McDonald’s versus Burger King is the oldest rivalry in fast food, but in net lease the two are not really competitors: they sit on opposite sides of the investment grade line and price accordingly. McDonald’s Corporation carries BBB+/Baa1 ratings with stable outlooks and its ground leases traded at a 4.38% average cap rate per the Boulder Group’s Q2 2025 report — near Treasury-adjacent, bond-equivalent pricing. Restaurant Brands International, Burger King’s parent, was upgraded to BB+ by S&P in May 2026 but remains one notch below the cutoff, and Burger King properties trade at 5.50% to 7.00%. That 150 to 250+ basis point spread is the price of the credit, the guarantee mix, and the lease structure — and deciding whether it is worth crossing is the whole question.
This comparison follows the sequence the investment grade guide recommends: rating first, then lease structure, then real estate. The two brands diverge at every step.
Burger King vs McDonald’s: Head-to-Head Comparison
| Metric | McDonald’s | Burger King |
|---|---|---|
| Parent Company | McDonald’s Corporation (MCD) | Restaurant Brands International (QSR) |
| S&P / Moody’s Rating | BBB+ / Baa1 (both stable) | BB+ / Ba3 (both stable, upgraded May 2026) |
| Investment Grade? | Yes — benchmark QSR credit | No — one notch below BBB‑ |
| Global Locations | 40,275 | ~19,600+ across 120+ countries |
| Avg / Range Cap Rate (2026) | 4.38% avg (ground lease, Boulder Q2 2025) | 5.50% – 7.00% |
| Typical Lease Term | 20 years + four 5-year options | 15 – 20 years |
| Escalations | 10% every 5 years (ground leases) | 10% every 5 years or ~1.5% annual |
| Dominant Structure | Absolute NNN ground lease | Fee simple NNN or ground lease |
| Guarantee | Corporate (dominant) or franchisee | Corporate (Burger King Corp) or franchisee |
| Annual Revenue | $25.9B | ~$7B (RBI, four brands) |
Credit Rating: The Benchmark vs the Challenger
McDonald’s is the benchmark QSR credit in net lease. S&P affirmed BBB+ with a stable outlook in April 2025 and Moody’s affirmed Baa1 in July 2025; interest coverage runs comfortably above 8x, and neither agency has taken a negative action in years. Backed by $25.9 billion in revenue and 40,275 global locations, a corporate-guaranteed McDonald’s lease is about as close as net lease gets to a listed bond with a deed attached. The full analysis is on the McDonald’s credit rating and cap rate page.
Burger King’s parent is a genuinely improving high-yield credit. S&P’s May 2026 upgrade to BB+ followed twenty consecutive quarters of comparable sales growth, driven by the $400 million Reclaim the Flame reinvestment program, and Moody’s holds Ba3 stable. S&P has published the gate to investment grade — sustained leverage below 4x against roughly 4.4x expected in 2026 — so the market can watch the gap close in real time. Details are on the Burger King credit rating and cap rate page, and both sit in context in the credit tenant ratings database.
Cap Rates: What 150-250 Basis Points Buys
A McDonald’s ground lease at 4.38% yields roughly what a Treasury did for much of the past year, and the market accepts that because the structure is close to riskless within real estate: the investor owns the land, McDonald’s owns and maintains the building, the lease is absolute NNN with zero landlord obligations, and scheduled 10% bumps every five years provide growth a bond cannot. Corporate-guaranteed fee simple deals trade wider, and rarer franchisee-guaranteed McDonald’s paper wider still.
Burger King’s 5.50% to 7.00% band pays the buyer for three distinct risks: a high-yield (if improving) parent credit, a guarantee mix that skews heavily to franchisees, and real estate that lacks the ground lease dominance of the McDonald’s program. At the tight end, a long-term corporate BK lease at 5.50% offers over 100 bps of spread against McDonald’s ground leases — meaningful if RBI completes its climb to investment grade, at which point that spread should compress.
Lease Structure: Ground Lease Machine vs Guarantee Spectrum
McDonald’s runs the most sophisticated real estate program in QSR. Base terms are 20 years with four 5-year options (40 years of potential control), most deals are absolute NNN ground leases, and the dominant format carries the full corporate guarantee. The diligence trap is the exception: some listings are franchisee-only paper where McDonald’s Corporation has no obligation to the landlord, and those are not comparable investments despite the identical sign.
Burger King writes 15 to 20 year terms with 10% bumps every five years or roughly 1.5% annual escalations, across roughly 7,000 US locations, most of them franchised. Corporate-guaranteed BK deals carry RBI’s BB+/Ba3; franchisee deals carry whatever the operator’s balance sheet supports. The Reclaim the Flame program has improved franchisee profitability, which strengthens the median guarantee, but operator-level underwriting remains mandatory on every deal.
The Bond-to-NNN Pivot
McDonald’s is a major investment grade bond issuer, so the trade is directly comparable: its bonds yield materially less than its own 4.38% ground leases once depreciation, 1031 exchange treatment, and scheduled escalations are counted — the full after-tax math is in McDonald’s Bonds vs NNN Real Estate. Burger King offers no investment grade bond: RBI’s debt is rated high yield, so its NNN leases are the cleanest income instrument on that credit — at cap rates 100-250 bps above where McDonald’s real estate clears.
Verdict: Which Tenant Wins?
They answer different questions. McDonald’s is the capital-preservation answer: the strongest credit in QSR, the best lease structure in net lease, and pricing that reflects both. A buyer completing a 1031 exchange who needs certainty for 20+ years buys the McDonald’s ground lease and accepts the 4s.
Burger King is the yield-with-a-catalyst answer. At 5.50% to 7.00%, a well-underwritten corporate or strong-franchisee BK deal pays 150-250 bps more while S&P’s upgrade path gives the credit visible room to improve. If RBI crosses back above BBB‑, today’s wide-end buyers will have bought a compressing cap rate. The risk is that turnarounds stall; the reward is that this one has twenty quarters of evidence behind it. Income certainty buys McDonald’s; total return with credit momentum buys Burger King.
Burger King vs McDonald’s: Frequently Asked Questions
Is Burger King or McDonald’s a better NNN investment?
McDonald’s is the stronger credit and structure: BBB+/Baa1 ratings, absolute NNN ground leases, and 4.38% average cap rates. Burger King (RBI, BB+/Ba3) pays 5.50% to 7.00% — 150-250 bps more — with an improving credit trajectory. Certainty favors McDonald’s; yield plus upgrade potential favors Burger King.
Why are McDonald’s cap rates so much lower than Burger King’s?
Three reasons: McDonald’s carries investment grade BBB+/Baa1 ratings while RBI is high yield at BB+/Ba3; McDonald’s deals are predominantly corporate-guaranteed absolute NNN ground leases while Burger King listings skew franchisee-guaranteed; and McDonald’s 20-year base terms with four 5-year options offer longer control. The market prices all three differences into the spread.
Is Burger King’s parent company investment grade?
Not yet. Restaurant Brands International was upgraded to BB+ by S&P in May 2026 and carries Ba3 from Moody’s — one notch below the BBB‑/Baa3 cutoff on the S&P scale. S&P has said a further upgrade requires sustained leverage below 4x, versus roughly 4.4x expected in 2026.
What is a McDonald’s ground lease and why does it trade at a 4.38% cap rate?
The investor owns the land while McDonald’s owns, maintains, and insures the building, paying rent under an absolute NNN lease with 10% increases every five years over a 20-year base term. With BBB+/Baa1 corporate backing and zero landlord obligations, the market prices it as a bond-equivalent — hence the 4.38% average in the Boulder Group’s Q2 2025 report.
Should I buy McDonald’s bonds or a McDonald’s NNN property?
The NNN property generally wins after tax for long-term holders: depreciation shelters income, 1031 exchange treatment defers gains, scheduled escalations grow rent, and the land has residual value — none of which a bond offers. Bonds win on liquidity and zero management. The full comparison is on our McDonald’s bonds vs NNN analysis.
Deciding between the benchmark credit and the higher-yield challenger? Our team tracks cap rates, credit changes, and live inventory across every major QSR NNN tenant. Request a buyer consultation and we will model both sides for your exchange timeline.
