v2.4.0.6
Franchise Arrangements
 12 Months Ended
Dec. 31, 2011
Franchise Arrangements

Franchise Arrangements

 

 

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. Affiliates and developmental licensees operating under license agreements pay a royalty to the Company based upon a percent of sales, and may pay initial fees.

The results of operations of restaurant businesses purchased and sold in transactions with franchisees were not material either individually or in the aggregate to the consolidated financial statements for periods prior to purchase and sale.

Revenues from franchised restaurants consisted of:

 

 

In millions    2011      2010      2009  

Rents

    $ 5,718.5       $ 5,198.4       $ 4,841.0   

Royalties

      2,929.8         2,579.2         2,379.8   

Initial fees

      64.9         63.7         65.4   

Revenues from franchised restaurants

    $ 8,713.2       $ 7,841.3       $ 7,286.2   

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

 

 

In millions    Owned sites      Leased sites      Total  

2012

    $ 1,277.9       $ 1,147.2       $ 2,425.1   

2013

      1,245.7         1,111.2         2,356.9   

2014

      1,207.2         1,065.3         2,272.5   

2015

      1,150.9         1,005.9         2,156.8   

2016

      1,090.5         946.4         2,036.9   

Thereafter

      8,914.2         7,035.1         15,949.3   

Total minimum payments

    $ 14,886.4       $ 12,311.1       $ 27,197.5   

At December 31, 2011, net property and equipment under franchise arrangements totaled $13.8 billion (including land of $4.0 billion) after deducting accumulated depreciation and amortization of $7.1 billion.