Image Credit: Mike Mozart via flickr
A:According to the 2016 McDonald’s Annual Report, the company made a total of $24,622,000,000 in revenues for the year ended December 31, 2016. If you take this number and divide it by the 365 days per year, you will find that Mcdonald’s makes approximately $67,457,534 per day in revenue.
However, revenue is money that comes in from the sales of items such as Big Macs, Quarter Pounders, or fees earned from the franchises. Revenue does not take into account expenses. To determine how profitable McDoanld’s was in 2016, we have to look at their net income (profit) for the year. In simple terms, we can determine net income by taking revenue minus expenses.
McDonald’s had net income of $4,687,000,000 for the year ended December 31, 2016. When we divide this net income by 365 days per year, we find that McDonald’s earned about $12,841,096 per day in net income.
McDonald’s had 36,899 restaurants worldwide at the end of 2016. The majority of these restaurants were franchised locations (approximately 84%). A large portion of McDonald’s revenue came from fees collected through the franchises.
Generally, the fees paid by the franchised restaurants consists of an initial fee, rent, and royalties that are paid based on percentage of sales earned at the franchised locations.
McDonald’s corporation relies heavily on a success of the franchises for it continued growth and profitability. According to the annual report, its long-term goal is to have 95% franchised locations. The company indicates that the franchises create more predictable revenue while also lowering costs. A big cost savings is with capital expenditures because the franchise picks up a lot of these costs.
Below we have provided a comparison of how much McDonald’s makes in a year and per day in comparison to Wendy’s. You can get an idea of the size of McDonald’s by looking at these figures.
|Restaurant||Revenue (2016)||Revenue Per Day||Net Income (2016)||Net Income Per Day||Number of Restaurants (as of January 1, 2017)|