McDonald's explained

McDonald's Corporation
Type:Public
Founded:, in San Bernardino, California, United States
(McDonald's Corporation)
Founders:Richard & Maurice McDonald
(original restaurant chain)Ray Kroc
(McDonald's Corporation)
Hq Location City:Chicago, Illinois
Hq Location Country:United States
Num Locations: 41,822 restaurants
Num Locations Year:2023
Area Served:Worldwide (119+ countries)
Industry:Fast food restaurants, real estate
Revenue: US$25.49 billion
Revenue Year:2023
Operating Income: US$11.65 billion
Income Year:2023
Net Income: US$8.469 billion
Net Income Year:2023
Assets: US$56.15 billion
Assets Year:2023
Equity: −US$4.71 billion
Equity Year:2023
Num Employees Year:2023
Website:
Footnotes:[1] [2] [3] [4] [5] [6] [7]

McDonald's Corporation is an American multinational fast food chain, founded in 1940 as a restaurant operated by Richard and Maurice McDonald, in San Bernardino, California, United States. They rechristened their business as a hamburger stand and later turned the company into a franchise, with the Golden Arches logo being introduced in 1953 at a location in Phoenix, Arizona. In 1955, Ray Kroc, a businessman, joined the company as a franchise agent and, in 1961, bought out the McDonald brothers. Previously headquartered in Oak Brook, Illinois, it moved to nearby Chicago in June 2018.[8] [9] [10] [11] McDonald's is also a real estate company through its ownership of around 70% of restaurant buildings and 45% of the underlying land (which it leases to its franchisees).[12] [13]

McDonald's is the world's largest fast food restaurant chain,[14] serving over 69 million customers daily in over 100 countries[15] in more than 40,000 outlets as of 2021.[16] [17] McDonald's is best known for its hamburgers, cheeseburgers and french fries, although their menu also includes other items like chicken, fish, fruit, and salads. Their bestselling licensed item is their french fries, followed by the Big Mac.[18] The McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. McDonald's is the world's second-largest private employer with 1.7 million employees (behind Walmart with 2.3 million employees), the majority of whom work in the restaurant's franchises.[19] [20], McDonald's has the sixth-highest global brand valuation.[21]

McDonald's has been subject to criticism over the health effects of its products,[22] [23] its treatment of employees,[24] and its participation in various legal cases.

History

See main article: History of McDonald's.

Siblings Richard and Maurice McDonald opened the first McDonald's at 1398 North E Street at West 14th Street in San Bernardino, California on May 15, 1940. The brothers introduced the "Speedee Service System" in 1948, putting into expanded use the principles of the modern fast-food restaurant that predecessor White Castle had put into practice more than two decades earlier.[25] [26] The original mascot of McDonald's was a hamburger-headed chef who was referred to as "Speedee".[27] In 1962, the Golden Arches replaced Speedee as the universal mascot.[28] Clown mascot Ronald McDonald was introduced in 1963 to market the chain to children.[29]

On May 4, 1961, McDonald's first filed for a U.S. trademark on the name "McDonald's" with the description "Drive-In Restaurant Services," which continues to be renewed. By September 13, McDonald's, under the guidance of Ray Kroc, filed for a trademark on a new logo—an overlapping, double-arched "M" symbol. But before the double arches, McDonald's used a single arch for the architecture of their buildings. Although the "Golden Arches" logo appeared in various forms, the present version was not used until November 18, 1968, when the company was granted a U.S. trademark.

The present corporation credits its founding to franchised businessman Ray Kroc on April 15, 1955.[30] This was the ninth opened McDonald's restaurant overall, although this location was destroyed and rebuilt in 1984. Kroc was recorded as being an aggressive business partner, driving the McDonald brothers out of the industry.[31]

Kroc and the McDonald brothers fought for control of the business, as documented in Kroc's autobiography. In 1961, he purchased the McDonald brothers' equity in the company and began the company's worldwide reach.[32] The sale cost Kroc $2.7 million, a huge sum during that time. The San Bernardino restaurant was eventually torn down in 1971, and the site was sold to the Juan Pollo chain in 1998. This area serves as headquarters for the Juan Pollo chain, and a McDonald's and Route 66 museum.[33] [34] With the expansion of McDonald's into many international markets, the company has become a symbol of globalization and the spread of the American way of life.[35] Its prominence has made it a frequent topic of public debates about obesity, corporate ethics, and consumer responsibility.

Products

See main article: List of McDonald's products.

McDonald's predominantly sells hamburgers, various types of chicken, chicken sandwiches, French fries, soft drinks, shakes, breakfast items, and desserts. In most markets, McDonald's offers salads and vegetarian items, wraps and other localized fare. On a seasonal basis, McDonald's offers the McRib sandwich. Some speculate the seasonality of the McRib adds to its appeal.[36] During March of each year, McDonald's offers a Shamrock Shake to honor Saint Patrick's Day.[37]

In addition, the chain also sells some items within the United States on a regional basis; for example, the Hatch Green Chile Double Cheeseburger, which is topped with New Mexico green chile, is only available in the southwestern state of New Mexico.[38] [39]

Products are offered as either "dine-in" (where the customer opts to eat in the restaurant) or "take-out" (where the customer opts to take the food off the premises). "Dine-in" meals are provided on a plastic tray with a paper insert on the floor of the tray. "Take-out" meals are usually delivered with the contents enclosed in a distinctive McDonald's-branded brown paper bag. In both cases, the individual items are wrapped or boxed as appropriate.

Since Steve Easterbrook became CEO of the company in 2015, McDonald's has streamlined the menu which in the United States contained nearly 200 items. The company has looked to introduce healthier options and removed high-fructose corn syrup from hamburger buns. The company has removed artificial preservatives from Chicken McNuggets,[40] replacing chicken skin, safflower oil and citric acid found in Chicken McNuggets with pea starch, rice starch, and powdered lemon juice.[41]

In September 2018, McDonald's USA announced that they no longer use artificial preservatives, flavors and colors entirely from seven classic burgers sold in the U.S., including the hamburger, cheeseburger, double cheeseburger, McDouble, Quarter Pounder with Cheese, double Quarter Pounder with Cheese and the Big Mac.[42] [43] Nevertheless, the pickles will still be made with an artificial preservative, although customers can choose to opt out of getting pickles with their burgers.[44] [45]

In November 2020, McDonald's announced McPlant, a plant-based burger, along with plans to develop additional meat alternative menu items that extend to chicken substitutes and breakfast sandwiches.[46] [47] This announcement came after the successful testing of Beyond Meat plant based meat substitutes. In late 2022, McDonald's announced the addition of the Double McPlant at all restaurants in the United Kingdom and Ireland starting January 4 due to the success of the McPlant.[48] In 2024, select McDonald's in the UK were testing vegan ice cream called Choco Scoop and Strawberry Scoop and receiving positive reviews.[49]

The company often introduces items temporarily or brings them back after long absences.[50] [51]

International menu variations

See also: International availability of McDonald's products.

McDonald's Menu is customized to reflect consumer tastes in their respective countries. Restaurants in several countries, particularly in Asia, serve soup. This local deviation from the standard menu is a characteristic for which the chain is particularly known and one which is employed either to abide by regional food taboos (such as the religious prohibition of beef consumption in India) or to make available foods with which the regional market is more familiar (such as the sale of McRice in Indonesia, or Ebi (prawn) Burger in Singapore and Japan). McDonald's restaurants in China include fried buns and soybean milk on their breakfast menus.[52]

In Germany and some other Western European countries, McDonald's sells beer. In New Zealand, until 2020, McDonald's sold meat pies after local affiliate McDonald's New Zealand partially relaunched the Georgie Pie fast food chain it bought out in 1996.[53] In Greece, the signature hamburger, Big Mac, is changed by adding Tzatziki sauce and packaging in a pita.[54]

In the United States and Canada, after limited trials on a regional basis, McDonald's began offering in 2015[55] and 2017,[56] respectively, a partial breakfast menu during all hours its restaurants were open. All-day breakfast was phased out from menus at the start of the COVID-19 pandemic in 2020.[57]

McDonald's Operations in the United States

There are over 36,000 McDonald's restaurants globally. Over a third of these (14,146 restaurants) are in the United States alone. The second highest number is in Japan, with 2,975 restaurants, followed by China, with 2,700. These three countries make up the majority of global McDonald's stores.

Types

In the United States, most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating.[58] Drive-Thru, Auto-Mac, Pay and Drive, or "McDrive" as it is known in many countries, often has separate stations for placing, paying for, and picking up orders while the customer remains in their vehicle; it was first introduced in Sierra Vista, Arizona in 1975,[59] following the lead of other fast-food chains. The first such restaurant in Britain opened at Fallowfield, Manchester, in 1986.[60]

In 1994, McDonald's attempted Hearth Express, a prototype specializing in homestyle takeout meals. Among the fare offered were meatloaf, fried chicken, and baked ham. This experiment started with a single location in Darien, Illinois but closed in only one year.[61]

McDrive

In some countries, McDrive locations near highways offer no counter service or seating.[62] In contrast, locations in high-density city neighborhoods often omit drive-through service.[63] There are also a few locations, mostly in downtown districts, that offer a "Walk-Thru" service in place of Drive-Thru.[64]

McCafé

See main article: McCafé. McCafé is a café-style accompaniment to McDonald's restaurants. The concept was created by McDonald's Australia, starting with Melbourne in 1993.[65]

"Create Your Taste" restaurants

From 2015 to 2016, McDonald's tried a more flexible burger service and restaurant concept based on other restaurants such as Shake Shack and Grill'd. It was rolled out for the first time in Australia in early 2015 and expanded to China, Hong Kong, Singapore, Arabia, and New Zealand, with ongoing trials in the US market. In dedicated "Create Your Taste" (CYT) kiosks, customers could choose all ingredients, including the type of bun and meat, along with optional extras. CYT food was served to the table on wooden boards, fries in wire baskets, and salads in china bowls with metal cutlery at a higher price. In November 2016, Create Your Taste was replaced by a "Signature Crafted Recipes" program designed to be more efficient and less expensive.[66]

PlayPlaces

See main article: McDonald's PlayPlace.

McDonald's playgrounds are called PlayPlaces. Some McDonald's in suburban areas and certain cities feature large indoor or outdoor playgrounds. The first PlayPlace with the familiar crawl-tube design with ball pits and slides was introduced in 1987 in the US, with many more being constructed soon after.

McDonald's Next

McDonald's Next uses open-concept design and offers "Create Your Taste" digital ordering. The concept store also offers free mobile device charging and table service after 6:00 pm. The first store opened in Hong Kong in December 2015.[67]

Other

Some locations are connected to gas stations and convenience stores,[68] while others called McExpress have limited seating or menu or may be located in a shopping mall. Other McDonald's are located in Walmart stores. McStop is a location targeted at truckers and travelers who may have services found at truck stops.[69]

In Sweden, Happy Meal boxes can be used as goggles,[70] with the game Slope Stars. In the Netherlands, McDonald's has introduced McTrax that doubles as a recording studio; it reacts to touch. They can create their own beats with a synth and tweak sounds with special effects.

On the river Elbe in Hamburg, Germany, is the world's only "McBoat," a float-through service (similar to drive-through) for people on the river.[71]

2006 redesign

In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of its restaurants, the first significant redesign since the 1970s.[72] [73] It resembles a coffee shop, with wooden tables, faux-leather chairs, and muted colors; the red was muted to terracotta, the yellow was shifted to golden for a more "sunny" look, and olive and sage green were added. The warmer look has less plastic and more brick and wood, with modern hanging lights for a softer glow. Many restaurants feature free Wi-Fi and flat-screen TVs. Other upgrades include double drive-thrus, flat roofs instead of the angled red roofs, and fiberglass instead of wood. Instead of the familiar golden arches, the restaurants feature "semi-swooshes" (half of a golden arch), similar to the Nike swoosh.[74]

Smoking ban

McDonald's began banning smoking in 1994 when it restricted customers from smoking within its 1,400 wholly owned restaurants.[75]

COVID-19 pandemic

As a result of the COVID-19 pandemic, McDonald's closed most seating and all play areas in its United States restaurants.[76] It transitioned to drive-thru and curbside orders at locations and online food ordering delivery services.[77] In July 2020, for the year's second quarter, McDonald's reported earnings of 66 cents per share. Compared to the same period of last year, it represented a fall of 68%.[78]

2023 redesign and new concept

See main article: CosMc's.

In July 2023, the company announced it was working towards a new fast-food brand called CosMc's that would be tested at ten sites. The first location was opened in December 2023 in Bolingbrook, Illinois, and the company is working to open nine restaurants in Texas by the end of 2024 as a test. The outlets will have a smaller real-estate footprint than regular McDonald's restaurants and are focused on selling coffee and other drinks to afternoon customers.[79]

The name for the new brand comes from CosMc, a McDonaldland mascot that appeared in advertisements in the late 1980s and early 1990s.[80] [81] [82]

McDonald's Employee Relations in the United States

See also: McDonald's and unions.

Automation

Since the late 1990s, McDonald's has attempted to replace employees with electronic kiosks that would perform actions such as taking orders and accepting money. In 1999, McDonald's first tested "E-Clerks" in suburban Chicago, Illinois, and Wyoming, Michigan, with the devices being able to "save money on live staffers" and attracting larger purchase amounts than average employees.[83]

In 2013, the University of Oxford estimated that in the succeeding decades, there was a 92% probability of food preparation and serving becoming automated in fast food establishments.[84] By 2016, McDonald's "Create Your Taste" electronic kiosks were seen in some restaurants internationally where customers could custom order meals. As employees pushed for higher wages in the late 2010s, some believed that fast food companies such as McDonald's would use the devices to cut costs for employing individuals.[85]

In 2017, McDonald's launched an app in the United States that allows customers to skip the ordering line inside or drive through and order online. Many McDonald's locations have special parking spaces for such orders.[86]

In September 2019, McDonald's purchased an AI-based start-up, Apprente, to replace human servers with voice-based technology in its US drive-throughs.[87]

In early 2023, McDonald's opened its first largely automated restaurant in Fort Worth, Texas. The restaurant in question would de-emphasize human contact when ordering, with employees available if there were problems but who would otherwise be absent from the ordering process (along with others working in the kitchen or other back-of-the-house roles). There was no seating in this restaurant.[88] [89]

Wages

On August 5, 2013, The Guardian revealed that 90 percent of McDonald's UK workforce are on zero-hour contracts, making it possibly the largest such private sector employer in the country.[90] In April 2017, due to employee strikes, they gave all employees the option of fixed contracts instead.[91] A study released by Fast Food Forward conducted by Anzalone Liszt Grove Research showed that approximately 84 percent of all fast food employees working in New York City in April 2013 had been paid less than their legal wages by their employers.[92] From 2007 to 2011, fast food workers in the U.S. drew an average of $7firstbillion of public assistance annually resulting from receiving low wages.[93] The McResource website advised employees to break their food into smaller pieces to feel fuller, seek refunds for unopened holiday purchases, sell possessions online for quick cash, and "quit complaining" as "stress hormone levels rise by 15 percent after ten minutes of complaining."[94] In December 2013, McDonald's shut down the McResource website amidst negative publicity and criticism. McDonald's plans to continue an internal telephone help line through which its employees can obtain advice on work and life problems.[95] The Roosevelt Institute, a liberal think tank, accuses some McDonald's restaurants of actually paying less than the minimum wage to entry positions due to "rampant" wage theft.[96] In South Korea, McDonald's pays part-time employees $5.50 an hour and is accused of paying less with arbitrary schedule adjustments and pay delays.[97] In late 2015, data collected anonymously by Glassdoor suggests that McDonald's in the United States pays entry-level employees between $7.25 an hour and $11 an hour, with an average of $8.69 an hour. Shift managers get paid an average of $10.34 an hour. Assistant managers get paid an average of $11.57 an hour.[98] McDonald's former CEO, Steve Easterbrook, earned an annual salary of $1,100,000.[99] His total compensation for 2017 was $21,761,052.[100]

Strikes

See also: Fast food worker strikes. McDonald's workers have occasionally decided to strike over pay levels, with most of the employees on strike seeking to be paid $15.00.[101] When interviewed about the strikes occurring, former McDonald's CEO Ed Rensi stated: "It's cheaper to buy a $35,000 robotic arm than it is to hire an employee who's inefficient making $15 an hour bagging french fries" with Rensi explaining that increasing employee wages could negatively affect entry-level job hiring.[102] However, according to Easterbrook, increasing wages and benefits for workers saw a 6% increase in customer satisfaction when comparing 2015's first quarter data to the first quarter of 2016, with greater returns seen as a result.[102] In September 2017, two British McDonald's stores agreed to a strike over zero-hours contracts for staff. Picket lines were formed around the two stores in Crayford and Cambridge. The strike was supported by then Leader of the Opposition Jeremy Corbyn.[103] [104]

Occupation

Workers at the McDonald's franchise at Saint-Barthélémy, Marseille, occupied the restaurant in protest against its planned closure. Employing 77 people, the restaurant is the second-biggest private sector employer in Saint-Barthélémy, which has an unemployment rate of 30 percent.[105] Lawyers for Kamel Guemari, a shop steward at the franchise, claimed an attempt was made to kill him when a car drove at him in the restaurant car park.[106] [107]

Working conditions

In March 2015, McDonald's workers in 19 U.S. cities filed 28 health and safety complaints with the U.S. Occupational Safety and Health Administration, which allege that low staffing, lack of protective gear, poor training, and pressure to work fast resulted in injuries. The complaints allege that, because of a lack of first aid supplies, workers were told by management to treat burn injuries with condiments such as mayonnaise and mustard.[108] The Fight for $15 labor organization aided the workers in filing the complaints.[109]

Animal welfare standards

In 2015, McDonald's pledged to stop using eggs from battery cage facilities by 2025. Since McDonald's purchases over 2 billion eggs per year or 4 percent of eggs produced in the United States, the switch is expected to have a major impact on the egg industry. It is part of a general trend toward cage-free eggs driven by consumer concern over the harsh living conditions of hens.[110] [111] The aviary systems from which the new eggs will be sourced are troubled by much higher mortality rates, as well as introducing environmental and worker safety problems.[112] The high hen mortality rate, which is more than double that of battery cage systems, will require new research to mitigate. The facilities have higher ammonia levels because feces are kicked into the air. Producers raised concerns about the production cost, which is expected to increase by 36 percent.[113]

McDonald's continues to source pork from facilities that use gestation crates, and in 2012 pledged to phase them out.[114] [115]

Corporate overview

Facts and figures

McDonald's restaurants are in 120 countries and territories and serve 68 million customers daily.[116] [117] There are 37,855 restaurants worldwide, employing more than 210,000 people as of the end of 2018. There are a total of 2,770 company-owned locations and 35,085 franchised locations, which includes 21,685 locations franchised to conventional franchisees, 7,225 locations licensed to developmental licensees, and 6,175 locations licensed to foreign affiliates.

Focusing on its core brand, McDonald's began divesting itself of other chains it had acquired during the 1990s. The company owned a majority stake in Chipotle Mexican Grill until October 2006, when McDonald's fully divested from Chipotle through a stock exchange.[118] [119] Until December 2003, it owned Donatos Pizza, and it owned a small share of Aroma Café, from 1999 to 2001. On August 27, 2007, McDonald's sold Boston Market to Sun Capital Partners.[120]

McDonald's has increased shareholder dividends for 25 consecutive years,[121] making it one of the S&P 500 Dividend Aristocrats.[122] The company is ranked 131st on the Fortune 500 of the largest United States corporations by revenue.[123] In October 2012, its monthly sales fell for the first time in nine years.[124] In 2014, its quarterly sales fell for the first time in seventeen years, when its sales dropped for the entirety of 1997.[125]

In the United States, it is reported that drive-throughs account for 70 percent of sales.[126] [127] McDonald's closed down 184 restaurants in the United States in 2015, which was 59 more than what they planned to open.[128] [129] This move was the first time McDonald's had a net decrease in the number of locations in the United States since 1970.

The McDonald's on-demand delivery concept, which began in 2017 with a partnership with Uber Eats and added DoorDash in 2019 (with select locations adding Grubhub in 2021), accounts for up to 3% of all business as of 2019.[130]

The $100 billion in sales generated by McDonald's company-owned and franchise restaurants in 2019 accounts for almost 4% of the estimated $2.5 trillion global restaurant industry.[131]

Business trends

The key trends for the McDonald's Corp. are (as of the financial year ending December 31):[132] [133]

YearRevenue
in billion US$		Net income
in billion US$		Total assets
in billion US$		Locations
[134] 		Employees
(k)[135] [136]
200519.12.629.9447[137]
200620.83.528.931,046465
200722.72.329.331,377390
200823.54.328.431,967400[138]
200922.74.530.232,478385[139]
201024.04.931.932,737400[140]
201127.05.532.933,510420[141]
201227.55.435.334,480440[142]
201328.15.536.635,429440[143]
201427.44.734.236,258420[144]
201525.44.537.936,525420[145]
201624.64.631.036,899375[146]
201722.85.133.837,241235[147]
201821.05.932.837,855210[148]
201921.06.047.538,695205[149]
202019.24.752.639,198200[150]
202123.27.553.640,031200[151] [152]
202223.16.150.440,275150[153]
202325.48.456.141,822150

Business model

The company owns all the land on which its restaurants are situated, which is valued at an estimated $16 to $18 billion. The company earns a significant portion of its revenue from rental payments from franchisees. These rent payments rose 26 percent between 2010 and 2015, accounting for one-fifth of the company's total revenue at the end of the period.[154] In recent times, there have been calls to spin off the company's U.S. holdings into a potential real estate investment trust, but the company announced at its investor conference on November 10, 2015, that this would not happen. CEO Steve Easterbrook discussed that pursuing the REIT option would pose too large a risk to the company's business model.[155]

The United Kingdom and Ireland business model differs from the U.S. in that fewer than 30 percent of restaurants are franchised, with the majority under the company's ownership. McDonald's trains its franchisees and management at Hamburger University at its Chicago headquarters.[156] [157] In other countries, McDonald's restaurants are operated by joint ventures of McDonald's Corporation and other, local entities or governments.[158]

According to Fast Food Nation by Eric Schlosser (2001), nearly one in eight workers in the U.S. have at some time been employed by McDonald's. Employees are encouraged by McDonald's Corp. to maintain their health by singing along to their favorite songs to relieve stress, attending church services to have a lower blood pressure, and taking two vacations annually to reduce the risk for myocardial infarction.[159] Fast Food Nation states that McDonald's is the largest private operator of playgrounds in the U.S., as well as the single largest purchaser of beef, pork, potatoes, and apples. The selection of meats McDonald's uses varies to some extent based on the host country's culture.[160]

In 2021, the company cut value meals and cheaper items from its menu as part of a focus on higher-priced items.[161] [162] [163]

Headquarters

On June 13, 2016, McDonald's confirmed plans to move its global headquarters to Chicago's West Loop neighborhood in the Near West Side. The 608,000-square-foot structure opened on June 4, 2018, and was built on the former site of Harpo Productions (where The Oprah Winfrey Show and several other Harpo productions taped).

The McDonald's former headquarters complex, McDonald's Plaza, is in Oak Brook, Illinois. It sits on the site of the former headquarters and stabling area of Paul Butler, the founder of Oak Brook.[164] McDonald's moved into the Oak Brook facility from an office within the Chicago Loop in 1971.[165]

Board of directors

, the board of directors had the following members:[166]

On March 1, 2015, after being chief brand officer of McDonald's and its former head in the UK and northern Europe, Steve Easterbrook became CEO, succeeding Don Thompson, who stepped down on January 28, 2015.

In November 2019, McDonald's board of directors voted to remove Easterbrook as CEO since he had violated corporate policies on personal conduct by entering into a relationship with a company employee.[167] He was replaced as CEO by Chris Kempczinski, who had been president of McDonald's USA.[168]

In August 2022, McDonald's announced significant changes to its board. It said that existing director Sheila Penrose, chair of JLL Inc., would retire and that Anthony Capuano, CEO of Marriott International, executive vice president and worldwide chairman of pharmaceuticals Jennifer Taubert of Johnson & Johnson, and Amy Weaver president and CFO of Salesforce would join. The changes were unrelated to an effort by activist investor Carl Icahn.[169] [170] [171]

Ownership

The ten largest shareholders of McDonald's on December 30, 2023, were:[172]

Shareholder namePercentage
The Vanguard Group9.56%
BlackRock7.19%
State Street Corporation4.82%
JP Morgan Chase2.28%
Geode Capital Management2.05%
Bank of America1.96%
Morgan Stanley1.86%
Wellington Management Company1.63%
Norges Bank1.25%
Northern Trust1.23%
Others66.17%

Global operations

See also: List of countries with McDonald's restaurants and International availability of McDonald's products. McDonald's has become emblematic of globalization, sometimes referred to as the "McDonaldization" of society. The Economist newspaper uses the "Big Mac Index": the comparison of the cost of a Big Mac in various world currencies can be used to informally judge these currencies' purchasing power parity. Switzerland has the most expensive Big Mac in the world as of July 2015, while the country with the least expensive Big Mac is India[173] [174] (albeit for a Maharaja Mac—the next cheapest Big Mac is Hong Kong).[175] The northernmost McDonald's restaurant in the world is located in Rovaniemi, Finland (after the restaurant in Murmansk, Russia was closed in 2022),[176] however from January 2024 this will change again as McDonald's is opening a new restaurant in Tromsø, Norway.[177] And the southernmost in the world is located in Invercargill, New Zealand.[178]

Thomas Friedman said that no country with a McDonald's had gone to war with another;[179] [180] however, the "Golden Arches Theory of Conflict Prevention" is incorrect. Exceptions are the 1989 United States invasion of Panama, NATO's bombing of Serbia in 1999, the 2006 Lebanon War, and the 2008 South Ossetia war—McDonald's suspended operations in its corporate-owned stores in Crimea after Russia annexed the region in 2014.[181] On August 20, 2014, as tensions between the United States and Russia strained over the Russian annexation of Crimea, and the resultant U.S. sanctions, the Russian government temporarily shut down four McDonald's outlets in Moscow, citing sanitary concerns. The company has operated in Russia since 1990 and, in August 2014, had 438 stores across the country.[182] On August 23, 2014, Russian Deputy Prime Minister Arkady Dvorkovich ruled out any government move to ban McDonald's and dismissed the notion that the temporary closures had anything to do with the sanctions.[183]

Some observers have suggested that the company should be given credit for increasing the service standard in markets it enters. A group of anthropologists in a study entitled Golden Arches East[184] looked at McDonald's impact on East Asia and Hong Kong, particularly. When it opened in Hong Kong in 1975, McDonald's was the first restaurant to consistently offer clean restrooms, driving customers to demand the same of other restaurants and institutions. McDonald's has partnered with Sinopec, the second largest oil company in the People's Republic of China, as it takes advantage of the country's growing use of personal vehicles by opening numerous drive-thru restaurants.[185]

In Beijing, China, McDonald's restaurants are state-owned enterprises operating according to franchise agreements.[186] Beijing Capital Agricultural Group owns these franchises.

McDonald's has opened a McDonald's restaurant and McCafé on the underground premises of the French fine arts museum, The Louvre.[187]

The company stated it would open vegetarian-only restaurants in India by mid-2013.[188]

On January 9, 2017, 80% of the franchise rights in mainland China and Hong Kong were sold for US$2.08 billion to a consortium of CITIC Limited (for 32%). Private equity funds managed by CITIC Capital (for 20%) and Carlyle (for 20%), which CITIC Limited and CITIC Capital would form a joint venture to own the stake.[189]

On March 8, 2022, McDonald's temporarily closed their 850 locations in Russia due to the invasion of Ukraine, but will continue to pay the salary for 62,000 employees. Approximately nine percent of global revenue and three percent of operating profit come from Russia and 100 locations in Ukraine.[190] [191] [192]

On May 16, 2022, McDonald's announced that the closures would become permanent and that it was selling all its 850 stores in Russia. Furthermore, 32 years after McDonald's entered the Soviet market, the American giant wants its current business to be "de-Arched," the company plans to retain its trademarks in Russia, meaning the locations would no longer be allowed to use the McDonald's name, logo, or menu. McDonald's also said it would continue to pay its Russian employees until the sale is finalized. The company has more than 60,000 Russian employees.[193] [194] [195]

On June 10, 2022, a Russian McDonald's buyer announced a new logo as an attempt at rebranding. It featured one circle and two lines representing a burger and two french fries.[196] The business was rebranded as Vkusno i tochka, which roughly translates to "Tasty – Period."[197] [198] [199]

McDonald's will reopen its stores in Ukraine after closing them in February in non-contested areas like Kyiv and Western Ukraine. During the closure, McDonald's continued paying its employees, numbering some 10,000. Before the conflict, Ukraine had approximately 109 restaurants; it is unclear how many will reopen.[200]

On November 11, 2022, McDonald's in Belarus announced that all 25 stores in 6 cities would rebrand and operate as Vkusno i tochka "in several weeks."[201]

In Kazakhstan, McDonald's suspended operations in November 2022 due to the impossibility of supplying minced meat from Russia. The franchise was transferred to Food Solutions KZ, after which the restaurants first changed their name to "We are open" (Біз ашықпыз); in August 2023, they were renamed in honor of the best employees, and in November 2023 the final rebranding was carried out. The network is now called I'M, with a heart sign used instead of a dot over the I.[202]

Marketing and advertising

McDonald's has maintained an extensive advertising campaign for decades. In addition to the usual media (television, radio, and newspaper), the company makes significant use of billboards and signage. Also, it sponsors sporting events ranging from Little League to the FIFA World Cup and Olympic Games.[203] Television has been central to the company's advertising strategy.[204] To date, McDonald's has used 23 different slogans in United States advertising, as well as a few other slogans for select countries and regions.[205]

Children's advertising

See main article: Ronald McDonald and McDonaldland.

Celebrity endorsements

In 1992, basketball player Michael Jordan became the first celebrity to have a McDonald's value meal named after him. The "McJordan," a Quarter Pounder with pickles, raw onion slices, bacon, and barbecue sauce, was available at Chicago franchises.[206]

In March 2014, a unique "Sprite 6 Mix by LeBron James" flavor of Sprite featuring the flavors of lemon-lime, orange, and cherry debuted just before the NBA playoffs.[207] James' endorsement of Sprite has also included the seasonal "cranberry" and "winter-spiced cranberry" editions of the beverage. James' deal with Coca-Cola and Sprite ended in 2020, with a new partnership with Pepsi and Mountain Dew launching in 2021.[208]

In September 2020, McDonald's partnered with rapper Travis Scott to release the "Travis Scott Meal," a Quarter Pounder with cheese, bacon, lettuce, pickles, ketchup, and mustard; medium fries with barbecue sauce; and a Sprite, nationwide. Scott designed new uniforms for McDonald's employees and released Cactus Jack merchandise using vintage visuals from the fast food chain's history.[209] The company followed up with the "J Balvin Meal", a Big Mac with no pickles; fries with ketchup; and an Oreo McFlurry, in a partnership with reggaeton singer J Balvin.[210] LeBron James has been a spokesman for McDonald's from 2003 to 2017[211] while co-endorsing Coca-Cola-Sprite since early in his career.[212]

In 2021, McDonald's partnered with Korean boy group BTS to release the "BTS Meal" in 50 countries around the world, starting on May 26 in select countries. The meal consists of a 10-piece Chicken McNuggets, medium fries, medium Coke, and for the first time in the United States, two spicy dipping sauces: Sweet Chili and Cajun.[213]

Space exploration

McDonald's and NASA explored an advertising agreement for a planned mission to the asteroid 449 Hamburga; however, the spacecraft was eventually canceled.[214]

Sponsorship in NASCAR

McDonald's entered the NASCAR Cup Series in 1977, sponsoring Richard Childress for one race. Between the years 1977 and 1986, McDonald's would only sponsor a handful of races in a season. In 1993, McDonald's became the full-time sponsor for the No. 27 Junior Johnson & Associates Ford, driven by Hut Stricklin.[215] In 1994, Stricklin was replaced in the car by Jimmy Spencer, who would go on to win twice that season. The following season McDonald's would move over to the No. 94 Bill Elliott Racing Ford, driven by team-owner Bill Elliott.[216] McDonald's stayed with Elliott until the 2001 season when they moved again, this time to the No. 96 PPI Motorsports Ford, driven by rookie Andy Houston. However, when the team failed to field a car for the entire season, McDonald's became absent from NASCAR until 2004, when it joined Evernham Motorsports as a part-time sponsor for drivers Elliott, Kasey Kahne, Elliott Sadler, A. J. Allmendinger, and Reed Sorenson until 2010.

During the 2010 season, McDonald's would enter its longest partnership with a team at Chip Ganassi Racing, sponsoring the No. 1 Chevrolet driven by Jamie McMurray until his final race in the 2019 Daytona 500.[217] [218] McDonald's moved to CGR's No. 42 of Kyle Larson, whom the company sponsored until his suspension in 2020,[219] and also had a one-race partnership with Richard Petty Motorsports' No. 43 Chevrolet driven by Bubba Wallace in 2019 and 2020.[220] [221] McDonald's continued working with the No. 42 under new driver Ross Chastain in 2021 and also joined Wallace's new team 23XI Racing as a "founding partner".[222] [223]

Sports awards and honors

McDonald's is the title sponsor of the McDonald's All-American Game, an all-star basketball game played each year for the top-ranked amateur boys' and girls' high school basketball graduates in America.

Charity

See also: Ronald McDonald House Charities.

McHappy Day

McHappy Day is an annual event at McDonald's, during which a percentage of the day's sales go to charity. It is the signature fundraising event for Ronald McDonald House Charities.[224]

In 2007, it was celebrated in 17 countries: Argentina, Australia, Austria, Brazil, Canada, England, Finland, France, Guatemala, Hungary, Ireland, New Zealand, Norway, Sweden, Switzerland, the United States, and Uruguay.

According to the Australian McHappy Day website, McHappy Day raised $20.4 million in 2009. The goal for 2010 was $20.8firstmillion.[225]

McDonald's Monopoly donation

In 1995, St. Jude Children's Research Hospital received an anonymous letter postmarked in Dallas, Texas, containing a $1 million winning McDonald's Monopoly game piece. McDonald's officials came to the hospital, accompanied by a representative from the accounting firm Arthur Andersen, who examined the card under a jeweler's eyepiece, handled it with plastic gloves, and verified it as a winner.[226] Although game rules prohibited the transfer of prizes, McDonald's waived the rule. They made the annual $50,000 annuity payments for the entire 20-year period through 2014, even after learning that the piece was sent by an individual involved in an embezzlement scheme intended to defraud McDonald's.

McRefugee

See also: McRefugee.

McRefugees are poor people in Hong Kong, Japan, and China who use McDonald's 24-hour restaurants as a temporary hostel.[227]

Criticism

See main article: Criticism of McDonald's. McDonald's has been criticized for numerous aspects of its business, including its products' health effects, employees' treatment, and other business practices. In the late 1980s, Phil Sokolof, a millionaire businessman who had suffered a heart attack at the age of 43, took out full-page newspaper ads in New York, Chicago, and other large cities accusing McDonald's menu of being a threat to American health and asking them to stop using beef tallow to cook their french fries.[228]

In 1990, activists from a small group known as London Greenpeace (no connection to the international group Greenpeace) distributed leaflets entitled What's wrong with McDonald's?, criticizing its environmental, health, and labor record. The corporation wrote to the group demanding they desist and apologize, and, when two of the activists refused to back down, sued them for libel leading to the "McLibel case," one of the longest cases in English civil law. A documentary film of the McLibel Trial has been shown in several countries.[229]

In 2001, Eric Schlosser's book Fast Food Nation included criticism of the business practices of McDonald's, particularly concerning its use of political influence and targeting advertisements to children.[230] In 2002, vegetarian groups, largely Hindu and Buddhist, successfully sued McDonald's for misrepresenting its french fries as vegetarian, when they contained beef broth.[231]

Critical terms such as "McJob" and "McMansion" have been added to dictionaries.[232] [233] [234]

Morgan Spurlock's 2004 documentary film Super Size Me claimed that McDonald's food was contributing to the increase of obesity in society and that the company was failing to provide nutritional information about its food for its customers. Six weeks after the film premiered, McDonald's announced that it was eliminating the super size option and was creating the adult Happy Meal.

Litterstudies have found McDonald's is one of the most littered brands worldwide. In 2012, a Keep Australia Beautiful study found that McDonald's was the most littered brand in Queensland.[235] [236]

In response to public pressure, McDonald's has sought to include more healthy choices in its menu, announcing in May 2008 that, in the United States and Canada, it has switched to using cooking oil that contains no trans fats for its french fries, and canola-based oil with corn and soy oils, for its baked items, pies, and cookies, by the end of 2018.[237] The company introduced a new slogan to its recruitment posters: "Not bad for a McJob."[238] Since McDonald's began receiving criticism for its environmental practices in the 1970s, it has significantly reduced its use of materials.[239]

Amidst the 2023 Israel-Gaza war, as the Israeli blockade restricted supplies to Gaza, McDonald's in Israel faced condemnation for providing free meals to the Israel Defense Forces, who were accused of engaging in war crimes against Palestinians.[240] [241] [242] [243] The hashtag #BoycottMcDonalds gained worldwide traction on social media.[244] There were also large gathering outside restaurants in Lebanon and Egypt protesting the move. McDonald's in other countries, like Turkey and Pakistan, distanced themselves from the Israeli brand.[245] [246] In April 2024, according to Arutz Sheva that the global McDonald's corporation is seeking to acquire all of the chain's branches in Israel from the local franchisee.[247]

In January 2024, McDonald's CEO Chris Kempczinski acknowledged the public outcry, stating, "Several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald's."[248]

Legal cases

See main article: McDonald's legal cases.

McDonald's has been involved in several lawsuits and other legal cases, most involving trademark disputes. The company has threatened many food businesses with legal action unless it drops the 'Mc' or 'Mac' from trading names.

European Union

In April 2017, Irish fast-food chain Supermac's submitted a request to the European Union Property Office to cancel McDonald's owned trademarks within the European Union, claiming that McDonald's engaged in "trademark bullying; registering brand names... which are simply stored away in a war chest to use against future competitors", after the trademarks had prevented Supermac's from expanding out of Ireland. The EUIPO ruled in Supermac's favor, finding that McDonald's "has not proven genuine use" of many trademarks, canceling McDonald's owned trademarks such as "Big Mac" and specific "Mc"-related trademarks within the European Union.[249] [250] [251]

Burger King responded by "trolling" McDonald's by giving their burgers names that included the words "Big Mac" that also mocked the original burger, which included "Like a Big Mac But Juicier," "Like a Big Mac, But Actually Big" and "Big Mac-ish But Flame-Grilled of Course."[252]

In 2023, the EUIPO Board of Appeal partially annulled their decision after McDonald's filed 700 pages of additional evidence despite objections.[253] However, on further appeal to the European Court of Justice, the court ruled in 2024 that McDonald's had failed to prove the use of the Big Mac trademark in relation to chicken products or services associated with operating restaurants, meaning Supermac's and other businesses are now free to use the "Mac" in their business names and in names for poultry products in Europe. McDonald's retains the Big Mac trademark solely for its beef burgers.[254] [255] [256]

The McDonald's group has had proceedings taken against it by the French Tax Authorities, with possible charges of criminal tax fraud. In July 2022, the group reached an agreement with the French judicial authorities to end criminal proceedings for tax fraud.[257]

Malaysia

On September 8, 2009, McDonald's Malaysian operations lost a lawsuit to prevent another restaurant from calling itself McCurry. McDonald's lost in an appeal to Malaysia's highest court, the Federal Court.[258] On December 29, 2016, McDonald's Malaysia issued a statement that said only certified halal cakes are allowed inside its restaurants nationwide.[259]

Australia

In April 2007, in Perth, Western Australia, McDonald's pleaded guilty to five charges relating to the employment of children under 15 in one of its outlets and was fined A$8,000.[260]

United Kingdom

The longest-running legal action of all time in the UK was the McLibel case against two defendants who criticized several aspects of the company. The trial lasted ten years and called 130 witnesses. The European Court of Human Rights deemed that the unequal resources of the litigants breached the defendants' rights to freedom of speech and biased the trial. The result was widely seen as a "PR disaster" for McDonald's.[261]

In the end of November 2013, controversy arose after the Rucka Rucka Ali song "Only 17", a parody of "Just a Dream" by Nelly, was accidentally played uncensored over the speakers at a McDonald's restaurant in Wales.[262] [263] Subsequently, McDonald's issued an apology to the offended customers.[264] That same week, Rucka Rucka Ali responded to the controversy on his YouTube channel by jokingly demanding a personal apology from the restaurant.[265]

In 2021, it emerged that at least 50 employees had filed charges against the chains regarding harassment in the workplace in five years, leading to the company instituting anti-harassment training. Some of the complainants also stated that they were verbally and physically harassed in retaliation for their complaints.[266] In 2023, the BBC conducted an investigation, and reported that more than 100 current and recent UK workers at outlets of the fast-food chain allege there is a continuing toxic culture of sexual assault, harassment, racism and bullying.[267]

United States

The 1994 court case Liebeck v. McDonald's Restaurants examined a McDonald's practice of serving coffee so hot that when spilled, it caused third degree burns requiring weeks of hospitalization and skin grafting surgery.[268] [269] The trial outcome was an award of $2.86 million (equivalent to $ million in) for the plaintiff, 81-year old Stella Liebeck.[268] [269] The amount was later reduced to $640,000 (equivalent to $ million in). In 2019, a McDonald's employee, Jenna Ries, sued the restaurant chain over allowing sexual harassment in the workplace and described the working environment as "toxic."[270]

In 2023, an investigation by the United States Department of Labor found child labor violations at McDonald's franchises in the state of Kentucky, which involved over 300 children, two of them 10-year-olds. A total of $212,000 was levied against three franchises for the violations.[271] Further investigations uncovered child labor violations involving 83 minors at 16 different locations in Louisiana and Texas, with imposed fines amounting to $77,572.[272]

McDonald's has been criticized for shrinkflation, colloquially dubbed "McFlation," with increases in menu prices far exceeding inflation.[273] [274] [275] [276]

As of 2024, Israeli–Palestinian conflict, McDonald's has experienced a decline in profits due to a global boycott. The boycott started after McDonald's Israel pledged to donate meals to the soldiers of Israel Defense Forces. As a result of the BDS movement, McDonald's bought all 225 Israel owned franchise restaurants.[277] [278]

See also

Further reading

Notes and References

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  2. Web site: Maze . Jonathan . Why McDonald's won't ever get rid of its real estate . Nation's Restaurant News . November 23, 2021 . en . February 26, 2015 . July 26, 2022 . https://web.archive.org/web/20220726070031/https://www.nrn.com/blog/why-mcdonalds-wont-ever-get-rid-its-real-estate . live .
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  4. News: Samantha. Bomkamp. June 13, 2016. Mcdonald's HQ Move Is Boldest Step Yet in Effort to Transform Itself. Chicago Tribune. May 1, 2017. June 28, 2023. https://web.archive.org/web/20230628040752/https://www.chicagotribune.com/business/ct-mcdonalds-chicago-headquarters-0614-biz-20160609-story.html. live.
  5. Web site: Why You're Technically Not Able To Order A Milkshake At McDonald's . Daily Meal . September 9, 2023 . September 20, 2023 . September 13, 2023 . https://web.archive.org/web/20230913024404/https://www.thedailymeal.com/1388708/order-milkshake-at-mcdonalds/ . live .
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  275. News: STUDY: McDonald's prices have increased by over 100% in the last decade . 14 May 2024 . WKRC . 3 April 2024 . en.
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