McDonald's

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## McDonald's Corporation

### Traded as

NYSE: MCDDJIA componentS&P 100 componentS&P 500 component

### Founded

May 15, 1940; 83 years ago in San Bernardino, California, U.S.

### Key People

Enrique Hernandez Jr. (chairman)Chris Kempczinski (president & CEO)

### Products

Hamburgerschickenfrench friessoft drinkssoft servesshakessaladsdessertshotcakecoffeebreakfast wraps

**McDonald's Corporation** is an American fast food company, 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 proceeded to purchase the chain from the McDonald brothers. McDonald's had its original headquarters in Oak Brook, Illinois, but moved its global headquarters to Chicago in June 2018.

McDonald's is the world's largest restaurant chain by revenue, serving over 69 million customers daily in over 100 countries across 37,855 outlets as of 2018. Although McDonald's is best known for its hamburgers, cheeseburgers and french fries, they feature chicken products, breakfast items, soft drinks, milkshakes, wraps, and desserts. In response to changing consumer tastes and a negative backlash because of the unhealthiness of their food, the company has added to its menu salads, fish, smoothies, and fruit. The McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants. According to two reports published in 2018, McDonald's is the world's second-largest private employer with 1.7 million employees (behind Walmart with 2.3 million employees).

## Products

A typical "eat-in" McDonald's meal as sold in Hong Kong, consisting of French fries, a soft drink, and a "main product" – in this case, a McSpicy Chicken Fillet. Condiments are supplied in small packets; such a packet of tomato ketchup is seen in the foreground.
McDonald's predominantly sells hamburgers, various types of chicken, chicken sandwiches, French fries, soft drinks, 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.

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, 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, replacing chicken skin, safflower oil and citric acid found in Chicken McNuggets with pea starch, rice starch and powdered lemon juice.

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. Nevertheless, the pickles will still be made with an artificial preservative, although customers can choose to opt out of getting pickles with their burgers.

In November of 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. This announcement came after the successful testing of Beyond Meat plant based meat substitutes.

### International menu variations

McDonald's is known for tailoring its menus in different markets to cater to local tastes
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).

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

In the United States and Canada, after limited trials on a regional basis, McDonald's began offering in 2015 and 2017, respectively, a partial breakfast menu during all hours its restaurants are open.

## Restaurants

### Types of restaurants

Most standalone McDonald's restaurants offer both counter service and drive-through service, with indoor and sometimes outdoor seating. 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, though the latter two steps are frequently combined; it was first introduced in Sierra Vista, Arizona in 1975, following the lead of other fast-food chains. The first such restaurant in Britain opened at Fallowfield, Manchester in 1986.

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.

#### McDrive

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

#### McCafé

McCafé is a café-style accompaniment to McDonald's restaurants. The concept was created by McDonald's Australia, where it is marketed as Macca's, starting with Melbourne in 1993. As of 2016, most McDonald's in Australia have McCafés located within the existing McDonald's restaurant. In Tasmania, there are McCafés in every restaurant, with the rest of the states quickly following suit. After upgrading to the new McCafé look and feel, some Australian restaurants have noticed up to a 60 percent increase in sales. At the end of 2003, there were over 600 McCafés worldwide.

#### "Create Your Taste" restaurants

From 2015 to 2016, McDonald's tried a new gourmet burger service and restaurant concept based on other gourmet restaurants such as Shake Shack and Grill'd. It was rolled out for the first time in Australia during the early months of 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 type of bun and meat along with optional extras. In late 2015 the Australian CYT service introduced CYT salads.

After a person had ordered, McDonald's advised that wait times were between 10 and 15 minutes. When the food was ready, trained crew ('hosts') brought the food to the customer's table. Instead of McDonald's usual cardboard and plastic packaging, CYT food was presented on wooden boards, fries in wire baskets and salads in china bowls with metal cutlery. A higher price applied.

In November 2016, Create Your Taste was replaced by a "Signature Crafted Recipes" program designed to be more efficient and less expensive.

#### Other

Some locations are connected to gas stations and convenience stores, while others called McExpress have limited seating and/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 which may have services found at truck stops.

In Sweden, customers who order a happy meal can use the meal's container for a pair of goggles. The company created a game for the goggles known as *Slope Stars*. " McDonald's predicts happy goggles will continue in other countries. 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.

#### Special diet

The first kosher McDonald's was established in 1997 at the Abasto de Buenos Aires mall in Buenos Aires, Argentina. There are many kosher branches in Israel.

#### Playgrounds

McDonald's playgrounds are called McDonald's PlayPlace. 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 use open-concept design and offer "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.

### 2006 redesign

An American McDonald's in Mount Pleasant, Iowa in June 2008; this is an example of the "new" look of American McDonald's restaurants
In 2006, McDonald's introduced its "Forever Young" brand by redesigning all of its restaurants, the first major redesign since the 1970s.

The goal of the redesign is to be more like a coffee shop, similar to Starbucks. The design includes 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 also added.

To create a warmer look, the restaurants have less plastic and more brick and wood, with modern hanging lights to produce 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 replacing fiber glass with wood. Instead of the familiar golden arches, the restaurants feature "semi-swooshes" (half of a golden arch), similar to the Nike swoosh.

### Smoking ban

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

### COVID-19 pandemic

A curbside pickup at a McDonald's drive-thru during the 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. It transitioned to drive-thru and curbside orders at locations and online food ordering delivery services.

Restaurants in a number of countries including France, Italy, Spain, the United Kingdom and Republic of Ireland were temporarily closed. Some of these closed restaurants have now re-opened for drive-thru/delivery service only with menu limitations and spend caps. In other countries including Australia, Germany and Canada restaurants did not close but were limited to providing drive-thru, takeaway and/or delivery only.

McDonald's Australia was forced to close 11 Melbourne restaurants temporarily after staff came into contact with a delivery driver who tested positive for COVID-19.

The re-opening of McDonald's restaurants for drive-thru in the United Kingdom generated significant queues of traffic throughout the country. Avon and Somerset Police warned long lines of traffic could "cause accidents" and Warwickshire Police criticized the queues as "dangerous". In July 2020, for the years'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%.

## Subsidiaries

### Fast Food Restaurants

* **McCafé** (1993-present)
* **McDonald's** (1940-present)

### Playground Brands

* **McDonald's PlayPlace** (1971-present)

### Training Facilities

* **Hamburger University** - launched in 2018

### Gosh Enterprises, LLC (acquired minority stake in 2016)

* **Bibibop Asian Grill** - created in 2018
* **Charleys Cheesesteaks** - owns minority stake since 2016
* **Lennys Grill & Subs** - Acquired in 2019

### Locale Brands (formed in 2023 from Sears Alliance assets acquisition)

* **Boston Market** () - originally divested in 2017; re-acquired in 2023
* **Chipotle Mexican Grill** - originally divested in 2017; re-acquired in 2023
* **Farmesa** - created in 2023
* **Pizzeria Locale** - originally divested in 2017; reacquired in 2023
* **Soul Daddy** - originally divested in 2017; reacquired in 2023
* **Tasty Made** - originally divested in 2017; reacquired in 2023

### McDonald's New Zealand Ltd (wholly-owned)

* **Georgie Pie** (1996-present) - Acquired in 1996

### McStop Holdings, LLC (sold 50% stake to Love's in 2013)

* **McStop** - travel plazas; launched in 1984

### Red Robin Gourmet Burgers, Inc. (acquired minority stake in 2020)

* **Donatos Pizza** - pizzeria chain; McDonald's originally divested in 2003, Red Robin owns minority stake since 2018
* **Red Robin** - casual dining restaurant chain
* **Red Robin Express** - quick-service restaurant chain; launched in 2016

### Seed Restaurant Group, LLC (acquired in 2022)

* **Fazoli's** (1988-present) - Italian fast food chain

## See also

* Leaps & Bounds
* McDonald's/Locations