Arcos Dorados Renews McDonald's Franchise Agreement

TL;DR

Arcos Dorados just locked in its McDonald's franchise for years to come, good news for investors.

AI Summary

Arcos Dorados Holdings Inc. announced on October 1, 2024, that it has exercised its option to renew its Master Franchise Agreement with McDonald's. This renewal extends their partnership, allowing Arcos Dorados to continue operating McDonald's restaurants in Latin America and the Caribbean.

Why It Matters

This renewal secures Arcos Dorados' long-term operating rights for McDonald's in a significant geographic region, providing stability for investors and continued brand presence for consumers.

Risk Assessment

Risk Level: low — The filing is a routine renewal of an existing agreement, indicating no new or significant risks.

Key Players & Entities

• Arcos Dorados Holdings Inc. (company) — Registrant and franchisee
• McDonald's (company) — Franchisor
• Juan David Bastidas (person) — Chief Legal Counsel signing the report
• October 1, 2024 (date) — Date of press release and filing

FAQ

Filing Documents

• dp218706_6k.htm (6-K) — 26KB
• image_001.jpg (GRAPHIC) — 1KB
• image_002.jpg (GRAPHIC) — 2KB
• image_003.jpg (GRAPHIC) — 2KB
• image_004.jpg (GRAPHIC) — 2KB
• 0000950103-24-014292.txt ( ) — 35KB

From the Filing

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of October, 2024 Commission File Number: 001-35129 Arcos Dorados Holdings Inc. (Exact name of registrant as specified in its charter) Río Negro 1338, First Floor Montevideo, Uruguay, 11100 (Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F X Form 40-F ARCOS DORADOS HOLDINGS INC. TABLE OF CONTENTS ITEM 1. Press Release dated October 1, 2024 titled “Arcos Dorados Exercises Renewal Option for its Master Franchise Agreement with McDonald’s” SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Arcos Dorados Holdings Inc. By: /s/ Juan David Bastidas Name: Juan David Bastidas Title: Chief Legal Counsel Date: October 1, 2024 Item 1 ARCOS DORADOS EXERCISES RENEWAL OPTION FOR ITS MASTER FRANCHISE AGREEMENT WITH MCDONALD’S Montevideo, Uruguay, October 1, 2024 – Arcos Dorados Holdings Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”), Latin America’s largest restaurant chain and the world’s largest independent McDonald’s franchisee, notified McDonald’s (NYSE: MCD) that it will exercise its option to renew its Master Franchise Agreement (“MFA”) with McDonald’s. As previously disclosed, Arcos Dorados received a Renewal Notice from McDonald’s, on August 1, 2024, to replace the parties’ existing MFA with a new, 20-year MFA, to be effective as of January 1, 2025. On September 30, 2024, and in line with the current MFA’s renewal procedures, Arcos Dorados provided notice to McDonald’s of its intention to exercise its Renewal Option. The parties are now working to finalize the new MFA agreement. Upon signing, the new MFA agreement is expected to include a Renewal Option for a new, 20-year MFA, beginning January 1, 2045. Additionally, the new agreement is expected to include a royalty of Gross Sales of 6.0% for the first ten years, 6.25% for the subsequent five years and 6.5% for the final five years. Arcos Dorados and McDonald’s share in the belief that the Company’s 20 countries and territories present significant opportunities for growth. In line with this view, the Company expects to open approximately 90 to 100 restaurants in 2025. Arcos Dorados will communicate additional progress as appropriate and in line with the requirements of the US Securities and Exchange Commission. Investor Relations Contact Media Contact Dan Schleiniger David Grinberg VP of Investor Relations VP of Corporate Communications Arcos Dorados Arcos Dorados daniel.schleiniger@mcd.com.uy david.grinberg@mcd.com.uy Follow us on: 1 About Arcos Dorados Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories with almost 2,400 restaurants, operated by the Company or by its sub-franchisees, that together employ more than 100 thousand people (as of 06/30/2024). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: www.arcosdorados.com/ir . Cautionary Statement on Forward-Looking This press release contains forward-looking statements. The forward-looking statements contained herein include statements about the Company’s business prospects, its ability to attract customers, its expectation for revenue generation, its outlook and guidance for 2025 and the renewal of its Master Franchise Agreement with McDonald’s. These statements are subject to the general risks inherent in Arcos Dorados’ business. These expectations may or may not be realized. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, Arcos Dorados’ business and operations involve numerous risks and uncertainties, many of which are beyond the control of Arcos Dorados, which could result in Arcos Dorados’ expectations not being realized or otherwise materially affect the financial condition, results of operations and

View Full Filing

View this 6-K filing on SEC EDGAR