McDonald's to spend $6 billion on nationwide restaurant makeovers
McDonald's announced the company and its franchisees are investing $6 billion on the construction and modernization of most of its restaurants by 2020.
According to McDonald's, the transformed restaurants will feature:
- Modernized dining rooms with globally and locally inspired decor, new furniture and refreshed exterior designs
- Digital self-order kiosks
- Remodeled counters to allow for new table service
- Digital menu boards inside and at the drive through
- New designated parking spots for curbside pick-up through mobile order and pay
- Expanded McCafé counters and larger display cases
In addition to the investments to modernize the restaurant, McDonald's has also introduced McDelivery with Uber Eats at more than 5,000 U.S. restaurants.
The "Golden Arches" still have a massive global reach, and the McDonald's brand of cheeseburgers, chicken nuggets and french fries remains recognizable around the world. But on its critical home turf, the company is toiling to stay relevant. Kale now appears in salads, fresh has replaced frozen beef patties in Quarter Pounders, and some stores now offer ordering kiosks, food delivery and barista-style cafes.
"Clearly, we've gotten a little more sophisticated in our menu development," McDonald's CEO Steve Easterbrook said in a phone interview.
Big Mac turns 50
The moves come as the company celebrates the 50th anniversary of the Big Mac. As with many of its popular and long-lasting menu items, the idea for the Big Mac came from a franchisee.
In 1967, Michael James "Jim" Delligatti lobbied the company to let him test the burger at his Pittsburgh restaurants. Later, he acknowledged the Big Mac's similarity to a popular sandwich sold by the Big Boy chain.
"This wasn't like discovering the light bulb. The bulb was already there. All I did was screw it in the socket," Delligatti said, according to "Behind the Arches."
McDonald's agreed to let Delligatti sell the sandwich at a single location, on the condition that he use the company's standard bun. It didn't work. Delligatti tried a bigger sesame seed bun, and the burger soon lifted sales by more than 12 percent.
After similar results at more stores, the Big Mac was added to the national menu in 1968. Other ideas from franchisees that hit the big time include the Filet-O-Fish, Egg McMuffin, Apple Pie (once deep-fried but now baked), and the Shamrock Shake.
"The company has benefited from the ingenuity of its small business men," wrote Ray Kroc, who transformed the McDonald's into a global franchise, in his book, "Grinding It Out."
Franchisees still play an important role, driving the recent switch to fresh from frozen for the beef in Quarter Pounders, Easterbrook says. They also participate in menu development, which in the U.S. has included a series of cooking tweaks intended to improve taste.
Messing with a signature menu item can be taboo, but keeping the Big Mac unchanged comes with its own risks. Newer chains such as Shake Shack and Five Guys offer burgers that can make the Big Mac seem outdated. Even White Castle is modernizing, recently adding plant-based "Impossible Burger" sliders at some locations.
A McDonald's franchisee fretted in 2016 that only one out of five millennials has tried the Big Mac. The Big Mac had "gotten less relevant," the franchisee wrote in a memo, according to the Wall Street Journal.
McDonald's then ran promotions designed to introduce the Big Mac to more people. Those kind of periodic campaigns should help keep the Big Mac relevant for years to come, says Mike Delligatti, the son of the Big Mac inventor, who died in 2016.
"What iconic sandwich do you know that can beat the Big Mac as far as longevity?" said Delligatti, himself a McDonald's franchisee.