McDonald's franchisees are pushing back against spending $800,000 each to remodel their restaurants, part of the company's $8.5 billion plan unveiled at its investor day in Chicago, according to a Bloomberg report. Franchisees are balking at the cost because they operate as small business owners and traffic is weak, with no clear sign of a turnaround. Guggenheim analyst Gregory Frankfurt has flagged the tension, and he does not expect US same-store sales to turn positive again until next year, when he sees only about a 1.9% increase; he forecasts negative US same-store sales in both the third and fourth quarters. The report and the analyst note come after a disappointing second quarter, and there is no indication that year end will be materially better than the first half financially for McDonald's. Yahoo Finance Executive Editor Brian Sozzi named McDonald's CEO Chris Kempczinski the second member of his Wall of Underperformers, citing the stock's underperformance versus the S&P 500 and Dow since he became CEO in November 2019.
McDonald’s CorporationFranchisees resist $800,000 remodels in the $8.5B plan, and analyst sees negative US same-store sales through year-end after a weak Q2.
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