McDonald's Corporation
McDonald's Corporation owns, operates, and franchises restaurants under the McDonald's brand in the United States and internationally. It offers food and beverages, including hamburgers and cheeseburgers, various chicken sandwiches, fries, shakes, frozen desserts, sundaes, soft serve cones, cookies, pies, soft drinks, coffee, and other beverages; and full or limited breakfast, as well as sells various other products during limited-time promotions. The company owns and operates franchised restaurants under various structures, including conventional franchise, developmental license, or affiliate. McDonald's Corporation was founded in 1940 and is based in Chicago, Illinois.
What does it do?
McDonald's is the world's largest fast food chain, with over 40,000 restaurants across more than 100 countries. You already know the Golden Arches — Big Macs, McNuggets, McFlurries. But here's the twist most people miss: McDonald's doesn't actually cook most of its own food. About 95% of its restaurants are run by independent business owners called franchisees, who pay McDonald's for the right to use the brand and systems. McDonald's is less of a burger company and more of a brand licensing and real estate empire.
McDonald's is one of the most widely held stocks in the world and is seen as a bellwether — a signal — for consumer health globally. When people start trading down from sit-down restaurants to fast food, McDonald's tends to win, which makes it an unusual defensive play even in tough economic times. With inflation squeezing budgets, the question of whether value-seeking consumers still choose McDonald's over even cheaper options like grocery store meals is one investors are watching closely right now.
How does it make money?
McDonald's made $26.9 billion in revenue in its latest fiscal year, up from $25.9 billion the year before. Money comes in through three main channels: royalties and fees paid by franchisees (typically a percentage of their sales), rent collected from franchisees who operate on McDonald's-owned land and buildings, and direct sales from the small number of company-owned restaurants. The franchising model is the jewel — McDonald's collects steady income without bearing the full cost of running thousands of kitchens. Net income hit $8.6 billion, meaning McDonald's kept roughly 32 cents of profit for every dollar of revenue, which is exceptionally high for any business.
Why do investors care?
The growth story at McDonald's has two engines: international expansion and digital loyalty. The company is aggressively growing in markets like China, the Middle East, and Africa where fast food penetration is still relatively low. At home, its loyalty app now has tens of millions of active users, which means McDonald's can track what you order, send you targeted deals, and keep you coming back — turning a one-off burger purchase into a recurring relationship. For the thesis to work, McDonald's needs to maintain its value perception with budget-conscious consumers while also growing average spend per visit through upselling and digital engagement.
Deep Dive
MemberA full investor briefing on McDonald's Corporation — history, leadership, risks, and outlook.