CHICAGO, December 6 — McDonald’s says it will spend approximately $8.5 billion across 2024 and 2025 to modernize its restaurant fleet, enhance technology and support its franchisees, one of the largest capital expenditure programs in the company’s history and a bet that the burger chain can stay ahead of rivals by modernizing faster than they can. The figure, announced at the company’s investor day in Chicago, dwarfs what McDonald’s had been spending. In 2023 it expected to spend about $2.4 billion.
The new money splits between the United States, at about $4.5 billion, and international operated and developmental license markets, at $4 billion.
What the money buys
At its heart the plan is about speed and technology. About $1 billion goes to technology and digital initiatives, including AI-powered drive-thrus and personalized marketing. The rest covers digital ordering kiosks, kitchen equipment, drive-thru upgrades, and the rollout of CosMc’s, the small-format, beverage-led concept.
CEO Chris Kempczinski said the investment aims to accelerate growth and improve the customer experience as competition intensifies and consumer preferences shift. The company will fund the program through operating cash flow and debt, and says it will maintain its investment-grade credit rating.
Franchisees, who operate about 95% of McDonald’s locations worldwide, are central to whether any of it works. They will receive financial incentives and support to implement the changes, though the announcement drew a mixed response: some franchisee groups welcomed it, while others raised concerns about the pace of change and the disruption it could cause.
Expansion and the pressures behind it
The spending sits inside the company’s “Accelerating the Arches” strategy, launched in 2020 and built around marketing, core menu items, digital sales and drive-thru efficiency. It is the largest capital allocation since 2018, when McDonald’s invested $6 billion in restaurant renovations. McDonald’s also plans to open nearly 10,000 new restaurants globally by 2027, against a current footprint of more than 40,000 locations.
The chain operates in over 100 countries and employs more than 2 million people, including franchisees and their employees. The push comes amid pressure from activist investors and franchisee groups over store conditions, labor practices and the cost of doing business.
McDonald’s reiterated its commitment to sustainability, including reducing greenhouse gas emissions and improving packaging. Wall Street took the news in stride. The stock closed slightly higher on the day and is up about 8% year-to-date.
Analysts called the plan ambitious but necessary to maintain market leadership. Watch the fourth-quarter earnings call in January 2024, when the company is expected to give more detail on how the spending will be phased — the majority of it landing in 2024.
