Brief
McDonald’s franchisees balk at $800,000 store remodels under new “NEXT” plan
The fast‑food giant’s $8.5 billion “NEXT” overhaul asks franchisees to spend up to $800,000 per outlet, prompting resistance and calls for price negotiations.
By Felo News Desk · Published
McDonald’s is asking its franchisees to fund $800,000 remodels at more than 46,000 U.S. restaurants as part of an $8.5 billion “NEXT” turnaround plan, according to Bloomberg and reported by The Independent.
What happened
The “NEXT” initiative, introduced by CEO Chris Kempczinski in June, targets technology, kitchen, operations and design upgrades. Franchisees would not have to pay the full amount up front; CFO Ian Borden said the investments will be phased over time as capabilities are deployed.
What the reports add
Bloomberg noted that franchisees are questioning the lack of detail on the project’s cost‑benefit analysis. Guggenheim Securities analyst Gregory Francfort suggested franchisees might try to negotiate a 20‑40 percent reduction in the price tag. The Independent added that a prototype tour scheduled for the coming months has been delayed to next year to focus on immediate customer concerns.
What was said
Ian Borden told The Independent, “Importantly, those investments will be phased over time, so franchisees can invest progressively as capabilities are deployed and benefits are realized.” Gregory Francfort told Bloomberg, “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.”
How it came about
The remodel push follows a period of declining U.S. visits and a 32 % share drop since February, as detailed in Felo’s earlier coverage of McDonald’s sales slump. The chain has also faced a lawsuit over its AI pricing tool, which it says only offers suggestions to franchisees.
Key facts
- McDonald’s “NEXT” plan calls for $800,000 remodels at over 46,000 U.S. restaurants. (independent.co.uk)
- CEO Chris Kempczinski introduced the plan in June as part of an $8.5 billion turnaround strategy. (independent.co.uk)
- CFO Ian Borden said the investment will be phased over time, not required up front. (independent.co.uk)
- Analyst Gregory Francfort expects franchisees may seek a 20‑40 percent price reduction. (independent.co.uk)
- A prototype store tour has been postponed to next year. (independent.co.uk)
Sources
- [1] independent.co.uk — originally reported as “McDonald’s franchisees are fighting back after the burger giant pushes big change”
