McDonald’s is the gold standard of QSR NNN. 13,706 US restaurants, BBB+/Baa1 investment-grade credit, $3.9M median franchisee AUV — and 2025 was the biggest US expansion year since 2002 with 149 net new openings. NNN ground leases trade 3.75-4.50% — among the tightest cap rates in net lease. McDonald’s owns the land at most franchisee sites, making it both operator AND landlord across its system.

Pros:

• High credit (BBB+/Baa1) — gold standard QSR investment-grade tenant
• Increases in primary term (10% every 5 years standard)
• Low price point relative to other QSR brands
• Corporate owns land at most franchisee sites — MCD Corp is the direct rent payer

Cons:

• Low cap rates (3.75-4.50%) — tightest in QSR
• Newer leases flat for first 10 years
• Ground leases don’t allow depreciation
• Q1 2025 -3.6% SSS scare — worst quarter since pandemic

McDonald’s Corporation remains the dominant brand in the QSR space and the gold standard of NNN credit. With over 41,800 restaurants globally and 13,706 in the US at year-end 2025, McDonald’s offers primary, secondary, and tertiary market locations that provide a strategic competitive advantage as well as varying risk/return profiles for net lease property buyers. Brand recognition, operating stability, and BBB+/Baa1 investment-grade credit ratings reinforce McDonald’s standing as a prime net lease investment property.

McDonald’s remains the best example of a flight-to-quality in net lease investing. As cap rates have adjusted across the board for all net lease investments, McDonald’s assets continue to attract multiple buyers and trade at a significant premium over other properties. This aggressive pricing is a result of the high credit of the tenant, overall lease terms, and general lack of supply in the marketplace. While McDonald’s franchises approximately 95% of locations, when leasing a location it almost exclusively selects sites and guarantees leases on a corporate level — meaning the typical NNN landlord receives direct McDonald’s Corporation rent rather than franchisee guarantee.

The Golden Arches have long been a business school case study of a real estate business that happens to sell hamburgers. McDonald’s prefers to purchase the real estate of its restaurants rather than lease — a strategy that has created a structural lack of supply in the net lease market. When McDonald’s does lease, it is almost exclusively through ground leases of 20-year primary terms with 3 to 5 renewal options of five years each. Historically the brand offered rental increases of 10-15% every five years, but recent leases have scaled back to 10% and many new ground leases are flat for the first 10 years. McDonald’s targets 0.75-1.25 acres with premier access and visibility.

While McDonald’s has used its strength to negotiate lower rental rates, those rates have translated into easier rents to replace in the unlikely event of vacancy. That scenario is viewed as extremely unlikely given the brand’s investment-grade credit and significant financial investment per location — paying for the construction of its own structure on each pad. Median franchisee AUV in 2025 was $3.887 million; corporate units averaged $4.871 million; the top-performing location generated $10.56 million. Rent-to-sales ratio at approximately 2.58% gives the system substantial cushion at renewal.

McDonald’s added 149 net new US restaurants in 2025 — the largest US expansion since 2002 — and is on a long-term plan to open 900 new US locations by end of 2027 and reach 50,000 global restaurants by 2027. The 2025 SSS picture: Q4 2024 +6.8% (best quarter since Q3 2023), Q1 2025 -3.6% (worst since pandemic on low-income consumer pullback), Q3 2025 recovery to +2.4%, full year +2.1%. The McValue menu and permanent $5 Meal Deal launched January 2025 drove the recovery. For NNN: properties trade at premium pricing because the credit and lease structure are unmatched.