New CEO unveils plan to flip McDonald’s fortunes

McDonald’s new chief executive officer yesterday said he would reorganise operating units, sell more restaurants to franchisees, and cut costs in a bid to turn the fast-food chain into a “modern, progressive burger company”.

A much-anticipated video announcement by chief executive Steve Easterbrook left investors hungry for specific details on how the world’s biggest restaurant chain would improve food quality and speed-up service.

“I will not shy away from the urgent need to reset this business,” said Mr Easterbrook, who took the helm on March 1 following one of McDonald’s most dismal years on record.

Mr Easterbrook said that McDonald’s will sell 3,500 restaurants to franchisees by 2018, taking global franchisee ownership to 90% from 81%.

McDonald’s prior plan called for selling 1,500 restaurants to franchisees by 2016. He vowed to remove “cumbersome” management and scour the business for inefficiencies. Those moves are expected to result in about $300m in net annual savings, most of which will be realised by the end of 2017.

Mr Easterbrook also said McDonald’s would return $8bn-$9bn to shareholders in 2015.

Dave Hoffman, current president of McDonald’s Asia, Pacific, Middle East, and Africa group unit, will lead a new “high-growth” market that includes China, Italy, Poland, Russia, South Korea, Spain, Switzerland, and the Netherlands.

Those countries currently account for about 10% of McDonald’s operating income.