McDonald's Unveils Financial Targets and Restaurant Upgrade Plan

McDonald's on Wednesday announced new financial targets for higher operating margins, a training program to improve food quality and plans to support franchisees financially as they invest in their restaurants.

It unveiled those efforts to improve its business ahead of an investor presentation that will kick off from the fast-food giant's Chicago headquarters at 9:30 a.m. ET on Wednesday.

In June, the company unveiled its newest growth strategy, McDonald's > NEXT. The pillars of the plan include a new restaurant design, better-tasting food and drinks, consumer-led innovation and improved hospitality from employees. But until Wednesday, executives had offered few details about how they would implement the plan and how it would affect its financial results over the coming years.

The shifts come as McDonald's U.S. business tries to rebound from sluggish sales and consumers hit by years of elevated inflation visit restaurants less often.

Programming note: McDonald's CEO Chris Kempczinski will speak to CNBC's "Squawk on the Street" at 10 a.m. ET. Watch live on CNBC or CNBC+.

A key part of the strategy is restaurant remodels, which McDonald's mandates roughly every decade for franchisees. But the chain will also unveil what it calls Restaurant > NEXT, which includes improvements to equipment, technology and operations. It also will feature "ArchIQ," an artificial intelligence-powed operating system for restaurants.

All of those upgrades will require steep investment from franchisees. But McDonald's is also planning to provide financial support, through rent relief and actual capital. Through 2036, McDonald's plans to spend as much as $8.5 billion to accelerate franchisees' investment in the restaurant improvement plan.

About $5 billion of that support will happen through 2030. McDonald's is projecting about $1.5 billion to $2 billion in capital spending from 2027 through 2030 to accelerate NEXT, in addition to about $3 billion every year on typical capital expenditures. (In 2025, McDonald's reported $3.4 billion in capital expenditures.)

Franchisees may protest the franchisor's expectations for their own investment in the restaurants, on top of standard cosmetic remodels. Beef and labor costs are already weighing on their profits.

But executives think that the upgrades will pay off for their locations. McDonald's projects that efficiency improvements will result in an increase of roughly $100,000 in annual cash flow for the average U.S. restaurant, and the initiative will take about four years to return franchisees' investment.

While McDonald's plans to spend more to fuel restaurant improvements, the company said it aims to cut costs elsewhere, although it did not offer specifics. By 2030, McDonald's is targeting an operating margin in the low-to-mid 50% range. In 2025, the company reported operating margins of 46.1%, according to company filings.

Some of that margin expansion will come from its general and administrative spending. By 2030, McDonald's is projecting that about 1.9% of its system-wide sales will go toward G&A. For comparison, the company is currently forecasting that 2.2% of its system-wide sales will be spent on G&A in 2026.

McDonald's also has an eye on growing its sales globally. Some of that will come from new locations. Next year, the company expects restaurant openings will make up about 2.5% of its system-wide sales growth.

The company's accelerated expansion will slow in the following years. By 2030, McDonald's anticipates new restaurants will account for only about 2% of growth to system-wide sales.

In recent years, the burger chain has leaned into menu items other than its core beef offerings to drive sales, namely chicken and beverages. By 2030, McDonald's wants to grow its global market share in those two categories by about 1.5 percentage points each.

Still, McDonald's isn't abandoning burgers. The company wants to hold onto its leadership in beef, too.

To do so, it plans on implementing "Make It Golden," a multi-year employee training program to ensure consistency, improved quality and better customer service. The program will begin rolling out on Oct. 5, the 124th birthday of Ray Kroc, who turned the burger restaurant into a global giant.