McDonald’s is poised to earn some profit from its $5 meal deal, although the margins will be modest. According to restaurant analyst Mark Kalinowski, the combo meal is expected to yield a profit margin between 1% and 5%, translating to approximately $0.05 to $0.25 for each bundle sold.
Kalinowski noted that this initiative is aimed at attracting inflation-weary customers back into the restaurants, hoping to entice them to purchase more than just the $5 meal. However, profitability will largely depend on various factors, including ingredient costs, labor, and overhead expenses.
Arlene Spiegel, president of Arlene Spiegel & Associates, indicated that the $5 meal deal is “more promotional than profitable.” While the meal might help draw customers into the restaurant, it does not guarantee that franchise owners will benefit from those profits.
With around 95% of McDonald’s locations being franchise-owned, individual owners determine their own pricing and face additional expenses such as rent, insurance, permits, and taxes. In May, Joe Erlinger, McDonald’s U.S. president, mentioned that franchisees often implement promotional deals like the $5 meal to manage these overhead costs.
However, Spiegel cautioned that the bundle serves primarily as a “loss leader” to attract and reacquire customers. Once all costs—including labor, packaging, condiments, delivery fees, and marketing—are considered, franchise owners essentially eliminate any potential profit from the deal.