McDonald's Shares Plunge on $8.5 Billion Franchisee Support Plan
McDonald's (MCD) shares plummeted by 6.1% in afternoon trading after the company laid out its NEXT strategy and announced it will provide around $8.5 billion in support to franchisees through 2036.
The plan includes approximately $5 billion in rent relief and capital assistance, aimed at accelerating restaurant modernization, technology, and operations. The goal is to achieve about 250 basis points of gross restaurant-level efficiency, resulting in roughly $100,000 of annual cash flow for the average U.S. restaurant, with a four-year payback for franchisees.
McDonald's set targets for 2030, including an operating margin in the low-to-mid 50% range and 1.5 percentage points of share gains in both chicken and beverages. The company also aims to maintain its leadership in beef.
Chris Kempczinski, chairman and chief executive, stated that the aim is to be the first choice for more customers, more often, while making restaurants stronger and easier to run.