How McDonald's Makes Money (It's Not the Burgers)

Why is fast food so expensive, and where does the money from one burger meal actually go? We take one meal, a Big Mac, fries and a drink at $9.29 (McDonald's own US average from May 2024; it was $7.29 in 2019), and print the receipt. Food and packaging: $2.64. Crew and managers: about $2.79. Power, repairs, insurance and the rest: about $1.13. Advertising: 37 cents. Royalty: 37 cents. Rent: about 95 cents. What is left for the person who owns the restaurant, before loans and tax: about $1.04. Fast food prices going up 42% since 2019 has more than one cause: ground beef went from $3.82 to $6.92 a pound, pay went up, and the twist is who owns the building. How McDonald's makes money: it collected $10.4 billion in rent and $6 billion in royalties in 2025, both charged as a slice of sales, not profit. pocket money: where your money actually goes. A new receipt every episode. The receipt applies average shares from McDonald's own filings (the 2026 franchise disclosure document and the 2025 annual report) to the $9.29 meal, so it is an illustration of where a typical sales dollar goes, not the costing of one burger. The crew line is a stand-in from the restaurants McDonald's runs itself, the rent line is our arithmetic, and the owner's share is before loan payments, new equipment and tax. Franchisees set their own prices, so no single meal costs exactly this. Fast food inflation figures are US data to August 2026. This video is not financial advice. Chapters 0:00 Why is fast food so expensive? 0:21 Make your call: fast food or beef? 0:38 Our $9.29 meal 0:57 Food and packaging: $2.64 1:17 Ground beef: $3.82 to $6.92 a pound 1:47 Something else grew too 2:02 The people: about $2.79 2:29 California's $20 minimum wage 2:55 The receipt so far 3:13 The bills you never think about 3:34 The royalty: 37 cents 3:52 The big one is rent 4:14 What is left for the owner 4:36 Fast food as a luxury 5:01 Delivery: another receipt 5:20 The twist: head office is the landlord 5:44 A slice of sales, not profit 6:07 To be fair to head office 6:28 The pricing engine 7:01 Big Mac prices around the world 7:18 Why fast food got so expensive 7:33 Your $9.29 meal, itemised 8:02 Next receipt Sources Average US Big Mac meal $9.29, up from $7.29 in 2019: McDonald's USA open letter (May 2024), as reported by CNBC Fast food prices up 42%, all prices up 31% (Aug 2019 to Aug 2026): US Bureau of Labor Statistics (BLS), CPI; our percentages from the index values Ground beef $3.82 a pound (Aug 2019), $6.92 (Aug 2026): BLS average prices (100% ground beef) US cattle herd 86.2 million on 1 January 2026: USDA NASS. "Smallest since 1951": Drovers Median fast food pay $10.93 an hour (May 2019), $15.00 (May 2025): BLS Food and packaging about 28% of sales; royalty 4% (5% for new restaurants from 1 January 2024); advertising at least 4%; rent as a percentage of sales; $1,472,000 to $2,807,000 to open a restaurant; pricing engine $264 a year: McDonald's USA Franchise Disclosure Document, 2026 Royalty rise the first in nearly 30 years: CNBC (Sep 2023) About 95% of restaurants franchised; rents $10.4 billion, royalties $6.0 billion; company-run restaurant sales $9.7 billion; about 56% of the land and 80% of the buildings owned; operating margin 46.1%; payroll 30% of sales in company-run restaurants; US franchised revenues about 14% of US franchised sales: McDonald's 10-K, FY2025 Restaurant margins of about 12 to 15%: McDonald's, Wendy's and RBI 10-K filings, FY2025 California's $20 fast food minimum wage (1 April 2024), prices up 1.5%: UC Berkeley IRLE (Apr 2026). About 18,000 fewer jobs, prices up 3.3 to 3.6%: NBER working papers 34033 and 34990 78% call fast food a luxury: LendingTree survey (April 2024) Lower-income visits down nearly double digits across the industry: McDonald's CEO (Nov 2025), as quoted by Nation's Restaurant News Fewer customers than a year before (Q2 2026): McDonald's 10-Q $5 Meal Deal (June 2024): McDonald's Commission of 15% to 30% for local restaurants: DoorDash. $36.95 order, $63.21 delivered: Self Financial (2025) About $8.5 billion of franchisee support through 2036; operating margin target in the low-to-mid 50% range by 2030: McDonald's investor update (23 Sep 2026) Price recommendations at nearly 14,000 restaurants; a Big Mac at $5.69 and $6.89 two miles apart: Reuters (29 Sep 2026), as reported by The Next Web, Decrypt and Futurism. McDonald's reply: 1 Oct 2026 Big Mac prices by country, July 2026: The Economist, Big Mac index #pocketmoney #fastfood #mcdonalds #moneyexplained #inflation