McDonald's is set to invest up to $8.5 billion by 2036 to accelerate its restaurant improvement plan, according to a report by CNBC. The fast-food giant announced new financial targets, aiming to increase operating profit margins, alongside a training program to enhance food quality and plans to provide financial support to franchisees during their investments in restaurants. This effort is part of McDonald's strategy to revamp its business ahead of an investor presentation.
The company's plan, dubbed "McDonald's NEXT," includes a new restaurant design, improved food and beverage taste, innovation based on consumer needs, and enhanced customer service. However, executives provided limited details on implementing the plan and its expected impact on the company's financial results in the coming years. McDonald's operations in the US are recovering from a sales slump due to high inflation rates.
Updating and redesigning restaurants is a key part of the strategy, with McDonald's requiring franchisees to undertake this process approximately every decade. The company will also introduce "Restaurant NEXT," which includes equipment, technology, and operational improvements, such as the "ArchIQ" system, an AI-powered restaurant operating system. These updates will require significant investments from franchisees, but McDonald's plans to offer financial support.
McDonald's expects to spend between $1.5 billion and $2 billion in capital expenditures from 2027 to 2030 to accelerate the "NEXT" initiative, in addition to $3 billion spent annually on usual capital expenditures. The company reported $3.4 billion in capital expenditures in 2025. Franchisees may resist the expected investment in restaurants, which comes on top of usual renovation costs.
Despite potential resistance, executives believe these updates will benefit franchisee locations. McDonald's expects efficiency improvements to increase annual cash flow by around $100,000 for the average US restaurant, with the initiative taking about four years to recover franchisee investments. The company aims to reduce costs in other areas, targeting an operating margin of 50% by 2030.
McDonald's plans to increase global sales, partly through new restaurant openings, expecting them to contribute around 2.5% to total system sales growth next year. However, expansion will slow in later years, with new restaurants expected to contribute only 2% to total sales growth by 2030. The company also aims to increase its global market share in chicken and beverages.
To achieve this, McDonald's will launch a multi-year training program for employees called "Make It Golden," focusing on consistency, quality, and customer service. The program will start on October 5, marking the 124th anniversary of Ray Kroc's birth, who transformed the burger restaurant into a global giant.
Key points
- McDonald's plans to invest up to $8.5 billion by 2036 to upgrade restaurants and train employees.
- The company aims to increase operating profit margins and global sales through new restaurant openings and efficiency improvements.
- McDonald's will launch a training program for employees to enhance food quality and customer service.
