The new agreement is expected to include a gross sales royalty of 6.0% for the first ten years, 6.25% for the next five years and 6.5% for the last five years.

Arcos Dorados, the main McDonald's operator in Latin America and the Caribbean, has informed McDonald's that it will exercise the option to renew the master franchise agreement (MFA) with the restaurant chain for a period of 20 years, until 2045.

In addition, the new agreement is expected to include a gross sales royalty of 6.0% for the first ten years, 6.25% for the next five years and 6.5% for the last five years.

The company received a notice from McDonald's on August 1 urging it to renew the contract and replace the existing agreement between the parties with a new 20-year agreement, which will take effect on January 1, 2025.

On September 30, 2024, and in accordance with the MFA's current renewal procedures, Arcos Dorados notified McDonald's of its intention to exercise its renewal option.

The parties are now working to finalize the new agreement. Following the signing, the new agreement is expected to include an option to renew for a new 20-year contract, starting on January 1, 2045.

"Arcos Dorados and McDonald's share the belief that the company's 20 countries and territories present significant growth opportunities," the two companies said in a statement.

In line with this vision, Arcos Dorados expects to open approximately 90 to 100 restaurants by 2025. Additional progress will be communicated as appropriate and in line with the requirements of the United States Securities and Exchange Commission.