Arcos Dorados, the restaurant chain that is the largest independent McDonald's franchisee in Latin America and the Caribbean, has announced the renewal of its master franchise agreement (MFA) with the US-based burger giant.

The new 20-year agreement took effect on 1 January 2025, following the expiration of the previous MFA on 31 December 2024. 

The updated MFA outlines a structured royalty fee schedule based on gross sales: 6% for the first ten years, increasing to 6.25% for the next five and reaching 6.5% for the last five.  

McDonald's can renew the agreement for a further 20 years from 1 January 2045.  

Arcos Dorados executive chairman Woods Staton stated: “I am very pleased to have reached an agreement to renew our long-standing and successful relationship with McDonald’s. Arcos Dorados is, by far, the best restaurant operator in Latin America and the Caribbean.  

“We are proud McDonald’s franchisees and, guided by a clear purpose, we have generated strong, long-term shareholder value and made a meaningful, positive impact on the communities where we operate. 

“Over the next 20 years, we will work even harder to consolidate our market leadership in all aspects of our business for the benefit of all our stakeholders.”  

It holds the exclusive right to own, operate and grant franchises for McDonald's restaurants in 20 Latin American and Caribbean countries and territories, with more than 2,400 restaurants operated by the company or its subfranchisees. 

In March 2024, Arcos Dorados reported an attributable net income of $55.8m for the fourth quarter of 2023, an increase of 2.3% compared to the previous year.