McDonald'sreason 01 of 4it is wired into how the customer already worksderived 2026-08-20accession 0000063908-26-000073
McDonald's structural position as landlord to 95% franchised operators creates a rent-plus-royalty toll on systemwide sales that converts volatile restaurant economics into stable, high-margin fee income. The real estate lock-in—20-year franchise terms tied to company-controlled sites—makes franchisee switching prohibitively costly and secures recurring cash flow regardless of near-term traffic fluctuations.
the thesis · admitted · the reason above is the thesis, not printed twice
no findingread · nothing bore on it
It held on this filing. No finding was written because nothing in it bore on the reason — the sentences it was read against are below.
the evidence · every sentence checkedsix sentences · whole, uncut
the claims it rests on
“Of the 46,028 McDonald's restaurants at June 30, 2026, approximately 95% were franchised”
“Under a conventional franchise arrangement, the Company generally owns or secures a long-term lease on the land and building for the restaurant location”
“Conventional franchisees contribute to the Company's revenue, primarily through the payment of rent and royalties based upon a percent of sales, with specified minimum rent payments”
“The Company's heavily franchised business model is designed to generate stable and predictable revenue, which is largely a function of franchisee sales, and resulting cash flow streams”
“Franchised margins represented approximately 90% of restaurant margin dollars”
what it was checked against
20-year franchise term length
“These fees, along with occupancy and operating rights, are stipulated in franchise/license agreements that generally have 20-year terms.”