McDonald’s to Raise Franchise Royalty Fees for First Time in 30 Years

McDonald’s to Raise Franchise Royalty Fees , for First Time in 30 Years.

Starting Jan.

1, new McDonald's franchisees will have to pay 5% in royalty fees, as opposed to the current requirement of 4%.

The increase is the fast food chain's first in nearly three decades.

While we created the industry we now lead, we must continue to redefine what success looks like and position ourselves for long-term success to ensure the value of our brand remains as strong as ever, McDonald’s U.S. President Joe Erlinger, via CNBC.

We’re not changing services, but we are trying to change the mindset by getting people to see and understand the power of what you buy into when you buy the McDonald’s brand, the McDonald’s system, McDonald’s U.S. President Joe Erlinger, via CNBC.

Existing franchisees or those who purchase franchised locations from another entity will not have to pay the higher percentage, CNBC reports.

.

Current locations that are rebuilt or transferred between family members will not be subjected to the increase either.

Franchisees operate approximately 95% of the fast food chain's U.S. restaurants, CNBC reports.

.

While McDonald's franchisees have clashed with the company over a variety of issues in the past.

Average cash flows for American operators have increased 35% over the past five years, CNBC reports.