Arcos Dorados Holdings Inc. announced on January 2, 2025, the renewal of its Master Franchise Agreement (MFA) with McDonald's, effective January 1, 2025. This new agreement replaces the previous MFA and secures Arcos Dorados' exclusive rights to own, operate, and franchise McDonald's restaurants across 21 countries and territories in Latin America and the Caribbean for the next two decades.
The new MFA includes an option for renewal at McDonald's discretion for an additional 20 years, commencing January 1, 2045. This long-term commitment provides significant stability and continuity for Arcos Dorados' operations and strategic planning in the region.
The updated agreement specifies a royalty fee structure based on gross sales, starting at 6.0% for the first ten years. This rate will adjust to 6.25% for the subsequent five years and 6.5% for the final five years of the agreement, establishing a clear framework for future royalty expenses.
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