, McDonald’s resisted this move. The leadership argued that having the real estate and restaurant operations under one roof provided strategic advantages that a split would lose. As CEO Steve Easterbrook said in 2015, “We don’t believe it serves the best interests of shareholders to pursue a REIT… The potential upside is not compelling and the risks are too great.” The risks likely referred to losing control over store locations, creating a new landlord entity that might have different priorities, and tax or complexity issues. In the end, McDonald’s stayed whole, and its stock has performed well since, suggesting that investors have been content with the integrated model.

Another area of influence is how McDonald’s real estate strategy set expectations for franchise models in other industries. Franchisors in hospitality (hotels), convenience stores, and even some retail have looked to McDonald’s as an example of how owning prime locations can strengthen a franchise network. It’s not always feasible (many companies simply can’t afford to acquire lots of property), but McDonald’s demonstrated that being a stakeholder in the real estate can align interests between franchisor and franchisee and create a sturdier business. It’s a model of franchise partnership often referred to as the “three-legged stool” at McDonald’s – franchisees, suppliers, and the company itself all have skin in the game in different ways, with McDonald’s real estate ownership underpinning its leg of that stool.

One could argue the closest parallel to McDonald’s approach outside of fast food might be big-box retailers or coffee chains that buy their locations. For example, Starbucks generally leases its cafe locations rather than owning them, but companies like Walmart often own their store properties. However, Walmart doesn’t franchise its stores, so it’s a different dynamic. In franchising, McDonald’s stands out for the sheer scale of real estate it controls. This has made McDonald’s one of the largest commercial real estate owners in the world – a fact often surprising to those who think of it only as a place to grab a burger.

Recent Developments and Global Trends (2020s)

As of mid-2025, McDonald’s real estate strategy continues to evolve alongside its business. After a period in the 2010s of refranchising and focusing on improving existing stores, McDonald’s is now back into expansion mode – and that means deploying its real estate playbook on an even larger stage globally. In late 2023, McDonald’s announced an ambitious goal to reach 50,000 restaurants worldwide by 2027, up from about 40,000 in 2023. This would mark the fastest growth spurt in the company’s history. To achieve it, McDonald’s is leaning heavily on growth in international markets, particularly in Asia and other emerging economies.

One striking plan is the “breakneck expansion” in China – a market operated by a developmental licensee partner. McDonald’s and its partners aim to open roughly 1,000 new restaurants in China in 2025 alone, out of about 2,200 planned new McDonald’s globally that year. That means nearly half of all new Golden Arches will rise in Chinese cities in a single year. This is part of a drive to double McDonald’s China presence; indeed, McDonald’s hopes to have 10,000 restaurants in China by 2028 (up from around 5,000 in 2022). The strategy in China still follows the McDonald’s formula: focus on high-traffic locations and use McDonald’s marketing and menus, but the capital for expansion and real estate is largely coming from the local partner (who, for example, pays for new land or leases). McDonald’s collects royalties (and potentially a portion of rent or profit via its minority stake in the China venture), demonstrating a more asset-light twist in that market. This shows McDonald’s flexibility – in some regions, it’s willing to be slightly less involved in owning the dirt, as long as the brand can penetrate and the fees flow back.

Elsewhere, McDonald’s is also growing in markets like Indonesia, India, Eastern Europe, and Africa – often through master franchisees or developmental licensees. These partners sometimes emulate McDonald’s own approach by buying sites or securing prime leases. Internationally, real estate trends can differ: for instance, in densely populated cities, McDonald’s may open smaller-format restaurants or locate in train stations and airports (which usually involve leasing space rather than owning). In some countries, laws regarding foreign ownership of land require McDonald’s to partner with locals. Despite these variations, the consistent theme is that McDonald’s ensures each restaurant sits on a well-chosen piece of real estate that can uphold the brand and financial model. The company uses sophisticated analytics to choose sites, analyzing traffic patterns, demographics, and even the corner visibility of locations. A joke among real estate professionals is that if you’re looking for a good location to invest, see where the next McDonald’s is being built – they’ve done their homework.

In the U.S. and other developed markets, McDonald’s had slowed unit growth for years (closing some underperforming stores and refranchising others), but recently it has begun opening new restaurants again even in its home market. 2023 marked the first year in nearly a decade that McDonald’s added net new stores in the U.S.. The company’s current growth plan (dubbed “Accelerating the Arches 2.0”) explicitly adds a fourth “D” for Development to its pillars, meaning a renewed focus on new unit expansion alongside the classic priorities of menu, value, and digital. To support this, McDonald’s increased its capital expenditures by 18% in 2024, mainly directed at new restaurant investments. The vast majority of new openings are still franchised locations, but McDonald’s often invests in the development of those sites (acquiring land or constructing buildings) before handing them to franchisees. For example, in 2024 McDonald’s opened 2,116 new restaurants globally – a pace that will only accelerate in 2025. Each of those new restaurants typically involves McDonald’s real estate team locking down a site, whether through purchase or a master lease, in coordination with franchisees or licensees.

Financially, McDonald’s is coming out of the pandemic years in a position of strength, and it’s doubling down on what works. Despite inflationary pressures worldwide (which affect construction costs and franchisee operating costs), McDonald’s CFO has expressed confidence that the company can maintain strong profitability. The company is targeting an operating margin above 46% in 2025, slightly higher than the 46.3% (adjusted) it achieved in 2024. This implies that as McDonald’s grows, it expects the mix of franchise rent/royalty income to remain high and even increase relative to costs – essentially continuing the trend of leaning into the franchised real estate-heavy model.

Another recent development is how McDonald’s real estate strategy plays into restaurant modernization. In the late 2010s, McDonald’s undertook a major “Experience of the Future” remodeling campaign, updating stores with digital kiosks, new decor, and dual drive-thrus. Franchisees and McDonald’s co-invested in these upgrades (with McDonald’s often as the landlord footing part of renovation costs) to keep locations attractive. This highlights that being a landlord also means investing in property improvements over time. In many cases McDonald’s provided rent incentives or contributions to franchisees to renovate restaurants, knowing that a refreshed location would drive higher sales (and thus higher royalties and rent over time). The real estate ownership gave McDonald’s a direct interest in preserving long-term site value, not just short-term sales – a mindset more like a property developer ensuring their shopping mall stays up-to-date.

Lastly, McDonald’s has had to adjust its real estate footprint in response to global events. A notable example was the exit from Russia in 2022 due to geopolitical circumstances. McDonald’s owned and leased hundreds of properties in Russia, all of which it sold to a local buyer when it withdrew from the country. While a one-time event, it showed that those hard assets (land, buildings) had to be dealt with and could even incur charges (McDonald’s took a $1.4 billion write-off largely related to the disposal of its Russian real estate and business). Despite such challenges, McDonald’s overall global presence continues to grow. The company is now present in over 100 countries, and in many of these, the “golden arches on every corner” ambition is still in progress, fueled by its franchise partners and real estate investments.

International trends also include the rise of new formats like drive-thru only restaurants, delivery-centric kitchens, or smaller urban footprint stores – each of which involves different kinds of real estate. McDonald’s is experimenting with concepts like drive-thru lanes for mobile orders and locations optimized for delivery pickups. These innovations will influence how McDonald’s selects and designs real estate (for example, larger lots to accommodate more drive-thru lanes, or conversions of existing buildings for kitchen-only “dark stores”). The flexibility and deep pockets that McDonald’s has due to owning real estate can facilitate these adaptations – they can pilot a new concept on a property they own without needing a landlord’s permission, for instance.

As McDonald’s marches toward 50,000 restaurants, one thing remains clear: the strategy that Ray Kroc and Harry Sonneborn kickstarted in 1956 – focusing on “bricks and mortar” alongside burgers – is still very much alive. McDonald’s has proven that you can scale a business by leveraging other people’s capital (franchisees invest in operating the restaurant) while retaining control of the most crucial assets (the brand and the land). It’s a strategy often envied and one that underpins the company’s identity. Next time you bite into a Big Mac, remember that McDonald’s isn’t just making money from that burger – it’s also likely making money from the ground underneath it.

McDonald’s Real-Estate Strategy has enabled the company to enjoy steady rent income, high profit margins, and control over its vast franchise network. From its historical inception to its current global expansion plans, this approach illustrates how thinking beyond just the core product (food) can elevate a business model. In McDonald’s case, flipping burgers while renting land has been the not-so-secret sauce to decades of growth and financial success. 🍔🏢💰