McDonald's announced its new growth strategy, NEXT, at an investor event on the 23rd, pledging about $8.5 billion in support to franchise owners through 2036 to modernize restaurants, improve operations and win more visits.

The strategy aims to raise food quality, customer experience, restaurant operations and service standards together, and includes a push into chicken and beverages and new protein-focused menu items.

Rent Relief and Capital Support

About $5 billion of the support is expected by 2030 through rent relief and capital support. Franchisees will have to invest roughly an additional $800,000 per restaurant over time, with the company covering part of that cost.

The restaurant element calls for simpler operations, updated designs, consistent execution and deployment of ArchIQ, a system the company describes as enabled by generative AI. McDonald's estimates the average US restaurant could gain about $100,000 a year in cash flow once improvements are complete, with a payback of about four years for franchisees.

A Challenge Across the Restaurant Industry

As labour and ingredient costs rise, restaurant franchises are walking a tightrope between price increases and losing customers. Headquarters directly underwriting franchisee investment may serve as a reference for franchise industries in Korea and Taiwan. Chinese restaurants in Incheon and Seoul are weighing similar trade-offs between labour costs and ordering automation.