Franchise Arrangements

12 Months Ended

Dec. 31, 2017

Disclosure Franchise Arrangements Additional Information [Abstract]

Conventional franchise arrangements generally include a lease and a license and provide for payment of initial fees, as well as continuing rent and royalties to the Company based upon a percent of sales with minimum rent payments that parallel the Company’s underlying leases and escalations (on properties that are leased). Under this arrangement, franchisees are granted the right to operate a restaurant using the McDonald’s System and, in most cases, the use of a restaurant facility, generally for a period of 20 years. These franchisees pay related occupancy costs including property taxes, insurance and maintenance. Developmental licensees and affiliates operating under license agreements pay a royalty to the Company based upon a percent of sales, and may pay initial fees.

Revenues from franchised restaurants consisted of:



In millions	2017		2016		2015
Rents	$	6,496.3	$	6,107.6	$	5,860.6
Royalties	3,518.7		3,129.9		2,980.7
Initial fees	86.5		89.4		83.4
Revenues from franchised restaurants	$	10,101.5	$	9,326.9	$	8,924.7

Future gross minimum rent payments due to the Company under existing franchise arrangements are:



In millions	Owned sites			Leased sites		Total
2018		$	1,420.1	$	1,473.4	$	2,893.5
2019		1,389.9		1,423.3		2,813.2
2020		1,353.8		1,352.8		2,706.6
2021		1,306.1		1,271.3		2,577.4
2022		1,253.9		1,187.0		2,440.9
Thereafter		10,841.3		9,488.4		20,329.7
Total minimum payments		$	17,565.1	$	16,196.2	$	33,761.3

At December 31, 2017, net property and equipment under franchise arrangements totaled $16.5 billion (including land of $4.8 billion) after deducting accumulated depreciation and amortization of $9.8 billion.