McDonald's Plans Royalty Fee Hike For Some Franchisees Starting 2024: Report
Portfolio Pulse from Akanksha Bakshi
McDonald's Corporation is planning to increase its royalty fees from 4% to 5% for new franchisees starting January 1, 2024. This is the first such increase in nearly 30 years. The change will not affect current franchisees who maintain or expand their existing footprint or those purchasing an existing franchised location. The increased rate will apply to new franchisees, purchasers of company-owned restaurants, and relocated eateries.
September 22, 2023 | 1:51 pm
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NEUTRAL IMPACT
McDonald's Corporation's decision to increase royalty fees for new franchisees could potentially increase the company's revenue. However, it might also deter potential new franchisees due to the increased cost.
The increase in royalty fees could potentially increase McDonald's revenue, which could positively impact the company's stock. However, the increased cost might deter potential new franchisees, which could negatively impact the company's expansion plans and, in turn, its stock. Therefore, the short-term impact on the stock is neutral.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 100