McDonald’s Franchisees Resist $800,000 Revamp Plan as Stock Stalls

McDonald’s stock (MCD) remained flat as franchisees expressed concerns over the company’s ambitious revamp plan, which could cost them up to $800,000 per location. The “Next” business plan, introduced by CEO Chris Kempczinski in June, includes redesigned restaurants, menu changes, and efficiency improvements aimed at enhancing the customer experience. However, franchisees are hesitant due to the substantial financial burden, which could reach $1.2 million per restaurant when combined with existing remodel costs.

The company has pledged $8.5 billion in cash and rent relief to help offset some of the expenses, though franchisees remain wary. They have delayed a planned prototype tour, seeking more details on potential sales increases before committing to the upgrades. Analysts suggest franchisees may negotiate the costs down by 20-40% as they review the plan’s financials.

McDonald’s expects the upgrades to boost efficiency by 250 basis points, saving about $100,000 annually in operating cash. The company believes franchisees will recoup their investments within four years. However, recent performance has been lackluster, with U.S. same-store sales rising only 0.8% in Q2, the weakest result since early 2025.

Despite the challenges, McDonald’s maintains confidence in its plan, working with franchisees to address their concerns. On TipRanks, MCD has a Moderate Buy consensus, with a price target of $294, suggesting a 26.45% upside from current levels.