4P--Profitability

1) What is the start up cost for the McDonald’s?

Most franchisees enter the system by purchasing an existing restaurant, either from McDonald's or from a McDonald's franchisee. A very small number of new operators enter the system by purchasing a new restaurant. The costs stated below are only estimates and may change without prior notice.

*New restaurant

The costs for starting an entirely new McDonald's restaurant can be anything between RM2.0 million to RM4.5 million. The costs also depend on the restaurant size and type, its location, style of decor and landscaping.

Initial Costs

(A)	USD 22,500 Franchise fee paid upon or prior to the commencement of the franchise.
(B)	RM50,000 Interest-free security deposit for the faithful performance of the franchise, refundable upon the expiration of the franchise.
(C)	RM200,000 - RM250,000 Pre-opening expenses - Staff training and salaries, stock trading, living expenses while training and other normal start-up costs.
(D)	RM1.7 million - RM2.5 million Approximate cost of kitchen equipment, signage, seating, decor and landscaping paid to individual suppliers.
(E)	RM800,000 to RM3 million [depending on store type (Drive Thru, Mall, Oil Alliance or Shop Front)] Approximate cost of all civil works, ventilation system and renovations to the premises paid to individual contractors Paid by Golden Arches Restaurants Sdn Bhd.
(F)	Other Miscellaneous Costs Stamp duty (paid to the government) is assessed on necessary documentation and is paid by the franchisee in addition to the working capital required. Ongoing Fees (Monthly) A Royalty Fee, which is a system fee, is based on a percentage of the restaurant's gross sales, which is currently at 5%. If you prepare to rent the store, it is depending on store type, location and performance – may vary between 13% to 20%.  *Existing restaurant For an existing McDonald’s restaurant you will usually buy it over based on the restaurant's market value. In addition, the franchise fee and security deposit aforementioned will also be payable.