REAL CASE 021

McDonald’s Is 95% Franchised With $139.4 Billion in Systemwide Sales: Why Didn’t 0.8% U.S. Comparable Growth Change the Business Model?

A company reports $26.885 billion in revenue. But restaurant sales across its entire branded system reach $139.4 billion. Which number represents McDonald’s true scale? Both matter. But they measure different things. To understand McDonald’s, the first question is: Who operates the restaurants? At year-end 2025, McDonald’s had 45,356 restaurants worldwide. 43,317 were franchised. 2,039 were company-operated. The franchise rate was approximately 95%. That means the vast majority of restaurants carrying the McDonald’s brand are not operated entirely by McDonald’s Corporation. Franchisees carry substantial restaurant-level responsibilities. Employees. Equipment. Restaurant improvements. Food and labor costs. Daily operations. McDonald’s participates through rent, royalties, real estate, company-operated stores, and other system economics. Therefore, two numbers must remain separate. 2025 systemwide sales were approximately $139.4 billion. That represents sales generated across the entire restaurant system. 2025 corporate revenue was $26.885 billion. That is revenue recognized by McDonald’s Corporation under its business structure. The $139.4 billion cannot be described as McDonald’s corporate accounting revenue. And $26.885 billion cannot represent total consumer sales across the entire system. This structure was an important advantage entering the 2020s. When the pandemic disrupted dine-in traffic, McDonald’s did not need to build non-dine-in channels from zero. It already had a large drive-thru network. Delivery partnerships. Digital ordering. Demand could move toward drive-thru, takeaway, delivery, and digital orders. After the pandemic, the question changed. Consumers no longer asked only: Can I buy McDonald’s conveniently? They increasingly asked: Is it worth the price? Food costs increased. Labor costs increased. Household expenses increased. Consumers became more sensitive to price and value. Menu price increases can raise average ticket. But if customers decide the meal is no longer worth it, transaction frequency can fall. In a highly franchised system, this is also a franchisee-economics problem. Excessive discounting can pressure restaurant profitability. Prices that are too high can weaken traffic. So value does not simply mean lower prices. It must balance: Will consumers return? Can franchisees remain profitable? Can McDonald’s maintain healthy rent and royalty economics? McDonald’s did not respond by changing the franchise model. It chose to improve the productivity of the existing system. Loyalty. Digital ordering. Delivery. Drive-thru. Value. Restaurant Development. These tools reinforce one another. Loyalty helps identify repeat customers. Digital ordering reduces transaction friction. Delivery and drive-thru expand occasions. Value supports price relevance. New restaurant development expands coverage. The 2025 numbers show that this system remained economically powerful. Corporate revenue was $26.885 billion. Systemwide sales were $139.4 billion. Operating income was $12.4 billion. Operating cash flow was $10.6 billion. Free cash flow was $7.2 billion. Diluted EPS was $11.95. The system added nearly 2,300 restaurants. By Q2 2026, the U.S. market provided an important warning. U.S. comparable sales increased only 0.8%. International Operated Markets increased 1.5%. International Developmental Licensed Markets increased 1.9%. Companywide comparable sales increased 1.3%. These are not high-growth figures. So Success cannot mean: Every mature McDonald’s market is growing rapidly. Success means: Even with low-single-digit comparable growth in mature markets, the franchise structure, loyalty, digital capabilities, and restaurant development continue expanding the system. Q2 2026 corporate revenue was $7.099 billion, up 4%. Global systemwide sales were approximately $37 billion, up 5%. Across 70 loyalty markets, loyalty systemwide sales over the previous 12 months exceeded $40 billion. 90-day active loyalty users approached 220 million. McDonald’s real competitive advantage is not how many more hamburgers it sells in one quarter. It is a system connecting franchisee capital, real estate, consumer traffic, digital identity, loyalty, delivery, and restaurant development. The 0.8% U.S. comparable-sales result shows that a mature system still requires precise execution. It does not show that the business model failed. That is why Case 021 is classified as Success.

United StatesFood / Restaurants / Quick Service Restaurants / Franchise SystemSuccessWhy McDonald’s, despite the pandemic, inflation, and only 0.8% U.S. comparable-sales growth in Q2 2026, did not repurchase large numbers of franchised restaurants or abandon digital channels, but instead preserved an approximately 95% franchised structure and used value, loyalty, digital ordering, delivery, and Restaurant Development to improve the productivity of the existing system; and why $26.885 billion of corporate revenue and $139.4 billion of systemwide sales must be understood separately to see the true scale and quality of McDonald’s business model.

BEFORE

Before entering the 2020s, McDonald’s already had a highly franchised global network and extensive drive-thru, real-estate, digital, and delivery infrastructure. Franchisees carried substantial responsibility for equipment, restaurant improvements, employees, and daily operations, while McDonald’s participated economically through rent, royalties, company-operated restaurants, and the broader system. When the pandemic arrived, the core question was not whether McDonald’s needed to invent a new business model, but whether its existing franchise, drive-thru, digital, and delivery capabilities could quickly absorb demand moving away from dine-in. After the pandemic, the problem shifted toward inflation, price sensitivity, perceived value, and customer frequency.Number

AFTER

At year-end 2025, 43,317 of McDonald’s 45,356 restaurants worldwide were franchised and 2,039 were company-operated, for a franchise rate of approximately 95%. In 2025, corporate revenue was $26.885 billion, systemwide sales were $139.4 billion, operating income was $12.4 billion, operating cash flow was $10.6 billion, free cash flow was $7.2 billion, and diluted EPS was $11.95. The system added nearly 2,300 restaurants during the year. In Q2 2026, corporate revenue was $7.099 billion, up 4%, while global systemwide sales were approximately $37 billion, up 5%. U.S. comparable sales increased 0.8%, International Operated Markets increased 1.5%, International Developmental Licensed Markets increased 1.9%, and companywide comparable sales increased 1.3%. Across 70 loyalty markets, loyalty systemwide sales over the previous 12 months exceeded $40 billion, while 90-day active loyalty users approached 220 million. The highly franchised structure remained intact.Number

OUTCOME

SuccessCase Result

MODEL

McDonald’s must be understood on two levels: systemwide sales and corporate revenue. Systemwide sales include sales generated by all McDonald’s restaurants, whether company-operated or franchised. Corporate revenue includes sales from company-operated restaurants plus rent, royalties, and other fees from franchised restaurants. Under traditional franchise arrangements, McDonald’s typically owns the restaurant property or holds a long-term lease, while franchisees invest in equipment, seating, signage, improvements, and daily operations and pay rent and royalties based on restaurant sales. In 2025, revenue from franchised restaurants was $16.548 billion, including $10.442 billion of rent, $6.018 billion of royalties, and $88 million of initial fees. Company-operated restaurant sales were $9.690 billion and other revenue was $647 million, producing total corporate revenue of $26.885 billion. Systemwide sales were $139.4 billion. The approximately 95% franchised structure allows McDonald’s to participate in economic activity far larger than its directly operated restaurant base while distributing substantial restaurant-level operating capital and risk to franchisees.Business Model

Read the Case

# [SECTION

background] Before 2020: A 95% Franchised Structure Separates Brand Scale From Direct Operating Scale

McDonald’s franchise system is more complex than simply charging a brand fee.

Under traditional arrangements, McDonald’s typically owns the restaurant property or holds a long-term lease.

Franchisees invest in equipment, signage, seating, improvements, and daily operations.

They employ restaurant workers and carry substantial food, labor, and operating risk.

They then pay McDonald’s rent and royalties based on restaurant sales.

Some developmental licensees carry even more capital responsibility and pay related fees to McDonald’s.

This creates a distinctive economic structure.

Consumers see a McDonald’s restaurant.

But the party carrying the restaurant's daily operating risk may be a franchisee.

McDonald’s still participates through real estate, rent, royalties, brand, and system economics.

The smaller company-operated estate remains important.

It gives McDonald’s direct exposure to operations and allows it to test menus, processes, and technology.

A highly franchised model therefore does not mean leaving restaurant operations entirely.

Company-operated and franchised restaurants serve different roles.

# [SECTION

timeline] 2020-2026: From Off-Premise Resilience to Value Competition and Restaurant Development

In 2020, the pandemic disrupted dine-in traffic.

McDonald’s existing drive-thru, takeaway, delivery, and digital capabilities became critical.

The company did not need to invent an off-premise model from zero.

Existing channels were scaled rapidly.

In 2021, economies reopened and travel recovered.

Digital ordering and delivery did not disappear.

They became long-term channels.

In 2022, food and labor costs increased while household budgets faced inflation pressure.

Consumers became more focused on price and value.

The strategic question shifted from:

Can I buy conveniently?

To:

Is it worth coming back regularly?

In 2023, McDonald’s updated Accelerating the Arches and added Restaurant Development as a growth pillar.

That made an important point explicit:

Future growth would not depend only on comparable sales.

Restaurant count itself would also be a growth engine.

In 2024, loyalty, digital engagement, value, menu execution, and restaurant development continued.

In 2025, corporate revenue reached $26.885 billion.

Systemwide sales reached $139.4 billion.

Operating income reached $12.4 billion.

The system added nearly 2,300 restaurants.

In the first half of 2026, revenue was $13.616 billion.

Q2 U.S. comparable sales were +0.8%.

International Operated Markets were +1.5%.

International Developmental Licensed Markets were +1.9%.

Companywide comparable sales were +1.3%.

Across 70 loyalty markets, trailing-12-month loyalty systemwide sales exceeded $40 billion.

90-day active loyalty users approached 220 million.

The pandemic did not change the franchise logic.

Inflation did not change it.

Low-single-digit comparable growth in mature markets did not cause McDonald’s to repurchase the franchise system.

The company continued improving the productivity of the existing structure.

# [SECTION

problem_opportunity] Problem and Opportunity: A Mature System Must Manage Frequency and Value

McDonald’s was not facing a collapse of its business model.

It was facing maturity.

With more than 45,000 restaurants, many markets are already extensively covered.

Growth increasingly depends on:

Customer frequency.

Perceived value.

Ordering convenience.

Loyalty engagement.

Menu execution.

New-location development.

Price increases can raise average ticket in the short term.

But prices cannot rise indefinitely.

If consumers decide a McDonald’s meal is not worth the price, transaction frequency can decline.

That hurts franchisees.

It also affects McDonald’s rent and royalty economics.

The opportunity lies in assets the system already possesses:

A global restaurant network.

Loyalty data.

Digital ordering.

Drive-thru.

Delivery.

Purchasing scale.

Real estate.

Franchisee capital.

McDonald’s does not need to take 43,317 franchised restaurants back into company operation to influence consumer frequency.

It can influence demand through the system.

# [SECTION

business_model] Business Model: Behind $26.885 Billion of Corporate Revenue Is $139.4 Billion of Systemwide Sales

The most important rule in analyzing McDonald’s is never to combine systemwide sales and corporate revenue.

In 2025, systemwide sales were approximately $139.4 billion.

That represents sales across the entire McDonald’s restaurant system.

Corporate revenue was $26.885 billion.

This included:

Franchised restaurant revenue of $16.548 billion.

Company-operated restaurant sales of $9.690 billion.

Other revenue of $647 million.

Franchised revenue included:

$10.442 billion of rent.

$6.018 billion of royalties.

$88 million of initial fees.

These figures show how the highly franchised structure works.

McDonald’s does not need to record all franchised restaurant sales as corporate revenue.

It participates in those restaurant economics through rent and royalties.

This allows the company to influence a system far larger than its directly operated estate.

But the model should not be described as completely asset-free.

McDonald’s still owns and controls substantial real estate.

It still invests capital.

It invests in technology and brand.

The accurate interpretation is:

A large share of restaurant operating capital and risk sits with franchisees, while McDonald’s participates through real estate, brand, and system economics.

# [SECTION

execution] Execution: Loyalty, Digital, Value, Delivery, and New Restaurants Form One Demand System

The first execution track is loyalty and digital ordering.

Loyalty helps identify repeat customers and improve engagement.

Digital ordering reduces transaction friction.

By Q2 2026, trailing-12-month loyalty systemwide sales across 70 markets exceeded $40 billion.

90-day active loyalty users approached 220 million.

The second track is drive-thru and delivery.

These channels expanded rapidly during the pandemic and remained part of everyday consumption afterward.

The third track is value.

Value is not simply discounting.

Offers need to create incremental transactions while preserving franchisee restaurant economics.

That requires coordination among headquarters, franchisees, supply chains, and marketing calendars.

The fourth track is Restaurant Development.

The system added nearly 2,300 restaurants in 2025.

Even when mature-store comparable sales grow only in the low single digits, new restaurants can continue expanding systemwide sales.

McDonald’s therefore does not depend on one tool.

It connects loyalty, digital, convenience, value, and restaurant development.

# [SECTION

turning_points] Turning Point: From Channel Resilience to Frequency and Value Management in Mature Markets

The first Turning Point came in 2020.

Off-premise service moved from a convenience feature to an operating necessity.

Drive-thru, digital ordering, and delivery absorbed more demand.

The second came during the post-pandemic inflation period.

The question changed from:

Can consumers access McDonald’s conveniently?

To:

Do consumers believe the price is reasonable, and will they keep coming back?

The third came in 2023.

Restaurant Development became a core growth pillar, making clear that new restaurant count was also a growth engine.

The fourth appeared in Q2 2026.

U.S. comparable sales increased only 0.8%.

McDonald’s did not respond by repurchasing large numbers of franchised restaurants.

It did not abandon digital channels.

It did not stop restaurant development.

It continued using value, loyalty, digital channels, and new restaurants inside the highly franchised system.

The real turning point was not a change in business model.

It was the decision that when mature-market growth slowed, McDonald’s would improve the system rather than replace it.

McDonald’s true scale cannot be judged only by $26.885 billion of corporate revenue, and $139.4 billion of systemwide sales cannot be treated as corporate revenue. Its approximately 95% franchised structure allows franchisee capital, real estate, loyalty, digital channels, and restaurant development to support a system far larger than the company-operated estate. Q2 2026 U.S. comparable sales of only +0.8% show that mature markets require precise execution, not that the business model has failed.

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DECISION

What would you do?

After U.S. comparable-sales growth slowed to only 0.8% in Q2 2026, which option best reflects McDonald’s actual strategy?

ARepurchase thousands of franchised restaurants and shift the highly franchised system back toward company operation, requiring McDonald’s to assume more restaurant labor, food, operating, and capital risk directly.BMaintain the approximately 95% franchised model while using loyalty, value, digital ordering, drive-thru, delivery, and Restaurant Development to support customer frequency, convenience, and systemwide sales.CExit delivery and digital ordering and move most transactions back toward traditional counters and dine-in service in order to reduce digital-system and third-party-channel costs.DStop U.S. restaurant expansion and direct future restaurant development mainly toward international markets until U.S. comparable sales return to high growth.

Full Analysis

The real Turning Point in Case 021 was not a single product launch. It was a sequence of changes in operating priorities. In 2020, off-premise service moved from convenience to necessity. Drive-thru, delivery, and digital ordering helped absorb demand. After the pandemic, inflation changed the problem. Consumers increasingly asked: Is it worth the price? Is it worth coming back more frequently? In 2023, Restaurant Development became a core growth pillar. This made another point explicit: Future McDonald’s growth would not depend only on comparable sales. New restaurant count would also be a growth engine. Then came Q2 2026. U.S. comparable sales increased only 0.8%. McDonald’s could have interpreted low growth as evidence that the franchise model needed to be rebuilt. It did not. The company continued with approximately 95% franchising. Continued loyalty. Continued digital. Continued value initiatives. Continued restaurant development. The real Turning Point was: When mature-market growth slowed, McDonald’s chose to improve the productivity of the existing system rather than change its ownership logic.

Turning Point

Before vs After

BEFORE

McDonald’s was already far more than a chain of company-operated hamburger restaurants before 2020. Under conventional franchise arrangements, the company generally owns or secures a long-term lease on the restaurant land and building while the franchisee invests in equipment, signs, seating, décor and daily operations. The franchisee pays rent and royalties tied to restaurant sales, plus applicable initial fees. Developmental licensees and affiliates generally assume more capital responsibility while paying royalties. This creates an unusual economic architecture. Restaurant-level operators carry much of the day-to-day labor, food and local operating burden, while McDonald’s Corporation participates through rents, royalties, real-estate economics and system fees. Company-operated restaurants remain important because they give McDonald’s direct operating exposure, but they are a small minority of the total network. Before the pandemic, McDonald’s had already been investing in restaurant modernization, delivery and digital convenience. The strategic value of these investments became obvious in 2020. The business did not need to invent an off-premise system from scratch; it needed to scale and coordinate channels that already existed. **2020:** COVID-19 disrupted dining rooms and normal traffic patterns. Drive-thru, takeaway and delivery became especially important. McDonald’s format was better positioned than many full-service competitors to redirect customer demand into off-premise channels. **2021:** Reopening and consumer mobility supported restaurant demand. Digital ordering and delivery were no longer temporary substitutes; they became part of the normal operating system. The company also benefited from strong comparisons against the disrupted prior year. **2022:** Inflation increased pressure on commodities, labor and household budgets. Pricing could protect restaurant economics, but excessive check growth risked weakening traffic among value-sensitive customers. The strategic tension shifted from access to affordability. **2023:** McDonald’s evolved its Accelerating the Arches strategy. Restaurant Development became an explicit growth pillar, and Accelerating the Organization focused on making the company faster and more efficient. This was an important signal: future growth would depend on both comparable sales and a larger restaurant base. **2024:** Digital engagement, loyalty, menu execution and value remained central. McDonald’s continued building the physical network while expanding loyalty. The operating logic became more integrated: new restaurants increased reach, while digital identity and offers were intended to improve customer frequency. **2025:** Consolidated revenue reached $26.885 billion. Systemwide sales were $139.4 billion. Operating income reached $12.4 billion. McDonald’s opened nearly 2,300 restaurants across the system during the year. At year-end, 43,317 of 45,356 restaurants were franchised. **First half 2026:** Revenue for the six months ended June 30 was $13.616 billion. Q2 revenue was $7.099 billion. U.S. comparable sales were +0.8%, International Operated Markets +1.5%, International Developmental Licensed Markets +1.9%, and total-company comparable sales +1.3%. Across 70 loyalty markets, trailing-twelve-month systemwide sales to loyalty members exceeded $40 billion, while 90-day active loyalty users approached 220 million at quarter-end.

AFTER

The 2025 results demonstrate the scale of the model. Consolidated revenue was $26.885 billion, systemwide sales were $139.4 billion, operating income was $12.4 billion, diluted EPS was $11.95, and cash provided by operations was $10.6 billion. The company reported $7.2 billion of free cash flow and $3.4 billion of capital expenditures. Q2 2026 revenue of $7.099 billion increased 4% on a reported basis and 2% excluding currency translation. Global systemwide sales increased 5% to approximately $37 billion. Q2 comparable sales were +0.8% in the U.S., +1.5% in International Operated Markets, +1.9% in International Developmental Licensed Markets and +1.3% for the total company. These figures are not evidence of hypergrowth. They are evidence that a mature system can continue generating large cash flows while using unit growth and customer engagement to compensate for modest comparable-sales momentum. The first risk is consumer affordability. If average check rises faster than customers’ willingness to pay, positive nominal sales can coexist with weaker guest counts. The second risk is franchisee economics. Promotions can be designed centrally, but franchisees experience local wages, food costs, rent and competitive conditions. Value programs must work for both the customer and the restaurant operator. The third risk is execution complexity. A system with more than 45,000 restaurants cannot change instantly. Technology deployments, restaurant construction, menu changes and service improvements require coordination across franchisees, suppliers and markets. Currency translation also affects reported results. Finally, this case stops at September 12, 2026 and treats Q2 2026 as the latest completed quarterly operating print in scope.

GoGoUp Five Powers

Discover

5/5

★★★★★

Analyze

5/5

★★★★★

Execute

5/5

★★★★★

Decide

5/5

★★★★★

Create

5/5

★★★★★

Discover5/5

McDonald’s recognized that the constraint in mature markets had shifted from channel availability toward customer frequency and value. During the pandemic, the company had already demonstrated that drive-thru, delivery, and digital ordering could absorb off-premise demand. After the pandemic, the key constraint became: Do consumers believe the price is reasonable? Will they keep returning? McDonald’s did not misdiagnose this as failure of the franchise structure. Instead, it placed value, loyalty, and convenience inside the same demand-management system. Restaurant Development continued expanding coverage. This judgment was sustained across multiple years and channels. Therefore, Discover receives a score of 5.

Analyze5/5

The most important analytical discipline in the McDonald’s case is correctly separating systemwide sales from corporate revenue. In 2025: Corporate revenue was $26.885 billion. Systemwide sales were $139.4 billion. The difference is enormous, but both figures are correct. Systemwide sales represent consumer sales across all McDonald’s restaurants. Corporate revenue represents what McDonald’s Corporation recognizes through company-operated sales, rent, royalties, and other revenue. The analysis must also consider: Comparable sales. Restaurant count. Franchise percentage. Franchisee economics. Loyalty scale. Cash flow. Looking only at corporate revenue understates the consumer scale of the system. Treating systemwide sales as corporate revenue seriously overstates accounting revenue. Q2 2026 U.S. comparable sales of +0.8% also cannot describe the whole company by itself. In the same quarter, global systemwide sales were approximately $37 billion, up 5%. These metrics measure different layers of the business. Therefore, Analyze receives a score of 5.

Execute5/5

McDonald’s execution does not depend on one tool. It combines several systems. Drive-thru increases convenience. Delivery expands consumption occasions. Digital ordering reduces transaction friction. Loyalty identifies repeat customers. Value supports frequency. Restaurant Development expands the network. In 2025, the system added nearly 2,300 restaurants. By Q2 2026, trailing-12-month loyalty systemwide sales across 70 markets exceeded $40 billion. 90-day active loyalty users approached 220 million. At the same time, McDonald’s retained its approximately 95% franchised structure. Execution therefore occurred across channels, technology, loyalty, value, franchise coordination, and restaurant development. These systems had already reached observable scale. Therefore, Execute receives a score of 5.

Decide5/5

The key McDonald’s decision was to preserve the highly franchised structure. A would have meant repurchasing large numbers of franchised restaurants. That would return more labor, food, operating, and capital risk to the corporation. It did not happen. C would have meant abandoning digital and delivery. That would sacrifice convenience and customer data already operating at scale. It did not happen. D would have meant stopping U.S. restaurant expansion. That is inconsistent with Restaurant Development remaining a growth pillar. The actual choice was B. Preserve franchise economics. Continue value. Continue loyalty and digital. Continue restaurant development. Management did not rewrite a decades-old capital structure because of one low-single-digit quarter in a mature market. Therefore, Decide receives a score of 5.

Create5/5

What McDonald’s created is not a single digital feature. It is an integrated demand and capital system: Global restaurant network. Franchisee capital. Real estate. Rent and royalties. Digital identity. Loyalty. Drive-thru. Delivery. Value. Restaurant Development. These elements reinforce one another. Franchising means McDonald’s does not need to operate most restaurants directly. Real estate allows the company to participate in restaurant economics. Digital and loyalty provide more direct understanding of customers. Value influences frequency. Restaurant Development expands system coverage. By 2026, this combination was no longer an experiment. An approximately 95% franchise rate, $139.4 billion of 2025 systemwide sales, more than $40 billion of loyalty systemwide sales across 70 markets, and continued restaurant development show that the system operates at global scale. Therefore, Create receives a score of 5.

Key Takeaway
McDonald’s shows: Low comparable-sales growth at a mature franchised company does not automatically mean the business model has failed. At year-end 2025: 45,356 global restaurants. 43,317 franchised. 2,039 company-operated. Approximately 95% franchised. Corporate revenue was $26.885 billion. Systemwide sales were $139.4 billion. Operating income was $12.4 billion. Operating cash flow was $10.6 billion. Free cash flow was $7.2 billion. In Q2 2026: Corporate revenue was $7.099 billion, up 4%. Global systemwide sales were approximately $37 billion, up 5%. U.S. comparable sales were +0.8%. Companywide comparable sales were +1.3%. Across 70 loyalty markets, trailing-12-month loyalty systemwide sales exceeded $40 billion. 90-day active loyalty users approached 220 million. Together, these figures show: The mature U.S. market requires precise management. But the highly franchised system continues generating powerful system economics. The transferable rule is: For a highly franchised company, systemwide sales, corporate revenue, comparable sales, franchise percentage, restaurant development, and franchisee economics must be examined together. Any one metric by itself can misrepresent the business model.

Evidence / Sources

Public Evidence 1: Source / Author: McDonald’s Corporation Material: 2025 Form 10-K / Annual Report, February 24, 2026 Facts supported: 45,356 restaurants worldwide at year-end 2025. 43,317 franchised restaurants. 2,039 company-operated restaurants. Approximately 95% franchised. 2025 corporate revenue of $26.885 billion. Systemwide sales of approximately $139.4 billion. Operating income of $12.4 billion. Operating cash flow of $10.6 billion. Free cash flow of $7.2 billion. Diluted EPS of $11.95. These figures support the conclusion that the highly franchised system continued producing enormous system scale, profitability, and cash flow. Public Evidence 2: Source / Author: McDonald’s Corporation Material: 2025 franchise-revenue and operating-structure disclosures Facts supported: Franchised restaurant revenue was $16.548 billion. Company-operated restaurant sales were $9.690 billion. Other revenue was $647 million. Franchised revenue included: Rent of $10.442 billion. Royalties of $6.018 billion. Initial fees of $88 million. These figures support the distinction between systemwide sales and corporate revenue. Public Evidence 3: Source / Author: McDonald’s Corporation Material: Q2 2026 earnings release and supplemental information, August 4, 2026 Facts supported: Q2 corporate revenue was $7.099 billion, up approximately 4%. Global systemwide sales were approximately $37 billion, up approximately 5%. U.S. comparable sales were +0.8%. International Operated Markets were +1.5%. International Developmental Licensed Markets were +1.9%. Companywide comparable sales were +1.3%. These figures support the conclusion that growth in the mature U.S. market was modest while the global system continued expanding. Public Evidence 4: Source / Author: McDonald’s Corporation Material: Investor-relations and loyalty disclosures available through September 12, 2026 Facts supported: Across 70 loyalty markets, trailing-12-month loyalty systemwide sales exceeded $40 billion. 90-day active loyalty users approached 220 million. Restaurant Development remained an important part of the growth system. Internal Verification Notes: Research cutoff date: September 12, 2026. Year-end 2025 global restaurants: 45,356. Franchised restaurants: 43,317. Company-operated restaurants: 2,039. Franchise rate: approximately 95%. 2025 corporate revenue: $26.885 billion. 2025 systemwide sales: $139.4 billion. Do not describe $139.4 billion as McDonald’s Corporation revenue. Do not describe $26.885 billion as total consumer sales across the McDonald’s system. Franchised restaurant revenue of $16.548 billion is not total consumer sales generated by all franchised restaurants. 2025 operating income: $12.4 billion. Operating cash flow: $10.6 billion. Free cash flow: $7.2 billion. Diluted EPS: $11.95. Q2 2026 corporate revenue: $7.099 billion. Global systemwide sales: approximately $37 billion. U.S. comparable sales: +0.8%. Companywide comparable sales: +1.3%. Do not describe U.S. +0.8% as companywide comparable-sales growth. Do not describe approximately +5% global systemwide-sales growth as U.S. comparable-sales growth. Do not claim that McDonald’s repurchased large numbers of franchised restaurants and shifted toward company operation. Do not claim that McDonald’s exited digital ordering or delivery. Do not claim that McDonald’s stopped U.S. restaurant development. Success in this case means: The highly franchised structure continued operating effectively. Systemwide sales remained enormous. Profit and cash flow remained strong. Loyalty and digital systems reached substantial scale. The restaurant network continued expanding. Success does not mean comparable sales in the mature U.S. market remained at a high growth rate. Q2 U.S. comparable sales of +0.8% must remain visible as a mature-market operating pressure. Expressions such as "improve the system rather than replace the system," "corporate revenue and systemwide sales must remain separate," and "franchisee capital allows McDonald’s to participate in economics far larger than its company-operated estate" are GoGoUp educational analysis based on public operating and financial information. The Discover, Analyze, Execute, Decide, and Create scores and commentary are GoGoUp educational assessments. They are not official ratings provided by McDonald’s Corporation or any cited source. This case is intended for business and entrepreneurship education and does not constitute investment advice.