How Much Does a McDonald's Franchise Cost in Canada?

What a McDonald's Franchise Costs in Canada

The $45,000 CAD franchise fee is the smallest number in a Canadian McDonald's deal. The total investment runs $700,000 to $1,500,000 CAD, and most of it goes to equipment, signage, seating, initial inventory and, on a resale, the price you pay the departing operator.

McDonald's applied its 2024 royalty change in Canada as well as the US: restaurants opened, relocated or bought from the company from January 1, 2024 pay 5%, while a restaurant bought from another operator generally keeps the older 4% rate.

Rent Is the Biggest Recurring Fee

McDonald's owns or leases the property at its Canadian restaurants and sublets it to the operator. Rent is charged as a percentage of sales, typically 12% to 15% of gross in Canada, which makes it the largest recurring cost after food and labour.

Stack the fees and the load is heavy before you pay a single employee:

• Royalty: 4% or 5%
• Advertising fund: 4%
• Rent: 12% to 15%

That is roughly 20% to 24% of every dollar of sales going back to McDonald's. Because every fee is a percentage, a lower-volume restaurant carries the same fee rate as a busy one but keeps far less after costs. Volume is what makes the model work.

Drive-through accounts for an estimated 60% to 70% of Canadian McDonald's sales, and breakfast is unusually strong across the country. When you assess a Canadian site, weight morning commuter flow and drive-through access more heavily than seating.

How Much McDonald's Operators Make in Canada

McDonald's does not publish Canadian earnings. There is no Canadian equivalent of a US Item 19 financial performance representation for McDonald's restaurants, so there is no franchisor-published sales or profit figure for a Canadian operator. Treat that disclosure gap as a yellow flag to raise with a franchise lawyer before you sign.

Working from franchise broker disclosures and industry data, estimates put Canadian operator net income at $100,000 to $250,000 CAD a year for a median-performing restaurant. Strong drive-through sites in growing suburbs can do better; urban and mall locations often do worse.

That range is an estimate, not a disclosure. Ask for the selling operator's financial statements on any resale and have an independent Canadian accountant review them against the rent, royalty and advertising percentages above before you agree a price.

Who McDonald's Canada Approves

Entry is restrictive. McDonald's Canada approves most new franchisees from within its existing operator network: people who have worked in McDonald's management or come through its internal succession path. A first-time buyer is far more likely to acquire an existing restaurant from a retiring operator than to be granted a new build.

The process runs through an application, interviews, and a training program of 9 to 18 months in a working restaurant before you are matched with a location. That training period ties up time and capital before the restaurant earns anything for you, so budget for it.

McDonald's Canada does not publish a fixed liquid capital minimum that we could verify for this guide. Confirm the current requirement directly with McDonald's Canada franchising before you build your budget.

Financing a McDonald's Franchise in Canada

Canadian McDonald's deals are financed through Canadian lenders. The usual sources are:

• Chartered banks. RBC, TD, BMO, Scotiabank and CIBC all run franchise lending programs, and a McDonald's resale with a long operating history is the kind of file they favour. Expect them to want meaningful cash equity and a personal guarantee.
• BDC (Business Development Bank of Canada). BDC lends alongside banks and will often finance a larger share of a business acquisition, including goodwill, at a higher rate.
• CSBFP (Canada Small Business Financing Program). Loans go up to $1,150,000, but the program does not finance goodwill, which is most of a resale price. It is useful for equipment and leasehold improvements, not the purchase itself.

Because McDonald's controls the real estate, you are not financing land or a building, only the business, equipment and working capital. See how Canadian banks and BDC finance restaurants and compare Canadian lenders before you approach one.

Franchise Disclosure Rules by Province

Canada has no national franchise law. Disclosure is set province by province, and the rules differ:

• Ontario. The Arthur Wishart Act (Franchise Disclosure), 2000 requires the franchisor to deliver a disclosure document at least 14 days before you sign or pay anything. If no disclosure document is delivered, you can rescind the agreement for up to two years.
• Quebec. Quebec has no franchise statute. Franchise agreements there fall under the Civil Code, so you get no mandatory pre-sale disclosure period. Read how franchise law works in Quebec before buying there.

Whatever the province, have a Canadian franchise lawyer review the franchise agreement, the sublease and the transfer terms on any resale.

Is a McDonald's Franchise in Canada Worth It?

For an operator who gets approved, a Canadian McDonald's is one of the most durable QSR businesses in the country: national brand traffic, strong breakfast and drive-through volume, and a franchisor that controls the real estate. The trade-offs are the 20% to 24% fee load, no published Canadian earnings, a long training period, and limited leverage when rent terms are reset.

If you are comparing Canadian QSR brands, Tim Hortons charges a 3% royalty against McDonald's 5% on new restaurants (4% on most resales), with its own rent and advertising structure. For a wider view of the Canadian market, see the most profitable franchises in Canada.

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