Reported Earlier, 'McDonald's To Raise Royalty Fees For New Franchised Restaurants For First Time In Nearly 30 Years; Franchise Royalty Fees For U.S. Restaurants Will Rise From 4% To 5% For Operators Opening New Locations' - CNBC
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McDonald's is set to increase its franchise royalty fees for new U.S. restaurants from 4% to 5%, the first hike in nearly 30 years. The change, effective from Jan. 1, will not affect existing franchisees maintaining their current footprint or buying a franchised location from another operator. However, new franchisees, buyers of company-owned restaurants, and relocated restaurants will be affected. The move may face backlash due to McDonald's strained relationship with its U.S. franchisees.
September 22, 2023 | 12:36 pm
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NEUTRAL IMPACT
McDonald's decision to raise royalty fees for new franchised restaurants could potentially increase its revenue. However, the move may face backlash due to the company's strained relationship with its U.S. franchisees, which could impact the company's reputation and future franchise sales.
The royalty fee increase could potentially boost McDonald's revenue in the short term. However, the company's strained relationship with its U.S. franchisees could lead to backlash, potentially impacting the company's reputation and future franchise sales. Therefore, the short-term impact on the stock price is neutral.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 100