McDonald’s may see a modest profit from its $5 meal deal, estimated to be between 1% and 5%, translating to approximately $0.05 to $0.25 per meal combo sold, according to restaurant analyst Mark Kalinowski. This promotion is a strategy to entice inflation-weary customers back into their restaurants, hoping they will purchase more than just the $5 meal option.
However, profitability is contingent on various factors, including the costs of ingredients, labor, and overhead expenses. Arlene Spiegel, president of Arlene Spiegel & Associates, described the meal deal as “more promotional than profitable.” She noted that while the combo may bring diners back, it does not guarantee that franchise owners will see a share of the profits.
With about 95% of McDonald’s restaurants being franchise-owned, franchisees set their own prices and must manage additional expenses such as rent, insurance, permits, and taxes. In May, Joe Erlinger, McDonald’s U.S. president, highlighted that franchisees often use promotions like the $5 meal deal to offset these costs.
Spiegel emphasized that the bundle serves more as a “loss leader” aimed at attracting and retaining customers. Once all the additional expenses like labor, packaging, condiments, delivery fees, and marketing are taken into account, she indicated that franchise owners might end up with little to no profit on the items included in the deal.