McDonald's released a supersized growth strategy at an investor day in Chicago on Wednesday, with a plan to provide billions in support to franchisees over the next decade.
:quality(75))
With the McDonald's > NEXT strategy, the fast food titan plans to provide $8.5B in partnering support through 2036, including about $5B through 2030, it announced in a release. The plan is designed to bolster restaurant modernization, technology deployment and operational improvements.
"McDonald’s has the unmatched scale, customer insights, brand loyalty, and operational capabilities to not only adapt to the next wave of change in our industry, but to turn it into an advantage,” McDonald’s CEO Chris Kempczinski said in a statement.
Support will come through direct capital and rent relief.
Restaurant > NEXT is one of four pillars of the new growth strategy, centered on simplifying operations, modernizing restaurant design and deploying "ArchIQ," an operating system powered by artificial intelligence.
The company expects efficiency improvements to increase annual cash flow by about $100K for the average U.S. restaurant, with the initiative returning franchisees' investments in roughly four years.
McDonald's is also looking to expand, though it anticipates new store growth to be moderate over the next few years.
In 2027, the company projects that restaurant openings globally will make up 2.5% of systemwide sales growth, according to the release. By 2030, McDonald's expects that number to drop to 2%.
"The financial targets we are introducing today are grounded in the expected economics of Restaurant > NEXT and the opportunities we see ahead," McDonald's Global Chief Financial Officer Ian Borden said in a statement.
McDonald's is looking to reverse a trend of slowing visits to its U.S. restaurants amid years of elevated inflation. The company stated that the average check rose in the second quarter, but domestic restaurant traffic declined.
)
)
)
)
)
)
)
)
)
)
)
)