A new Master Franchise Agreement runs through 2044.
By Andrew Carlo
Latin America’s largest restaurant chain and the world’s largest independent McDonald’s franchisee is continuing it agreement with the hamburger giant.
Arcos Dorados Holdings Inc. reported today that it has renewed its Master Franchise Agreement (MFA) with McDonald’s.
The new 20-year MFA is effective Jan. 1 replaces a previous MFA, and runs through Dec. 31, 2044.
Also included in the new agreement is another 20-year renewal option, at McDonald’s discretion, that would go into effect on Jan. 1, 2045.
Based in Montevideo, Uruguay, Arcos Dorados operates and grants franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories. The company’s portfolio includes more than 2,400 restaurants, which are operated by the company or by its sub-franchisees. Altogether, Arocas Dorados has more than 100,000 employees.
“I am very pleased to have reached an agreement to renew our long-standing and successful relationship with McDonald’s,” Woods Staton, executive chairman of Arcos Dorados, said in a statement issued by the company. “Arcos Dorados is, by far, the best restaurant operator in Latin America and the Caribbean. We are proud McDonald’s franchisees and, guided by a clear purpose, we have generated strong, long-term shareholder value and made a meaningful, positive impact on the communities where we operate.”
The new MFA includes a royalty fee of gross sales of 6% for the first ten years, 6.25% for the subsequent five years and 6.5% for the final five years.
Arcos Dorados had previously reported that it planned to renew its MFA after receiving approval from McDonald’s on Aug. 1.
“Over the next 20 years, we will work even harder to consolidate our market leadership in all aspects of our business for the benefit of all our stakeholders,” Staton said.
