McDonald’s Corp. is making a new push to get franchisees to upgrade their kitchen equipment, aiming to win back customers with improved fried chicken and higher-end desserts. It won’t be cheap.
The company’s independent operators, who own about 92 percent of the more than 14,000 McDonald’s restaurants in the U.S., may have to shell out about $100,000 per store for new equipment, along with other upgrades like LED lighting, according to internal company documents provided to Bloomberg News. The documents were part of a presentation package sent from corporate headquarters to franchisees this month.
The new costs would be on top of those that are part of the chain’s ongoing Experience of the Future modernization program, which can run as high as $700,000 per restaurant. The corporate office pays 55 percent of the cost of those upgrades. The average U.S. McDonald’s restaurant has annual sales of $2.57 million, according to the research firm Technomic.
The plan may increase tension between McDonald’s and its franchisees, which have a history of occasional strife. The parent company has started shedding mom-and-pop owners in favor of larger operators who can afford pricey renovations and new technology. And a franchisee survey from 2015 showed that McDonald’s owners were pessimistic about the company’s turnaround efforts after a prolonged sales slump, even amid the rollout of all-day breakfast.
Under the new program detailed in the documents, franchisees may have to buy new espresso machines, a baked-goods display case and a cream-and-sugar dispenser…