McDonald’s plans $8.5 billion in franchise support

McDonald’s plans about $8.5 billion in franchise support through 2036, including about $5 billion through 2030, for NEXT restaurant upgrades. Announced September 23, the package combines rent relief and capital support. Company announcement

How the investment is shared#

For conventional franchisees, rent relief offsets occupancy costs; capital support funds improvements. Under the model described in McDonald’s 2025 annual filing, the company generally owns the land and building or holds a long lease. The operator pays for equipment, signs, seating and décor, and remains responsible for reinvesting in the business.

Conventional franchisees pay rent and royalties linked to sales, with minimum rents also specified. Fees vary with the site, McDonald’s investment and local conditions. The filing also describes company co-investment to accelerate restaurant or operating-system improvements. 2025 Form 10-K

Agreements generally last 20 years. Franchisees also pay fees that recover some company spending on technology and digital platforms.

That arrangement differs from developmental licenses and affiliates: those operators provide capital, including their real estate interest, and McDonald’s generally does not invest restaurant capital. The company earns sales-based royalties and generally initial fees from those arrangements.

For NEXT, McDonald’s says markets will sequence investment around franchisee capacity and returns. It targets about 250 basis points of gross restaurant-level efficiency gains when NEXT is fully deployed across the U.S. and International Operated Markets. The restaurant plan includes deploying generative-AI-enabled ArchIQ.

The company equates the efficiency target to roughly $100,000 in annual cash flow benefits for an average U.S. restaurant, with most expected to reach its bottom line over time, and estimates an approximately four-year franchisee payback after support. NEXT financial targets

Technology already in the restaurant#

McDonald’s also uses company-operated restaurants to train personnel and test franchisee innovations, according to the filing. Those locations help refine restaurant operating standards.

In an August 14, 2025 update, Chief Information Officer Brian Rice described Edge, a platform developed with Google that brings cloud computing capabilities into restaurants. It was then operating in hundreds of U.S. locations, with international expansion underway. Digital transformation update

Rice also reported that Accuracy Scales had reached thousands of restaurants in a dozen markets. The devices compare the expected weight of an order with the actual weight and flag possible missing items for crew members before handoff. That deployment covered drive-thru and delivery orders.

Ready on Arrival addressed another point in the order process: when preparation begins. Geofencing alerts crews as a customer approaches, so they can start making the order. These were separate functions in the company’s account of its restaurant and customer platforms: local computing, checking packed orders and timing order preparation.

The operating baseline#

For the quarter ended June 30, 2026, McDonald’s global comparable sales rose 1.3% year over year and U.S. comparable sales increased 0.8%. The measure covers company-operated and franchised restaurants in operation at least 13 months, including temporarily closed locations. Higher checks, including favorable product mix, lifted the U.S. result, partly offset by fewer comparable guest transactions. The results were released August 4. Second-quarter results

McDonald’s recorded $4.393 billion in revenue from franchised restaurants for that quarter, alongside $2.525 billion in sales at company-operated restaurants. These are McDonald’s corporate revenues, distinct from sales and profits earned by franchisees.