“We’re very competitive,” she laughs. “It was my idea, but she beat me to it. I order from her branches and pick her up on things. She can’t take it personally, because she’s my sister.”
Sharma previously worked in wealth management, and as a former landlord, boasted a buy-to-let portfolio of six properties. However, she changed tack and became a McDonald’s franchisee in 2022. The branches she now owns and runs are all in and around Southall, west London, where she grew up.
Sharma says: “I grew up around hospitality. My dad owned a snooker and pool club – my sister and I were basically brought up there. Watching my dad have a real passion for his work, which was really sociable, was something I really wanted to emulate.”
Anisha Sharma, here joined by writer Josh Kirby, was a buy-to-let investor before turning to fast food – John Lawrence
McDonald’s was famously described as more a real estate business than a food business by Harry Sonneborn, the company’s first president. Of the roughly 1,400 McDonald’s branches in the UK, around 1,100 are owned and run by franchisees – who pay the fast food chain rent and royalties.
“Buying a franchise gives you the back up of a more established brand like McDonald’s. Things like marketing and promotion, IT systems and processes are set out for you,” says Nicola Crosbie, director at Moran Wealth Management.
Along with massive economies of scale, franchisees benefit from global brand recognition, adds Sharma.
“There’s a nostalgia with the brand. As a child, my parents would get me McDonald’s as a bribe. My husband had his fifth birthday party in one of the stores I own,” she says.
While only some buy-to-let landlords have enough properties to render managing them a full-time job, Carlisle-based franchisee, Henry Trefenko, who owns two McDonald’s branches, is keen to emphasise the scale of the commitment of becoming a franchisee.
“To see significant returns, like any business owner, you need to be truly invested. In buy-to-let, you buy a property with a capital investment, and you manage it or give it to an estate agent to do that. It’s almost handing over the operations to somebody else.
“But McDonald’s is a 24-hour business. Whether a customer is coming in for breakfast or at 10 o’clock at night, I need to make sure that the product is exactly the same. I need to be in and around my business, and take enormous pride in it. And you’ve got to build and lead teams – I employ 205 people.”
“You’re very immersed in it,” adds Sharma. “I’m nosy, I want to be in every part of the business. I certainly didn’t expect to be an expert in drainage and plumbing. The buck stops with you, there is a gravity to the decisions that you make.
“This is not something you invest your money in and walk away from. But it’s been incredibly exciting as a journey – there are so many pinch-me moments that I never had as a buy-to-let landlord.”
Along with the responsibility that comes with running an established business with hundreds of employees, there is a sense of privilege that landlords miss out on, she says.
“We’ve had 16-year-olds come to work here, shy and unsure of themselves, and they go off to an apprenticeship full of confidence. We’ve given them that.”
McDonald’s estimates a typical return on investment over 20 years, the length of a term as a franchisee, at between 20pc and 25pc annually. Though Trefenko claims that with the right attitude and work ethic, higher returns are possible.
He says: “Money is a by-product of success. If you work hard in McDonald’s and believe in and trust the brand, you can’t help but develop a really strong and performing business.”
Those hoping to enter the business must have around £150,000 to invest, or 25pc of the cost of purchasing the franchise rights and equipment. The remaining three quarters can be met with a loan from a bank, several of which McDonald’s has a relationship with, and can therefore provide competitive interest rates.
McDonald’s estimates a first year profit of between £120,000 and £400,000, which will vary depending on a franchise’s size and location. Outgoings include monthly rent, which ranged between 8pc and 18pc of a restaurant’s net sales in 2023.
Franchisees also pay an additional monthly royalty of 5pc of net sales for the use of McDonald’s systems, as well as an additional 4.5pc contribution to the marketing fund.
One of the perks of being a franchisee is getting to choose your hours, says Henry Trefenko, who owns two branches
Aspiring franchisees must apply via the company’s official scheme and attend a franchising event, before undergoing several interviews – including a psychometric assessment – followed by six months’ training.
New franchisees are not just thrown into the deep end, but continue to be helped by the company after the training process is over.
“Early on in your application you’re partnered up with a franchise consultant. Their job is to help me make my business the best it can be,” explains Trefenko.
“There’s a vested interest from the brand in helping you get off to a good start,” says Sharma.
As with being a full-time landlord, owning a McDonald’s franchise comes with the added perks of being your own boss.
“As a family, it’s the best decision we’ve made – I’m able to pick my daughter up from school, go to her sports days,” says Trefenko.
“As a business owner, I want to make sure I’ve created a strong accountable team, which then gives me the opportunities to have a better work-life balance that maybe I wouldn’t have been able to have in the corporate or buy-to-let world.
“It’s absolutely a viable alternative to a buy-to-let investment and one that I would absolutely do again if I had the opportunity.”
“I can decide what my schedule looks like. You can do that as a landlord, but I really love coming into the restaurants,” says Sharma.
However, anybody considering going down the franchising route should consider the tax implications, adds Moran Wealth Management’s Crosbie.
“You need to pay corporation tax on the profits and consider capital gains tax on any business sale, thought you could potentially have the benefit of offsetting “business asset disposal relief” to secure a lower rate of 10pc up to £1m.
“That said, a franchise does give you the option to structure your business in a manner that fits best for you as an owner. For example, a limited company can allow you to manage your own income from the business and boost your own pension savings for the future.”
But for anybody wanting an easier ride, investing in buy-to-let property may be more appropriate than taking on a bustling business, Crosbie adds.
“A buy-to-let potentially has the ability to generate organic investment income with minimal input from you. Once it is set up and a tenant is in place, it should run relatively smoothly.
“You also have the option to engage a letting agent who would manage the property for you.”
Franchisees also take on legal duties to protect their employees from sexual abuse. In January, McDonald’s workers told the BBC they still faced sexual harassment more than a year after its chief executive promised to take action.
The chain has said that, together with its franchisees, it is committed to doing everything it can to ensure a safe working environment for all employees – with initiatives and measures as part of a “cultural action plan”.
“These actions include everything from enhanced training programmes and onboarding practices, through to the launch of a new digital ‘Speak up’ channel designed with our and our franchisees’ restaurant crew in mind,” a spokesman told the BBC.
“We are confident that the plan we have in place is working and making a difference to the near 170,000 people currently employed by McDonald’s and our franchisees across McDonald’s in the UK & Ireland today.”
