{"id":1814531,"date":"2026-09-01T10:16:56","date_gmt":"2026-09-01T08:16:56","guid":{"rendered":"https:\/\/lexpress-franchise.com\/en-us\/news\/mcdonalds-franchisees-flag-falling-profits-as-remodel-costs-loom\/"},"modified":"2026-09-01T09:41:20","modified_gmt":"2026-09-01T07:41:20","slug":"mcdonalds-franchisees-flag-falling-profits-as-remodel-costs-loom","status":"publish","type":"post","link":"https:\/\/lexpress-franchise.com\/en-us\/news\/mcdonalds-franchisees-flag-falling-profits-as-remodel-costs-loom\/","title":{"rendered":"McDonald’s Franchisees Flag Falling Profits as Remodel Costs Loom"},"content":{"rendered":"\n

A National Owners Association survey of more than 100 McDonald’s franchisees<\/a> finds that 95% saw store-level profitability fall in the first quarter of 2026, and 97% say the chain’s current plan is not improving their cash flow. The results arrive just as McDonald’s prepares a remodel cycle estimated to cost each franchisee between $400,000 and $700,000 per location.<\/strong><\/p>\n\n\n\n

McDonald’s<\/strong> operates roughly 14,000 franchise restaurants<\/a> in the United States, almost all of them run by independent franchisees. The National Owners Association (NOA)<\/strong>, a franchisee group that operates independently from the company, surveyed more than 100 of the chain’s owner-operators and shared the results with Restaurant Business. The picture they describe is one of a system under financial strain at a particularly delicate moment for the brand.<\/p>\n\n\n\n

A System Under Financial Strain: What the Survey Found<\/h2>\n\n\n\n

The NOA survey found that nearly eight in ten franchisees reported cash flow that is “not sufficient to support required reinvestment obligations.” Ninety-nine percent said their food and paper costs have increased since late 2025. The association, in a message to the company seen by Restaurant Business, described the situation in direct terms: “Restaurant-level profitability continues to deteriorate, while rising operating costs, constrained pricing flexibility, and increasing reinvestment obligations are placing significant pressure on owner\/operators,” says the National Owners Association<\/strong>. All but 3% of respondents reported that their control over pricing had been either weakened or removed altogether.<\/p>\n\n\n

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McDonald\u2019s<\/p>\n <\/a>\n

I\u2019m Lovin\u2019 It<\/p>\n <\/div>\n

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  • \n <\/path><\/svg> <\/span>Restaurant <\/li>\n
  • \n <\/path><\/path><\/svg> <\/span>13706 <\/li>\n
  • \n <\/path><\/svg> <\/span>Liquid capital: $750000 <\/li>\n <\/ul>\n <\/div>\n I want more info<\/a>\n <\/div>\n <\/div>\n <\/div>\n <\/div>\n
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    A Discount Strategy That Generated Traffic Losses Instead<\/h2>\n\n\n\n

    McDonald’s U.S. same-store sales rose 0.8%<\/strong> in the second quarter of 2026, but that result came alongside weak traffic. The company introduced a $3 and Under<\/strong> value menu and a series of related discounts, in part to attract lower-income consumers. Three-quarters of franchisees surveyed said they felt directly pressured to lower prices, and more than eight in ten reported that the discounts did not generate enough additional customers to offset the margin impact. The failed approach is estimated to have cost the system approximately $310 million<\/strong> in a single quarter. Following the results, U.S. market president Joe Erlinger<\/strong> stepped down and was replaced by longtime McDonald’s executive Skye Anderson<\/strong>.<\/p>\n\n\n\n

    A Remodel Program Worth Billions Waiting in the Wings<\/h2>\n\n\n\n

    The profitability concerns arrive at a difficult time. McDonald’s is preparing a 10-year store remodel cycle expected to begin in 2027 and 2028. Franchisees in the NOA survey estimated their individual costs for the upgrades at between $400,000<\/strong> and $700,000<\/strong> per location. The association questioned why a large-scale facility investment is being planned so soon after the previous remodel program, which had already required operators to take on significant debt. CEO Chris Kempczinski<\/strong> described franchisees’ current borrowing capacity as still strong, and expressed confidence in the program’s execution.<\/p>\n\n\n

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    They’ve got a lot of borrowing capacity still. I feel very confident we’ll be able to get this thing done.<\/blockquote><\/div>

    A QUOTE FROM<\/p>

    Chris Kempczinski<\/p>

    CEO, McDonald's<\/p><\/div><\/div><\/div><\/div>\n\n\n

    Corporate and Franchisees Preparing for Another Round of Negotiations<\/h2>\n\n\n\n

    McDonald’s responded to the NOA survey by noting that it represents “a small subset” of its more than 2,000 franchisees, and that significant collaboration between the company and elected operator groups is already underway. Kempczinski identified overreliance on marketing and the discounted menu as root causes of the U.S. performance shortfall. The company will need to build franchisee consensus around a new value strategy to replace the discontinued program. As Kempczinski acknowledged in his investor remarks, that process requires franchisee agreement rather than a corporate directive, making the outcome of ongoing talks central to the chain’s near-term direction.<\/p>\n\n\n\n

    This content is provided for informational purposes only and does not constitute legal, tax, financial, or professional advice. Laws and regulations vary by state and individual circumstances and may change over time. Readers should consult a qualified attorney, tax professional, or other licensed professional regarding their specific situation. Nothing herein creates an attorney-client relationship.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    A National Owners Association survey of more than 100 McDonald’s franchisees finds that 95% saw store-level profitability fall in the first quarter of 2026, and 97% say the chain’s current plan is not improving their cash flow. The results arrive just as McDonald’s prepares a remodel cycle estimated to cost each franchisee between $400,000 and […]<\/p>\n","protected":false},"author":788,"featured_media":1814547,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_seopress_titles_title":"McDonald's Franchisees: Profits Down, Remodels Ahead","_seopress_titles_desc":"According to a national owners association, 95% of McDonald\u2019s franchisees saw profits fall in Q1 2026 as costly remodels loom from 2027.","_seopress_robots_index":"","_seopress_robots_follow":"","_seopress_robots_imageindex":"","_seopress_robots_snippet":"","_seopress_robots_primary_cat":"","_seopress_robots_breadcrumbs":"","_seopress_robots_freeze_modified_date":"","_seopress_robots_custom_modified_date":"","_seopress_robots_canonical":"","_seopress_social_fb_title":"","_seopress_social_fb_desc":"","_seopress_social_fb_img":"","_seopress_social_fb_img_attachment_id":0,"_seopress_social_fb_img_width":0,"_seopress_social_fb_img_height":0,"_seopress_social_twitter_title":"","_seopress_social_twitter_desc":"","_seopress_social_twitter_img":"","_seopress_social_twitter_img_attachment_id":0,"_seopress_social_twitter_img_width":0,"_seopress_social_twitter_img_height":0,"_seopress_redirections_value":"","_seopress_redirections_enabled":"","_seopress_redirections_enabled_regex":"","_seopress_redirections_logged_status":"","_seopress_redirections_param":"","_seopress_redirections_type":0,"_seopress_analysis_target_kw":"","_seopress_news_disabled":"","_seopress_video_disabled":"","_seopress_video":[],"_seopress_pro_schemas_manual":[],"_seopress_pro_rich_snippets_disable_all":"","_seopress_pro_rich_snippets_disable":[],"_seopress_pro_schemas":[],"content-type":"","_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"1553148,1543960,1798251,1603810,1764802,1552004","_relevanssi_noindex_reason":"","footnotes":""},"categories":[3594],"tags":[],"type-de-post":[2066],"class_list":["post-1814531","post","type-post","status-publish","format-standard","has-post-thumbnail","category-franchise-networks","type-de-post-articles-actualite"],"acf":[],"permalink_manager":null,"_links":{"self":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts\/1814531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/users\/788"}],"replies":[{"embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/comments?post=1814531"}],"version-history":[{"count":4,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts\/1814531\/revisions"}],"predecessor-version":[{"id":1814545,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/posts\/1814531\/revisions\/1814545"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/media\/1814547"}],"wp:attachment":[{"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/media?parent=1814531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/categories?post=1814531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/tags?post=1814531"},{"taxonomy":"type-de-post","embeddable":true,"href":"https:\/\/lexpress-franchise.com\/en-us\/wp-json\/wp\/v2\/type-de-post?post=1814531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}