Companies and Brands

Can McDonald's Have 50,000 Restaurants?

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McDonald’s (NYSE: MCD) first restaurant started operations in California in 1940. Legendary CEO Ray Kroc took over what was to become America’s fast food empire in 1955 and drove the store above 10,000. Today, McDonald’s has over 40,000 locations. That is up from 31,000 in 2005. McDonald’s revenue is growing fast enough that there is almost certainly room for more expansion. These are the top fast-food chains in the US.

Today, McDonald’s has just over 13,000 locations in the US. Its most successful overseas markets, by store count, are China, Japan, and the UK. Recently, management said China is its most promising market for adding more locations.

Despite its size, McDonald’s posted a revenue gain of 14% to $6.7 billion in the most recent quarter, and net income rose 17% to $2.3 billion. Management expects this sales growth to continue over the balance of the year.

McDonald’s business in China is a venture owned by several companies. It plans to buy out other owners to control almost 50%. Based on the transaction, the China business was valued at $6 billion. The valuation seems low given the expansion potential in the world’s largest country by population. CEO Chris Kempczinski approved the deal because his company wants to “further benefit from our fastest growing market’s long-term potential.”

Reuters recently reported on McDonald’s long-term China plans. The store count in the country has approximately doubled since 2017 to 5,500 locations. Management’s goal is to reach 10,000 stores by 2028. Without adding a single store in any other country, that would put the worldwide total at about 46,000.

Comparable store sales in the US were about the same as in overseas markets based on numbers from the most recently reported quarter. Both were about 8%. That means growth in America has not slowed. There is almost certainly more room for McDonald’s in its domestic market. These are the most popular fast-food chains in all 50 states.

Can McDonld’s store count hit 50,000. Almost certainly “yes’. ‘

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