McDonald's makes most of its franchise money from rent, not burgers.

A conventional McDonald's franchise combines permission to use the restaurant system with access to a site. The corporation commonly owns the property or leases it from another landlord, then makes the facility available to the operator. The operator runs the restaurant and pays rent, royalties and associated fees.

The company's 2024 franchise disclosure reports $10.017 billion in rents. Its accounting separates this rental income from royalties and initial fees, so the central comparison is not simply an analyst's metaphor. Rent really is a distinct, substantial stream in the published accounts, rather than an estimate based on the value of restaurant buildings.

However, the popular phrase that McDonald's is a property company instead of a burger company goes too far. Restaurant sales generate the cash that supports both rent and royalties. The corporation also operates restaurants directly, and developmental licensees generally use a different arrangement in which McDonald's collects royalties without supplying the same property package.

The development of the property model is closely associated with Harry Sonneborn, an early financial executive who worked with Ray Kroc. Controlling restaurant sites offered a way to build a franchising business with a continuing source of revenue and a tangible interest in its locations.

Under the conventional arrangements described in the 2024 report, a franchise generally lasts 20 years. McDonald's retains control of the underlying real estate and building when that agreement ends, allowing a new agreement with the same operator or another franchisee, or closure of the restaurant.

The arrangement also assigns responsibilities. Franchisees generally pay property taxes, insurance and maintenance associated with occupancy. Those obligations matter because a rental receipt is not the same thing as cost-free profit, and the corporation itself may owe money to an outside property owner.

The restaurant system and the listed corporation are different accounting boundaries. A meal sold at a franchised restaurant is revenue for the franchisee. Only the amounts due to McDonald's, such as rent and royalties, become revenue for the corporation. Adding every restaurant's sales to corporate revenue would therefore describe a different measure.

That distinction explains why franchising can make corporate financial statements look unlike those of a restaurant operator. A company-operated outlet records food sales but also bears the direct costs of employees, ingredients and restaurant operations. A franchised outlet contributes fees under its agreement, while its operator bears those day-to-day expenses.

Rent is not completely detached from restaurant performance, either. The disclosure describes continuing rent based on a percentage of sales, with minimum payments. A minimum provides a contractual floor, while a sales-linked element can rise with a successful restaurant. Calling the income guaranteed would ignore business failure, collection risk and the corporation's own lease commitments.

The most accurate version of the fact is therefore narrower and more interesting than the slogan. McDonald's has made property control an important component of a food franchise system. Its real estate position supports continuity and contractual leverage, but the value of that position still depends heavily on maintaining restaurants that customers want to visit.

A familiar comparison is a shop inside a shopping center: the retailer sells goods, while a landlord receives payment for the premises. McDonald's combines that property relationship with a restaurant brand and operating system. Looking only at the burger counter misses the separate contracts behind the sale.