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McDonald’s Slows Pace of Remodels Amid Reports of Franchisee Tension

Your local McDonald’s may be remodeling soon, but Operators are stressed about the cost, the timeline, and a decrease in sales during down times. Let’s see what McDonald’s is doing to alleviate their concerns…

Photo Courtesy of NRN.

McDonald’s has pushed back the 2020 deadline for remodeling 14,000 U.S. locations amid reports that the ambitious pace is stressing operators.

McDonald’s said franchisees have until 2022 to convert restaurants to the Experience of the Future model, but taking advantage of the two-year extension will come at a price for operators.

For stores completed by 2020, McDonald’s will continue to pay 55 percent of the remodel costs.

Operators completing makeovers in 2021 or 2022 will receive less funding, 40 percent of the costs.

By the end of 2018, 7,000 McDonald’s restaurants will sport the EOTF look, which includes modern furniture, kiosks, curbside pick-up, upgraded drive-thrus, power outlets for charging devices and an Uber Eats pick up counter for delivery orders.

Some remodels of aging buildings are so extensive, they require franchisees to raze restaurants and rebuild from scratch.

The company didn’t give a specific reason for slowing the pace of the remodels, stating only that results are positive on locations that have adopted the new look.

The changes are the result of “recent franchisee discussions” where management was told that the remodel pace was stressing the system.

A group of about 400 operators created a franchisee advocacy group called the National Owners Association. The group’s goal is to “work with McDonald’s to positively impact the system.

The adjusted remodel timeline comes as the brand sets new goals for 2019 including bolstering transactions and improving speed of service at the drive-thru.

McDonald’s said they also plan to give operators more flexibility on deploying the company’s value and deal offerings.

2018 National Restaurant News.

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