McDonald’s eventually chose a strategy in Brazil that was somewhat unique for the company. In
2007, McDonald’s sold its businesses in Brazil and thirteen other Latin American countries,
totaling almost 1600 restaurants, to a licensee organization. This arrangement allowed the
company to receive royalties in Brazil rather than operating sales and rents. The licensee group
has agreed to pay monthly royalties at a rate of 5% of gross sales as well as grow the business by
paying fees for opening new restaurants and by committing funds to improve existing ones.
McDonald’s has a twenty-year royalty and fee agreement with the licensee group.