McDonald's vs Subway: Revenue, Profit and Business Model
McDonald's reported $26.9B of revenue in FY2025 and $8.6B of net income. Subway reported $925M of revenue in FY2025 and $689M of net income.
Latest financial snapshot
McDonald's
- Latest revenue
- $26.9B (FY2025)
- Net income
- $8.6B
- Net margin
- 31.9%
- Revenue growth
- +1.0% a year, FY2016–FY2025
Subway
- Latest revenue
- $925M (FY2025)
- Net income
- $689M
- Net margin
- 74.5%
- Revenue growth
- -2.4% a year, FY2023–FY2025
Financial summary
McDonald's
McDonald's corporate revenue ($26.885 billion in 2025, up 3.7%) is a fraction of the roughly $139 billion that customers spend across the system, because franchised restaurant sales are not booked as company revenue. What the company does book is mostly franchise rent and royalties, which explains net income of $8.563 billion in 2025 and operating margins well above typical restaurant operators. In Q2 2026, revenue rose 4% (2% in constant currency) to about $7.1 billion, diluted EPS was $3.32 ($3.38 adjusted), and systemwide sales grew 5% to $37 billion. The company returns most free cash flow through dividends, which it has raised every year since 1976, and share buybacks.
Subway
Subway publishes no annual report; its numbers come from franchise disclosure documents. The 2026 FDD shows $925 million of revenue and $689 million of net income in 2025, against $972 million and $15.4 million in 2023. Net income was $397 million in 2024. Royalty revenue fell about 10% over those two years, but vendor rebates rose to $136.5 million, limiting the total revenue decline to 4.8%. Roark financed the buyout partly with two whole-business securitizations, leaving about $5.7 billion of debt on the books at the end of 2025.
Revenue and profit by year
McDonald's
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $26.9B | $8.6B | 31.9% | +3.7% | Source |
| FY2024 | $25.9B | $8.2B | 31.7% | +1.7% | Source |
| FY2023 | $25.5B | $8.5B | 33.2% | +10.0% | Source |
| FY2022 | $23.2B | $6.2B | 26.6% | -0.2% | Source |
| FY2021 | $23.2B | $7.5B | 32.5% | +20.9% | Source |
| FY2020 | $19.2B | $4.7B | 24.6% | -10.1% | Source |
| FY2019 | $21.4B | $6B | 28.2% | +0.5% | Source |
| FY2018 | $21.3B | $5.9B | 27.9% | -6.8% | Source |
| FY2017 | $22.8B | $5.2B | 22.8% | -7.3% | Source |
| FY2016 | $24.6B | $4.7B | 19.0% | — | Source |
Subway
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $925M | $689M | 74.5% | — | Source |
| FY2023 | $972M | $15.4M | 1.6% | — | Source |
Where the revenue comes from
McDonald's
- Franchise rent and royalties~45%
Franchise rent and royalties
- Company-operated restaurants~25%
Company-operated restaurants
- Licensing and delivery economics~15%
Licensing and delivery economics
Subway
- Franchise Royalties and FeesMajority
Royalties of 8% or 10% of franchisee sales plus upfront franchise fees; franchise revenue was $767 million in 2025, down more than 6%.
- Vendor Rebates
14.8% (2025)
Rebates from suppliers in Subway's supply chain, $136.5 million in 2025 versus $44.7 million in 2021.
- International Master Franchise Fees
Not disclosed
Fees from master franchisees that hold development rights for whole countries or regions.
Business model and strategy
McDonald's
How it makes money
About 95% of McDonald's restaurants are owned and operated by franchisees or developmental licensees. The corporation makes money in three main ways: (1) rent, because it owns or leases the land and buildings at many franchised sites and charges franchisees rent, often tied to a percentage of sales; (2) royalties, a percentage of each restaurant's monthly sales;
Growth strategy
McDonald's growth plan, branded Accelerating the Arches, rests on marketing, core menu (burgers, chicken, coffee), and the 3 D's: digital, delivery, and drive-thru. The company targets roughly 50,000 restaurants worldwide by the end of 2027, with China, other developmental licensed markets, and the U.S. contributing the largest number of openings.
Competitive advantage
McDonald's advantage is scale that rivals cannot easily copy: more than 45,000 restaurants, control of prime real estate at many franchised sites, a long-tenured franchisee base that funds most store capital, and a supply chain that buys beef, potatoes, chicken, and packaging at volumes few chains match.
Subway
How it makes money
Subway owns no restaurants. Franchisees pay an upfront franchise fee plus a royalty of 8% or 10% of sales depending on their agreement, along with an advertising fund contribution. Subway also collects vendor rebates through its supply chain, which reached $136.5 million in 2025, or 14.8% of revenue, up from $44.7 million (5.4%) in 2021.
Growth strategy
Under CEO Jonathan Fitzpatrick, Subway is focused on franchisee profitability and value. Steps since mid-2025 include a one-time cash rebate to franchisees based on first-half 2025 sales, three new regional presidents, a regional marketing structure that replaced the global CMO role in 2026, a relaunched Sub Club loyalty program, and an April 2026 value menu.
Competitive advantage
Subway's main advantage is reach and low build cost. A store needs no fryers or exhaust hoods, so it can open in spaces too small for a burger chain, and its brand is known in more than 100 countries. That same density is now a weakness in the U.S., where many units sit close together and average about $500,000 in annual sales, well below rivals such as Jersey Mike's.
Questions about McDonald's vs Subway
Which company has higher revenue — McDonald's Corporation or Subway?
McDonald's Corporation reported $26.9B (FY2025), while Subway reported $925.0M (FY2025). By last reported revenue, McDonald's Corporation is the larger business, with Subway reporting a smaller revenue base.
What is the market cap of McDonald's Corporation vs Subway?
McDonald's Corporation has a market capitalisation of $175.7B. A public market cap figure for Subway was not available (it may be privately held).
Which is more financially efficient — McDonald's Corporation or Subway?
McDonald's Corporation generates $179k / employee in revenue per employee, while Subway generates $463k / employee. Subway shows higher revenue efficiency per headcount, though this reflects business model differences — capital-light software companies routinely outperform labour-intensive manufacturers on this metric.
How do McDonald's Corporation and Subway make money?
McDonald's Corporation and Subway generate revenue in fundamentally different ways. McDonald's Corporation: About 95% of McDonald's restaurants are owned and operated by franchisees or developmental licensees. Subway: Subway owns no restaurants.
Is McDonald's Corporation bigger than Subway?
By last reported revenue, McDonald's Corporation ($26.9B (FY2025)) is the larger company compared to Subway ($925.0M (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the McDonald's vs Subway overview