The Landlord to Its Own OperatorsWide moat

The heart of the real-estate model is that McDonald's is landlord to its own franchisees. Rather than merely licensing a brand, McDonald's owns or controls the property, secures the location, builds or approves the restaurant, and then leases it to the operator. This structure gives the company a form of control over its franchisees far more powerful than a trademark agreement alone: the operator's right to occupy a valuable, high-traffic location is tied to the lease and to compliance with McDonald's standards, so the company can enforce quality, consistency, and adherence to the system with the ultimate leverage of the location itself. Alignment through property ownership is deeper and more durable than alignment through contract.

It also means McDonald's, not the franchisee, captures the value of the real estate — the appreciation of the land, the rising rents, the control of the site — while the franchisee provides the capital and effort to run the restaurant on it. This is the mechanism that lets McDonald's earn both a royalty and a rent, doubling the quality of its income. The price is that owning the real estate is capital-intensive and carries the cyclical and interest-rate exposure of property. But the landlord-to-its-operators model is the strategic masterstroke at the center of McDonald's economics — the reason it controls its system and its income so completely, and a structure competitors who merely license their brands cannot match — landlord and franchisor across most of more than 45,000 sites¹. Nearly two-thirds of what franchisees paid McDonald's in 2025 was rent: $10,442 million of $16,548 million². That is also the lever McDonald's reached for when it needed franchisees to keep investing, since the September 2026 support package is paid largely as rent relief³.