McDonald's is spending billions to make major changes

CNN — AnNew York (CNN) — McDonald's is spending billions of dollars to boost its franchises, an effort to cement its title as the leader in fast food amid growing competition.

The chain announced Wednesday that it will invest $8.5 billion by 2036 on a series of initiatives, including remodeling restaurants, retraining their 2 million employees and adding new menu items to target high-protein eaters.

About $5 billion will be spent in the next three-and-a-half years alone, a combination of capital support as well as rent relief for franchises.

It's all part of multiyear strategy to win back diners and capture more market share. Last month, McDonald's reported its slowest quarterly growth since 2025. The chain had blamed the decline on launching too many promotions, inadequate customer service and its massive World Cup promotion failing to attract eaters.

The new strategy, called "Next," aims to make the chain "the first choice for more customers, more often — while making our restaurants stronger and easier to run," CEO Chris Kempczinski said in a press release.

McDonald's troubles are part of broader economic issues affecting all dining chains, like rising food prices causing customers to dine out less. The chain's stock have fallen about 20% for the year.

What's new?

In addition to rent relief and capital support, some of that multibillion-dollar spend will be used for remodeling restaurants. McDonald's mandates its franchises remodel every decade.

Images revealed on Wednesday show expansive dining rooms, bigger play areas and improved lighting. There are also redesigned kitchens that will use new AI tools to improve speed and efficiency, which the company said it expects to earn each restaurant an additional $100,000 in cash flow via savings.

McDonald's also focused on changing its menu as it combats new competition, such as: a revitalized Burger King, beverages from fast-growing upstarts, and chicken-centric chains rolling out nuggets and tenders.

Notably, Burger King posted an 8.5% increase in US same-store sales last quarter, outpacing McDonald's by the largest margin in more than a decade.

McDonald's also noted a growing market of protein seekers, which it said amounts to 60 million Americans as well as 30 million GLP-1 users. The chain is testing burger and chicken bowls, egg bites and more grilled chicken options, like in wraps.

Customers "want more protein, greater portion flexibility and food that leaves them feeling satisfied without feeling like too much," McDonald's USA president Skye Anderson said at the company's investor day on Wednesday.

A new value menu is also also being discussed with its franchisees that will replace its recently introduced "$3 and Under" menu, Kempczinski said. Last month, he said restaurants "were overwhelmed by too many deployments (of promotions) in the quarter, which led to less efficient restaurant operations… and impacted customer service times."

In addition to previously announced drinks, the chain is focusing on installing new espresso machines and offering alternative milks in an attempt to improve coffee sales.

Lastly, McDonald's is launching a new program on October 5 to retrain its 2 million employees worldwide. Rivals, like Burger King and Starbucks, are rolling out similar programs as customers grow tired of self-service technology.

"While there is so much our customers love, we are falling short when it comes to consistent execution," Anderson said Wednesday.