CHICAGO, IL – McDonald’s (MCD) is making a long-term bet on artificial intelligence, hand-breaded chicken and the return of ’90s-style restaurants to win back customers who left for other chains, such as Burger King. At its investor day in Chicago, the fast-food giant unveiled an ambitious new set of goals and investments as part of its growth plan, following a difficult second quarter that resulted in U.S. comparable sales growth of 0.8% versus Burger King’s massive 8.5% growth. McDonald’s said it plans to invest $8.5 billion through 2036 to support restaurant technology upgrades with rental and capital assistance. It intends to deliver about $5 billion of that investment by 2030. “It starts with the opportunity, which we think is really clear and compelling,” McDonald’s CFO Ian Borden told Yahoo Finance. “We think it will provide a really strong return for our operators and for McDonald’s.” Franchisees are encouraged to adopt the plan in phases. One franchise operator told Yahoo Finance that they are advancing on tight margins with higher ingredient, labor and rent costs, making another costly redesign difficult, especially in a high interest rate environment. New McDonald’s restaurant design (Courtesy: McDonald’s) “There’s certainly a different interest rate environment with franchisees,” McDonald’s CEO Chris Kempczinski told Yahoo Finance. “10 years ago… it was practically like free money.” However, he added, “the benefit is the franchisees, even though they are assuming the money, they have… that kind of McDonald’s halo… The interest rate that the banks charge them or that the banks will charge them will be significantly lower than if they were Joe’s Burger Joint.” Operators are expected to update the appearance of restaurants as part of a remodeling cycle every 10 years, according to McDonald’s, and Kempczinski said those costs typically add up to between $400,000 and $450,000 per restaurant. Implementing McDonald’s suite of productivity improvements will cost franchise operators an additional $800,000 per U.S. restaurant. For international markets, it will cost between $650,000 and $750,000. “It’s just about keeping the restaurant updated… painting the walls, fixing the roof, making sure the parking lots are in good condition, that’s all part of that investment,” Kempczinski said. “The rest of the investment, approximately [$800,000] …more or less, everything is tied to initiatives that drive sales or productivity.” It remains to be seen whether the strategic growth plan can turn McDonald’s stock around. McDonald’s stock has struggled to entice investors to take part this year, falling 18% so far this year, compared with a 4.6% gain for shares of Burger King parent Restaurant Brands International (QSR), and a 13% gain for the S&P 500 (^GSPC). 5% on Wednesday, but ‘Make it Golden’ Part of the strategy is a commitment called “Make it Golden,” which doubles down on food, hospitality and employee training, after Burger King overhauled its chicken nugget recipe, McDonald’s is doing something similar by testing hand-breaded chicken, it told Yahoo Finance. The secret is to flip the chicken times, McDonald’s new hand-breaded chicken. McDonald’s is aiming for a 1.5% gain in its market share, with the chicken and beverage categories leading the way (craft sodas are another major focus for McDonald’s. It hopes to add more U.S. restaurants to the hand-breaded chicken pilot program in early 2027. Mignault said the new chicken “is actually outperforming the competition from a taste and quality standpoint” in Asian markets. The company has also begun testing bone-in wings. McDonalds also aims Maintain its beef market share lead after leaning toward the Big Arch burger, which went viral earlier this year after a video of CEO Chris Kempczinski testing the burger prompted other fast-food CEOs to return. The goal is to get families to visit restaurants more often and spend more when they do. Foot traffic at McDonald’s is down. For the week of September 7, McDonald’s foot traffic fell 3.1% year over year. year-over-year, compared to a 2.8% decline for quick-service restaurants overall and a 7.1% increase for Burger King, according to Placer.ai. “The look and feel of restaurants,” Jill McDonald, executive vice president and global head of restaurant experience, told Yahoo Finance. The back of the house is also being upgraded with AI technology, called ArchIQ. that McFlurry Machine doesn’t stop working. CFO Borden said this is different from the company’s previous partnership with IBM (IBM), which ended in 2024. “A few years ago, it was a different technology platform,” Borden said. “That big language model we’re building with Google just allows learning to become more and more precise. … We’re already very advanced compared to where we were several years ago with what we were doing previously.” executives, and will contribute to a portion of a 250 basis point improvement in restaurant-level gross efficiency gains, which the company says is equivalent to about $100,000 in annual cash flow for the average U.S. restaurant. The drive-thru technology is expected to save restaurants more than 50 hours of work per week, McDonald’s said — Brooke DiPalma is a Yahoo Finance reporter Follow her on X at @BrookeDiPalma. or email him at bdipalma@yahoofinance.com Click here for the latest stock market news and in-depth analysis, including stock-moving events Read the latest financial and business news from Yahoo Finance.
