The future of McDonald’s appears to be an expensive one — and some store owners aren’t happy about it.
The fast-food giant is asking its franchisees to complete $800,000 remodels of more than 46,000 restaurants as part of an $8.5 billion turnaround strategy, according to Bloomberg. The plan, dubbed “NEXT” was introduced by CEO Chris Kempczinski in June as a way to increase productivity and expand the brand.
The updates will make changes to stores’ technology, kitchens, operations and design elements.
Franchisees are pushing back, questioning the initiative’s lack of details about the project and its cost, Bloomberg reported.
“Our suspicion is that franchisees will look to negotiate the price tag down ~20-40 percent as they accept certain elements of the plan and push back on others,” Guggenheim Securities analyst Gregory Francfort said, according to Bloomberg.
When asked about franchisee pushback, McDonald’s directed The Independent to comments from CFO Ian Borden at the company’s recent investor day. McDonald’s has set funds aside to help some restaurants with the improvements, according to Bloomberg.
Franchisees will not be required to pay for the updates all at once, Borden said.
“Importantly, those investments will be phased over time,” he said. “So franchisees can invest progressively as capabilities are deployed and benefits are realized.”
Franchisees were slated to tour a prototype of the new stores in the coming months, according to Bloomberg. However, those plans were delayed to next year to focus on immediate customer concerns.
Restaurant operators have said they worry about taking on debt for the improvements and want more details on how it will boost sales, according to Bloomberg.
Yet the cost of store updates is only part of an outcry over McDonald’s attempts to improve its operations. The company faces a lawsuit filed in October by a customer who claimed it used AI to set prices across franchises.
The company denies the allegations, saying AI pricing is only a suggestion for franchisees and that each store sets its own prices and doesn't coordinate with other stores to fix prices.
The hurdles McDonald’s faces come in a wider context in which the brand, like other fast-food chains, is searching for ways to bring back customers and remain profitable.
Affordable menu items have been a focus at the Golden Arches for the past two years. In 2024, it launched $5 value meals that include a sandwich, chicken nuggets, fries and a drink.
In August, it debuted an “Under $3” menu that offers at least 10 menu items under $3 throughout the day.
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