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McDonald's French Fry: Suit Fights Soaring Rent

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Bloomberg News

Published: May 21, 2008

McDonald's Corp., a symbol for the spread of U.S. culture around the world, has found common cause with French cinemas and brasseries.

The fast-food chain is suing its landlord to avoid being priced off Paris' Champs-Elysees after the rent for its outlet on "the world's most beautiful avenue" doubled in five years. The restaurant serves 1.5 million meals a year, making it one of McDonald's top venues in France.

"We don't want to leave the Champs-Elysees," said Sebastien Perochain, spokesman for the Oak Brook, Ill.-based company's French unit. "It's a very prestigious location. But the rise in rent has been spectacular."

Surging rent risks putting an end to affordable dining and nightlife on the 1.6-mile avenue that stretches from the Arc de Triomphe to the Place de la Concorde. The Champs-Elysees is the world's third-most expensive commercial property location, after New York's Fifth Avenue and Hong Kong's Causeway Bay, according to Cushman & Wakefield Inc.

Average annual rent on the Champs-Elysees is 7,364 euros ($11,415) per square meter, compared with 11,983 euros on Fifth Avenue and 9,688 euros on Causeway Bay, the real-estate broker said in a November report.

Perochain declined to disclose what McDonald's pays for rent, the name of its landlord or any details on the lawsuit. The restaurant sits on the former site of the 1872 Rothschild mansion. It became home to what the French call "MacDo" in 1988.

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