Updated Version 2 - McDonald's launches a $8.5 billion franchisee support program, aiming to increase profit margins by 2030

Comments from the CEO were added in paragraph 5, and share price information was added in paragraph 6.

Reuters, September 23 - McDonald's MCD.N announced on Wednesday that, as part of an expanded growth plan, it will provide approximately $8.5 billion in support to franchisees and set targets for profit margin and market share growth, aiming to revive sales momentum after several consecutive quarters of lackluster performance.

Not long ago, the company attributed lower-than-expected U.S. sales growth in the second quarter to weak execution in winning back low-income consumers amid economic uncertainty.

Prior to an investor meeting scheduled for later the same day, the company stated that its investment to support franchisees would last for the next ten years through 2036. The company also set productivity targets for its restaurants and aims to achieve an operating profit margin in the low-to-mid 50% range by 2030.

Under the leadership of industry veteran Skye Anderson (link), who was appointed president of U.S. operations last month, the company's efforts to revitalize its business in the U.S. market are gaining new momentum.

“We expect that with inflation remaining high, our traffic growth in fully owned markets will be flat,” CEO Chris Kempczinski cautioned at the investor day meeting.

The company’s share price fell 3.6% in early trading, erasing premarket gains. Year to date, the stock has fallen by nearly 18%.

McDonald's "NEXT" strategy, announced in June, aims to enhance food quality, service experience, value, and innovation. On Wednesday, company executives detailed the implementation roadmap of this plan for the first time.

The plan also includes streamlining operations, updating restaurant designs, investing in staff training, and expanding the application of its AI-driven restaurant operating system ArchIQ—which automates tasks such as drive-thru ordering.

McDonald's expects the plan to improve restaurant efficiency by 250 basis points, generating about $100,000 in additional annual cash flow for each U.S. restaurant on average.

The company stated that, out of the $8.5 billion total investment, about $5 billion will be deployed by 2030 through a combination of rental relief and capital support for franchisees.

The burger chain also expects store expansion to contribute about 2.5% to total system sales growth in 2027 and around 2% by 2030.

Additionally, given that rising beef prices are driving demand for chicken, the company has set a goal to increase its global chicken product market share by 1.5 percentage points by 2030.

(To facilitate non-English speakers, Reuters has automated the translation of its reports into several other languages. As automated translations may contain inaccuracies or lack required context, Reuters does not guarantee the accuracy of the automated translation, which is provided solely for the convenience of readers. Reuters accepts no responsibility for any damage or loss arising from the use of the automated translation function.)