TacticScaleWhat McDonald's Does & How It Makes Money (MCD)
Updated October 2026 · reflects McDonald's's latest reported financials
World's best-known fast-food burger restaurant chain and franchisor. It earns money from food and drink sales at restaurants it runs itself.
How McDonald's makes money
It earns money from food and drink sales at restaurants it runs itself. It also collects fees from franchisees, developmental licensees and affiliates who operate restaurants under the McDonald's brand.
What McDonald's does
McDonald's Corporation owns, operates and franchises McDonald's restaurants in the United States and internationally. The menu centers on hamburgers and cheeseburgers, chicken sandwiches and fries. It also sells shakes, frozen desserts, sundaes, soft serve cones, cookies, pies, coffee, soft drinks and full or limited breakfast, and runs limited-time promotional items to bring in customers. Most of its restaurants are run by other operators under conventional franchise, developmental license or affiliate arrangements, while the company runs some locations itself. The company was founded in 1940 and is based in Chicago, Illinois. It sits in the consumer cyclical sector's restaurant industry.
Products & services
- Hamburgers & cheeseburgers
- Chicken sandwiches
- French fries
- Shakes, sundaes & soft serve
- Coffee & beverages
- Breakfast menu
What is McDonald's worth?
On an owner-earnings DCF, McDonald's's most-likely value is about $158 versus a recent price near $235 (33% above fair value). But TacticScale only calls a stock undervalued when the price sits below its conservative no-growth floor (~$89) with a margin of safety — so the honest verdict here is “Fairly priced — no edge.” Fair value earns its keep only at the extremes, not in the wide middle.
Price sits in the normal range — fair value isn't actionable here; it earns its keep only when price drops below the no-growth floor, or runs to roughly double the optimistic case.
⚠ High leverage — net debt is 6.8× annual cash flow. Net debt is subtracted from this fair value, but refinancing at higher rates, principal timing, and share dilution aren’t modeled — the equity can be worth far less if cash flow weakens.
Analysis, not advice. Fair value is a margin-of-safety estimate from a deterministic owner-earnings DCF, not a price target or recommendation. See the full breakdown →
Related companies
The Wendy's (WEN) · Shake Shack (SHAK) · Yum! Brands (YUM) · Domino's Pizza (DPZ) · Chipotle Mexican Grill (CMG)