- McDonald's US franchise restaurants have reached record average cash flows, it said Thursday.
- Average cash flows exceeded $500,000 per unit — an increase of $125,000 in the past year alone.
- McDonald's total annual revenues reached $23.2 billion due to higher prices and bigger orders.
McDonald's US franchise restaurants have reached record average cash flows amid soaring sales at the burger chain, it said Thursday.
Cash flows for its US franchisees reached an average of more than $500,000 per unit, CFO Kevin Ozan said at McDonald's fourth-quarter earnings call.
This represents a growth of 50% over the past three years, and an increase of $125,000 in the past year alone, Ozan said.
It's not just US franchisees who saw soaring cash flows. McDonald's CEO Christopher Kempczinski said that franchisee cash flows "hit all-time highs in most of our top markets," including the UK, Canada, Germany, and Japan.
The company's total revenues reached $23.2 billion in the year to December 31, a rise of 21% year-on-year, with a slightly higher increase in sales at franchisee restaurants than at company-owned ones.
Part of the rise in sales stemmed from a growth in the average order size and increases in menu prices, which Ozan said ended up being around 6% over the year.
"With strong average unit volumes and restaurant cash flows, the company and our franchisees are well-positioned to withstand the pressures ahead," Kempczinski said.
This includes expectations that food and paper costs in the US will grow by around 8% in 2022 — double the rate of inflation in 2021, Ozan said.
Like other restaurant chains, McDonald's was hit by a combination of soaring ingredients prices and rising staffing costs in 2021 as a labor shortage wreaked havoc on both the global supply chain and the ability to staff restaurants.
