McDonald's Franchisees in Wales: A Financial Profile of the Fast Food Giants
McDonald's franchisees in Wales have shown resilience in the face of economic challenges, with several operators reporting significant turnover and adapting to changing market conditions. This article provides a comprehensive profile of McDonald's franchisees in Wales, examining their revenues, profits, revenue per site, and staff numbers.
Lonetree: South Wales Powerhouse
Lonetree, a major McDonald's franchisee in South Wales, operates 16 sites and has demonstrated strong financial performance:
Turnover: £71,353,561 in 2023 (8% increase from 2022)
Pre-tax profit: £1,074,063 in 2023 (up from £418,484 in 2022)
Gross profit margin: 63.55% (slightly down from 63.61% in 2022)
Dividend paid: £1,841,000 in 2023 (down from £3,180,000 in 2022)
Net assets: £6.52 million in 2023
Key takeaway:
Lonetree has shown impressive growth despite macroeconomic challenges, maintaining a healthy financial position.
Yash: South Wales Challenger
Yash, operating five restaurants in South Wales, faced more significant challenges:
Turnover: £23,079,017 in 2022 (slight decrease from £23,534,487 in 2021)
Pre-tax profit: -£235,153 in 2022 (down from £1,619,570 profit in 2021)
Gross profit margin: 63.59% (down from 66.55% in 2021)
Dividend paid: £396,000 in 2022 (up from £204,000 in 2021)
Net assets: £1.42 million in 2022 (down from £2 million in 2021)
Key takeaway:
Yash experienced a challenging year due to increased VAT, supply chain volatility, and rising costs.
Revenue Per Site Analysis
While specific data for all Welsh franchisees is not available, we can estimate revenue per site based on the provided information:
Lonetree: Approximately £4.46 million per site (£71.35 million / 16 sites)
Yash: Approximately £4.62 million per site (£23.08 million / 5 sites)
These figures align with the broader UK trend, where average sales per McDonald's store were around £4.5 million.
Staff Numbers and Employment Impact
McDonald's franchisees are significant employers in Wales:
HJL Restaurants (operating in neighboring Worcestershire and Hereford) employs around 370 staff across four restaurants, suggesting an average of 92-93 employees per site.
Extrapolating this to Welsh franchisees:
Lonetree: Potentially employing around 1,480-1,500 staff across 16 sites
Yash: Potentially employing around 460-465 staff across 5 sites
Challenges and Adaptations
Welsh McDonald's franchisees face several challenges:
Increased VAT rates affecting profitability
Rising operational costs, including food, labor, and utilities
Supply chain volatility
Inflationary pressures
To combat these challenges, franchisees have implemented strategies such as:
Incremental price rises
Focus on delivery sales growth
Menu and marketing strategy adjustments
Future Outlook
Despite current challenges, McDonald's franchisees in Wales show resilience:
Continued investment in existing sites
Exploration of new locations and potential acquisitions
Adaptation to changing consumer preferences, particularly in delivery services
Focus on operational efficiencies to manage costs
Conclusion
McDonald's franchisees in Wales demonstrate the complex nature of operating in the current economic climate. While some, like Lonetree, have managed to grow their turnover and maintain profitability, others like Yash have faced more significant hurdles. The average revenue per site aligns with UK-wide trends, highlighting the continued importance of McDonald's in the fast food sector. Looking ahead, Welsh franchisees will need to remain agile in adapting to economic conditions while ensuring continued profitability and operational efficiency.