Franchise Arrangements

12 Months Ended

Dec. 31, 2018

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. Minimum rent payments are based on the Company's underlying investment in owned sites and parallel the Company’s underlying leases and escalations on properties that are leased. Under the franchise 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 site 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	2018		2017		2016
Rents	$	7,082.2	$	6,496.3	$	6,107.6
Royalties	3,886.3		3,518.7		3,129.9
Initial fees	44.0		86.5		89.4
Revenues from franchised restaurants	$	11,012.5	$	10,101.5	$	9,326.9

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



In millions	Owned sites			Leased sites		Total
2019		$	1,452.3	$	1,509.4	$	2,961.7
2020		1,417.1		1,438.5		2,855.6
2021		1,374.0		1,360.3		2,734.3
2022		1,322.8		1,275.0		2,597.8
2023		1,275.5		1,205.9		2,481.4
Thereafter		11,116.4		9,680.1		20,796.5
Total minimum payments		$	17,958.1	$	16,469.2	$	34,427.3

At December 31, 2018, net property and equipment under franchise arrangements totaled $17.8 billion (including land of $4.9 billion) after deducting accumulated depreciation and amortization of $10.4 billion.