The real secret behind McDonald’s’ billions

Updated June 9, 2025, 8:34 a.m. | By East Coast Breakfast / Skyye Ndlovu

McDonald’s isn’t really in the burger business. Find out what they’re actually selling.

McD / Robert Way / iStock

When you hear the word McDonald’s, your brain probably skips straight to that glorious aroma of fries and burgers you swear you’ll never eat again (until Friday night comes calling).

Well - plot twist. McDonald’s isn’t just in the business of feeding you.

Nope. Behind that Golden Arches glow is a real estate empire so slick, it makes Monopoly look like child’s play.

While you were distracted by the McFlurry machine “conveniently” being out of order again, McDonald’s was quietly becoming one of the most successful real estate companies on the planet.

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A brief trip down memory lane

Back in 1937, two brothers, Richard and Maurice McDonald kicked things off with a humble hot dog stand in Pasadena.

The McDonald brothers / mcdonald.fandom.com

By the early ‘50s, they were flipping burgers with a factory-style assembly line that would make Henry Ford shed a single tear of pride.

Enter Ray Kroc, a milkshake machine salesman with ambition levels somewhere between Elon Musk and a toddler hyped on sugar.

After selling the McDonald brothers eight of his milkshake mixers, he basically said, “Hey, mind if I franchise this bad boy and casually take over the world?”

The brothers were like, “Cool, but don’t get crazy.”

Sadly. He got crazy.

In 1961, Kroc bought them out for what probably seemed like good money at the time.

Somewhere, the two McDonalds ghosts are still facepalming.

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Now here’s where it gets chef’s kiss clever. Former McDonald’s CFO Harry J. Sonneborn famously said:

“We are not technically in the food business. We are in the real estate business. The only reason we sell fifteen-cent hamburgers is because they’re the greatest producer of revenue from which our tenants can pay us rent.”

They don’t need to make their money by jacking up the price of cooldrink refills or charging extra for cheese (which they still do, obviously).

McDonald’s Corporation buys the land and buildings their restaurants sit on and then rents them out to franchisees, with some very generous markups - naturally.

On top of that rent, they take a cut of every Big Mac, Coke, and Happy Meal sold.

A billion dollars later

Today, McDonald’s owns about 45% of the land and 70% of the buildings across its 36,000+ locations worldwide.

Only 15% of those restaurants are actually run by McDonald’s itself. The rest are operated by franchisees, each of whom pays rent to the corporate overlords and a percentage of their sales.

From company-operated stores, McDonald’s keeps just 16% of the revenue.

From franchisees however, they keep a whopping 82%.

In 2014, McDonald’s made $18.2 billion from its own stores but only pocketed $2.9 billion of that.

Meanwhile, from $9.2 billion in franchise revenue, they kept $7.6 billion.

If that’s not a reason to high-five your accountant, I don’t know what is.

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So the next time you’re queuing up for a Quarter Pounder, remember: you’re not just in a restaurant.

You’re standing inside a cash-generating property asset masquerading as a fast-food joint.

Psshh… and you thought the secret sauce was just 1000 Island dressing.