McDonald’s sets $8.5 billion NEXT plan through 2036

McDonald’s laid out its NEXT strategy at an investor day in Chicago on September 23, including a planned $8.5 billion in franchisee support through 2036 and targets to lift operating margins into the low-to-mid-50% range by 2030. The company said about $5 billion of the support is planned through 2030, including rent relief and capital contributions, as it seeks to improve restaurant operations and attract customers amid weak U.S. traffic. The presentation followed a difficult period for the chain. U.S. same-store sales rose 0.8% in the second quarter, while domestic guest counts fell and the sales result missed analyst expectations. McDonald’s shares had declined about 18% over the preceding 12 months, and reached a 52-week low of $246.52 on September 22, according to market data cited in reports. The company’s strategy announcement sets out targets, but does not establish that traffic will recover. McDonald’s said NEXT is expected to generate about 250 basis points of restaurant-level efficiency gains once fully implemented in key markets. The company projected that those improvements could translate into roughly $100,000 in additional annual cash flow for an average U.S.