McDonald's Corporation

McDonald's Corporation is the world's largest quick-service restaurant company, operating or franchising more than 45,000 restaurants across over 100 countries that serve a locally relevant menu of hamburgers, chicken, fries, beverages, and breakfast items to roughly 65 million customers daily. The company generated $26.9 billion in revenue and $8.6 billion in net income in fiscal 2025, but those figures understate the economic engine: systemwide sales—the aggregate sales of all McDonald's restaurants, franchised and company-owned—reached $139.4 billion, making McDonald's one of the largest retail platforms on earth.

This is a story about a business model that has been refined over seven decades into something closer to a royalty on global consumer spending than a restaurant company. With approximately 95% of locations franchised, McDonald's collects rent and royalties on franchisee sales while carrying remarkably little operational exposure to food cost inflation, labor markets, or the day-to-day volatility of running individual restaurants. The file turns on a single question: whether the system's current momentum—3.8% global comparable sales growth in Q1 2026, market share gains in nearly all top-10 markets, and the most aggressive unit development cycle in company history—can be sustained against a backdrop of rising beef costs, pressured low-income consumers, and a franchisee base increasingly feeling the squeeze of inflation.

What makes McDonald's worth serious analytical attention is not any single year's comp number but the durability of the cash flows and the compounding machinery behind them: 50 consecutive years of dividend increases, an 84% free cash flow conversion rate, and a real estate portfolio that functions as a permanent structural advantage over competitors who pay rent rather than collect it.