Good morning, and welcome to McDonald's 2026 Investor Day. Thank you to everyone for joining us, whether here at our headquarters in Chicago or via our live stream. Just a couple of housekeeping items before we get started. As many of you are aware, we issued a press release this morning summarizing highlights from today's presentation. We will post key slides from the presentation on our website. Also, please note that the forward-looking statements on our press release and 8-K filing also apply to our comments in the presentation today. Those documents will be available on our website, as will reconciliations of non-GAAP financial measures in today's presentation, along with their corresponding GAAP measures. This morning we will take you through our strategy to drive growth and productivity. We will then close out our webcast with a Q&A session. With that, we are ready to begin.
Please welcome McDonald's Chairman and CEO, Chris Kempczinski.
Good morning, everyone. On behalf of the global senior leadership team, welcome to McDonald's Investor Day. We have got an exciting day planned. I also hope you are hungry. We are going to start this morning in Chicago at our headquarters, where Speedee Labs, our global innovation center, tested and validated many of the ideas you are going to hear about today. During lunch, our guests joining in person will taste new and upgraded menu items, and afterwards we are going to head to a top-secret warehouse location to show you the McDonald's restaurant of the future. We will end the day back here at our headquarters with a reception featuring some of our key leaders from around the world. Throughout it all, you will be hearing about McDonald's > NEXT, our plan to unlock the next chapter of growth and productivity to drive system and shareholder returns.
A strategic plan to further separate McDonald's from the rest of the industry. We have set our ambitions high because McDonald's is a company like no other. Every day, we serve more than 70 million customers. Our menu is iconic, reflected by our $17 billion brands. Nearly 220 million customers regularly use our app and participate in our loyalty program, making it one of the largest in the world. This provides us with more data and better insights than anyone else, an asset particularly valuable for training new AI capabilities. We have unrivaled buying power across our supply chain, and of course, our financial strength enables us to make big bets. After more than 70 years, the McDonald's brand has remained as vibrant as ever. As you will hear today, our opportunities are massive.
Our founder, Ray Kroc, he had a great line which captured the restless ambition of our system: If you're not green and growing, you're ripe and rotting. Ray had a point. That mindset has shaped McDonald's for generations. We never stood still, and today is no different. That's exactly what we've done throughout our history. To understand where we're going, it's important to reflect on where we've been. Six years ago, in 2020, we launched Accelerating the Arches. The strategy was born out of the challenges and opportunities posed by the global COVID pandemic, along with conditions unique to McDonald's. We focused our system on our three growth pillars, our MCDs, as we called them. First was to maximize our marketing.
We own one of the world's most valuable brands, and we saw a big opportunity to better connect our brand to culture, which we did through highly successful campaigns like Famous Orders and partnerships like Minecraft. Second was to commit to our core menu. This would simplify operations and recenter our marketing investment against our most beloved equities. Since we made that commitment, we've grown core menu sales more than 50%, and in the U.S., gained significant share in beef and chicken. Third was to double down on the four Ds of drive-thru, delivery, digital, and development. We anticipated that customers would increasingly favor takeaway service channels, and the phone would become the starting point for more orders. Today, sales initiated on the phone represent about 40% of total system-wide sales across our top five markets.
After years of limited new restaurant growth in our own markets, we also saw the opportunity to accelerate our pace to fill in seams where we were under-penetrated. Since then, we've added more than 6,000 restaurants, the fastest pace in our history, with more to come on our way to 50,000 restaurants. The strategy worked and shareholders were rewarded. McDonald's stock has outperformed our peers with less risk than the sector overall. Even as we stepped up our investment in the business, we continued to return significant cash to shareholders. Since 2020, we've delivered $24 billion in dividends and $14 billion in share repurchases. Few companies offer McDonald's combination of growth, stability, and cash returns. It's our secret sauce and one we guard zealously. Beyond the headline numbers, something else was happening inside of McDonald's, arguably something even more profound.
We were transforming the company for our digital-first future. Internally, our mantra was perform and transform. Our legacy technology infrastructure was outdated, inefficient, and unstable. Hundreds of finance and HR systems, every country on its own app, data puddles instead of data lakes. Technology wasn't an enabler, it was a handicap. So too was our structure. Business functions, including menu, restaurant design, pricing analytics, indirect procurement, and consumer insights were all decentralized. We've done the hard work to restructure our company and establish One McDonald's Way of operating to better leverage our size and scale. This includes common technology platforms, a single enterprise data foundation, operating systems and capabilities that can be deployed across more than 46,000 restaurants. That enables us to identify opportunities faster, test them rigorously, and deploy what works more efficiently. That's just one example of how we can use our unmatched scale as a competitive weapon.
Which brings us to McDonald's > NEXT. The advantages and capabilities that we have built, along with our financial strength, position us to grow in the areas of greatest opportunity at a time when customer expectations are once again shifting and industry dynamics will remain challenging. Customers want value, but they also want great taste and quality. Marketing is becoming more personal, more participatory, and more driven by direct customer relationships. With new service channels, restaurants are becoming more complex to run, and AI is changing how businesses operate and customers engage. At the same time, the industry growth algorithm is changing. We expect industry traffic growth in our wholly-owned markets will be flat while inflation remains elevated. For McDonald's to succeed in that environment, growth must come from capturing greater share. As you drive traffic, you get operating leverage and margins grow.
You can't count on traffic alone to drive margin expansion. It must also come from operating more productively. The winners will be the companies that create more demand and deliver it more efficiently. That makes two priorities critical to generating strong shareholder returns, share gains and productivity. We must be the first choice for more customers more often. To create the capacity to keep investing behind that growth, we need to unlock new levels of productivity across the system. That's McDonald's > NEXT. Growth and productivity. Two sides of the same coin. We will elevate the taste, quality, and customer experience to earn more first-choice visits. More first-choice visits create guest count growth. Higher guest counts and greater productivity together improves restaurant economics. Stronger economics create the capacity to reinvest, and reinvestment makes the next turn of McDonald's growth and productivity engine stronger.
Our ability to make that engine stronger comes from our scale. The four pillars of > NEXT each leverage the power of our scale to capture opportunities few others can match. Menu > NEXT creates more reasons to choose McDonald's. Our focus is taste and quality across the categories with the greatest opportunity: chicken, beverages, and beef. We will elevate the menu choices customers already love, innovate where we see unmet demand, and leverage newly built category capabilities to earn share. The outcome is stronger preference, more first-choice visits, and guest count growth. Importantly, as we elevate our focus on taste and quality, value remains foundational. Great value and great taste are not competing ideas. Customers expect both, and we will deliver it. Consumer > NEXT turns that preference into more demand.
Through loyalty, personalization, partnerships, and a deeper understanding of our customers, we will build increased frequency and create demand that drives more visits over time. Restaurant > NEXT catalyzes growth and fuels productivity. By simplifying operations, modernizing restaurant design, and deploying AI-enabled tools at scale, we will improve execution, strengthen restaurant economics, and unlock restaurant-level efficiency. People > NEXT turns our people advantage into hospitality at scale. Better- trained, better- equipped teams create better customer experiences. Hospitality and better customer experiences strengthen preference, drive repeat visits, and reinforce our growth and productivity engine. Across all four pillars, AI serves as an accelerator. It helps us understand customer behavior, innovate faster, simplify operations, and make better decisions at scale. Bringing McDonald's > NEXT to life across our system requires a shared commitment to the customer experience. We call it Make It Golden.
It’s our multi-year, system-wide commitment to elevate the customer experience through great food and great hospitality that are uniquely McDonald’s. It calls on every supplier, franchisee, and employee to make each visit worthy of the Golden Arches. Throughout the day, you’ll see how Make It Golden supports growth and productivity across our strategy. McDonald's > NEXT will be deployed with discipline. Some improvements can begin now through stronger execution. Others will build as technology, restaurant readiness, and economics support them. We’ll sequence the work by market with a clear focus on franchisee capacity and returns. We’ve spent the last six years building new capabilities. Now it’s time to put them to work. The industry is changing. The companies that will win will be the ones that create more demand and deliver it more efficiently. We believe McDonald’s is built for that environment.
Our scale gives us better insight, stronger economics, and the ability to deploy what works faster and more effectively than anyone else in the industry. That’s what our strategy is designed to do: make McDonald’s the first choice for more customers, more often, and turn that choice into higher guest counts, stronger restaurant economics, and long-term shareholder value. Let me close with highlights of our McDonald's > NEXT commitments. Over the next few years, you’ll see the biggest upgrade to the taste and quality of our menu in McDonald’s history, driving 1.5 share points of gain in both chicken and beverages while maintaining our strong leadership in beef. You’ll see us deliver about 250 basis points of gross restaurant-level efficiency as McDonald's > NEXT elements are deployed across our wholly owned markets. You’ll see operating margins reach the low to mid 50% range by 2030.
Throughout the day, we’ll show you exactly how we intend to do this. For those joining in person, we’ll follow the live stream program with rotations that go deeper into the capabilities and experiences behind NEXT. The last chapter was about strengthening McDonald’s and building new capabilities. The next chapter is about putting those capabilities to work, using our scale to create more demand, using productivity to create greater capacity to invest, and making McDonald’s the first choice for more customers, more often. That’s McDonald's > NEXT. To begin, I’ll hand it over to our Global Chief Restaurant Experience Officer, Jill McDonald, to show how Menu > NEXT will create more reasons for customers to choose McDonald’s. Jill, go get them.
Thanks, Chris, and it’s great to be with all of you today. Since 2020, our focus on our $17 billion equities has helped grow sales of our iconic core menu by more than 50% to almost $90 billion. We see more opportunity ahead. We compete in three categories that account for the vast majority of our business: beef, chicken, and beverages. In 2025, across our top 10 markets in aggregate, these categories in the informal eating out sector remain sizable and growing. We are global leaders by a wide margin in beef, with more than 40% share in a $50 billion category that is growing around 3% a year. Chicken is a nearly $130 billion category, growing more than 5% a year. We have a high teens market share and are category leaders in most of our largest markets.
Beverage is a nearly $230 billion category, growing faster than the overall informal eating out market, and we have share in the high single digits. We are the second-largest coffee player globally. One category where we have led for decades, two where we do not yet have our fair share. All three are growing. Menu > NEXT is our share gain strategy to capture that growth. Taste and quality are two of the top three drivers of customer choice, and when perceptions improve, share follows. For example, a 5-point increase in customer perception of great-tasting chicken translates to more than half point of share gain in chicken. Improving taste and quality is a meaningful driver of growth.
Just over a year ago, we put specialized category teams behind beverages, chicken, and beef, each owning insights, menu, operations, supply chain, and marketing behind one objective: category growth from being the first choice for more customers. Two plans run through each category. Gold standard execution elevates the iconic equities millions of customers already love to unlock their full potential. Menu innovation adds new occasions, new choices, more reasons to visit. Let us start with chicken. It is the fastest-growing category in IEO. We have strong foundations of equities that we are leveraging as growth platforms. Chicken McNuggets represents nearly $15 billion in annual system-wide sales. The McCrispy platform, more than $2.5 billion, and the McChicken, nearly $4 billion. Let me tell you about how we will make our more than $30 billion global chicken business even bigger.
First, gold standard chicken applies what we have learned from billions of servings to make our chicken even better. That includes small sounding changes such as optimizing cook times, calibrating fryer settings, and adjusting oil volumes. Changes that when applied across our scale, have a significant impact. Deployment of gold standard chicken across our top six markets has begun and will be complete in 2027. Second, we are expanding our strongest chicken platforms. A significant portion of our chicken headroom sits in pieces, starting with Chicken McNuggets, a platform that has grown nearly 40% over the last five years. We will build on that momentum by expanding the platform through new flavors, signature sauces, product extensions, and cultural activations. Third, we are innovating to expand our presence across more chicken categories.
We will build on the momentum of McCrispy by continuing to introduce new options of our McCrispy sandwich, scaling the strips made with a new recipe already deployed in the U.S., extending the successful McWings platform into additional markets, and introducing grilled chicken sandwiches and wraps to meet growing demand for high protein options. You will hear more from Skye about that in just a few minutes. Fourth is hand breading, a significant opportunity to upgrade taste and quality. Across 10,000 restaurants in Asia, we have built meaningful expertise in hand-breaded chicken. In China and Malaysia, we are now the market leader for great- tasting chicken and are growing chicken sales and share. Taking learnings from these international development licensed markets, we have been operationally piloting a hand-breaded chicken portfolio in a handful of restaurants in Chicagoland. Customer feedback has been fantastic, with double-digit increases in chicken taste and quality scores.
We are now expanding hand-breaded chicken to more pilots, supported with advertising in both the U.S. and Ireland in 2027. Together, these efforts will drive more first- choice occasions, guest counts, and drive about 1.5 points of share growth in chicken by 2030. Let's talk about beverages, one of the most attractive demand spaces. A few years ago, we saw increasing demand in the fast-growing subcategories of cold coffee, refreshers, crafted sodas, and energy. Through learnings from CosMc's, the rigor of advertised sales tests, and deployments in these new beverage spaces that are now live across nearly 18,000 restaurants, we've built, validated, and scaled a new multi-year growth platform. These great tasting new beverages, combined with McDonald's unbeatable speed, value, convenience, and our loved food, is proving to be a compelling customer proposition. Beverages are no longer just an add-on, but a reason to visit.
More than half of beverage-led visits come after lunch, opening an incremental occasion for McDonald's at a time of day where restaurants have higher capacity. Average check is approximately 50% higher because people are pairing fries or a burger with their drink. We see high repurchase intent and improved perception of McDonald's having a wide range of great- tasting beverages. Sustaining volumes are due in part to customers exploring the entire range. Of loyalty members who purchased a specialty beverage in the first six weeks, nearly half returned for a specialty beverage from a different subcategory by week 12 across all markets. It's high margin, and it's coupled with low complexity, which our restaurant teams have embraced. Importantly, these drinks are over-indexing with Gen Z, giving the next generation more reasons to visit McDonald's. Let me tell you how we're going to build on that momentum.
First, we'll continue expanding the platform through new flavors and recipes, and we'll also keep scaling to more restaurants, including most markets in Europe in the first half of 2027 and expansion across more international development licensed markets throughout 2027. Second, we know for many customers, a first- choice occasion starts with a great cup of coffee. Gold standard coffee focuses on enhancing the taste of all 8 million cups of coffee we serve a day through fresher beans, new recipes, and upgraded equipment. New espresso machines in the U.S. will give customers more ways to personalize their coffee, including alternative milk choices. Gold standard coffee will be deployed in most of the international operated markets by the end of this year and continue to deploy in China, the U.S., and additional markets in 2027.
Together, expanding our beverage platforms and elevating our coffee experience will earn us status as the first choice for more of our customers around the world, which will drive more guest counts. That's how we'll add about 1.5 points in beverage share by 2030. Let's talk about beef, which 70 years later remains at the heart of our brand. We have $4 billion beef assets, Big Mac, Quarter Pounder, McDouble, and the Big Tasty, with generations of customer trust and loyalty, and we're building the next big equity with Big Arch. Our opportunity is turning these equities into even bigger growth engines and extending that strength into large burgers, the fastest-growing subcategory. First, gold standard beef builds on the success of Best Burger, which drove a 1%-2% lift in sales in the U.S. six months after it launched.
We are now making great execution easier and more consistent across the system with updated procedures and a new dedicated training program starting in 2027. Second, as we already have in the U.S., we are exploring fresh beef Quarter Pounder patties and hot- off- the- grill preparation in more markets. Third, we are looking to add more choice in beef for those seeking more flexibility in portion sizes, for example, a burger bowl. Fourth, we are leveraging the full potential of our $5.5 billion Quarter Pounder equity and expanding in large burgers with Big Arch and Double Quarter Pounders. The Quarter Pounder consistently outperforms the competition in the U.S. on value for money and repurchase intent. Australia shows what is possible when we make Quarter Pounder the center of innovation and marketing.
There, QPC contributed more than 5% of sales in the initial launch window, significantly outperforming previous beef LTOs, which contributed closer to 1% of sales. We have seen the strongest results when we invest consistently behind Quarter Pounder through taste and quality, relevant innovation, and sustained marketing support. We plan to share a broader pantry of QPC innovations across markets, along with greater freedom to develop locally relevant flavor and variety extensions. As customers move from a single to a double, QPC strengthens average spend and creates a natural pathway into large burgers. We are leveraging our global system to accelerate double QPC innovation and bringing new recipes to extend the Big Arch platform, which has delivered lifts to sales and higher guest counts upon launch, strengthening our ability to win more first choices in large burgers. We already lead the world in burgers.
Together, these moves will strengthen preference, increase frequency, and earn us more first- choice occasions across the category. That is how we maintain our market-leading share in beef. Now, to tell you more about how we are future-proofing our menu, I am going to turn it over to President of McDonald's USA, Skye Anderson.
Thanks, Jill. It is great to be here with all of you today. Over the last several months, I have invested a lot of time back in our U.S. restaurants, from Sacramento to New York City, to Omaha and Dallas. There is tremendous belief in this brand and our future, but there is also a recognition that winning requires us to be more focused, disciplined, and faster. That is why I keep coming back to two simple questions: How does this serve our customers better, and how does this help our restaurants win? Our delicious food is a big part of what made McDonald's famous in the first place. While there is so much our customers love, we are falling short when it comes to consistent execution. We are tackling that challenge head-on, and that means active conversations with owner-operators, suppliers, and employees about what is working and what is not.
Dedicated taste and quality training and removing distractions at the restaurant level so our crew can execute every order to the gold standard. At the same time, you will see us put greater emphasis behind the care and preparation of the food itself in our marketing. Our ambition is to strengthen the core reasons customers choose McDonald's in the first place and build the kind of sustainable baseline growth that creates long-term value. That is an approach we will take with new innovation to future-proof our menu. We are strengthening our category plans and making deliberate investments in the things our customers value most. We have been closely monitoring adoption, behavior shifts, and menu preferences, including the rise of GLP-1 medications. In the U.S., approximately 10% of adults use GLP-1s. Of those households with GLP-1 users, guess how many visit McDonald's? 84%. Let me say that again.
84% of households with GLP-1 users visit McDonald's. This is an opportunity. We do not need to win a new base of customers into McDonald's. Instead, we need to keep giving them more reasons to make McDonald's their first choice as their eating habits evolve. They want more protein, greater portion flexibility, and food that leaves them feeling satisfied without feeling like too much. Our menu already gives customers built-in choice. They can choose the protein, the portion, and the format that fits the moment, and we see that reflected in behavior. Households with GLP-1 users are increasingly choosing some of our strongest equities, including Chicken McNuggets, Filet-O-Fish, and Happy Meals that combine protein and portion flexibility. This trend extends beyond GLP-1 users, way beyond.
While there is roughly 30 million GLP-1 users in the U.S. today, there are nearly 60 million Americans who are actively seeking more protein in their diet. That broader protein-seeking audience creates a much larger growth opportunity. McDonald's has a strong right to win in protein-led categories, including grilled chicken, chicken bowls, protein-forward breakfast, and snack wraps. Our approach is balanced. Taste-led, protein-forward innovation with disciplined deployment, all calibrated to minimize complexity in our restaurants. We are exploring bowls, grilled chicken, and egg bites to expand protein-forward options across breakfast, lunch, and dinner. Such opportunities bring together what these customers want most: great taste, the protein they are seeking, and flexibility. You will all get to taste and learn more about some of these uniquely McDonald's solutions at our rotations later today. We already have the customers.
We already have the protein credentials, portion flexibility, and scale to set us up to win as tastes change. Now we are building on those advantages to create more reasons to visit McDonald's more often. I am going to turn it back over to Jill to close out Menu > NEXT.
Thanks, Skye. New gold standard moves across chicken, beef, and coffee, further elevating our billion-dollar equities. Expanding our chicken portfolio, deploying new McCrispy strips, and bringing McWings to more markets. Adding interest and relevance to Chicken McNuggets with new flavors and sauces, and bringing hand-breaded chicken to more markets beyond Asia. A baseline-building new McCafé beverage platform now scaling globally. New recipes, flavors, and line extensions for QPC, Double QPC, and Big Arch. More protein options in beef, chicken, and beverages with greater portion flexibility, all led by specialized teams obsessed with growth in our largest categories. When we combine taste with McDonald's advantages in value, convenience, speed, and scale, we drive more first-choice visits for more customers, increased guest counts, and share follow. Our menu gives customers more reasons to choose McDonald's. Consumer > NEXT turns that reason into more visits.
To share more, I'll hand it over to our Global Chief Marketing Officer and Head of New Business Ventures, Morgan Flatley.
Thanks, Jill. Good morning, everyone. To win in the environment Chris laid out for us earlier today, we need to be the first choice for more customers more often. Consumer > NEXT is our strategy to convert our customer relationships into more visits. We start with an advantage that no one else has, our iconic brand and unmatched fandom. McDonald's captures approximately 40% of positive brand mentions on social across the leading QSR brands. That's more than our next three competitors combined. This is not an audience we have to buy our way into. We've already got them. They're ours. These fans are the foundation of our new marketing model, which includes engaging them in big global moments and building deeper individual relationships. We're evolving exactly how we build our brand to be more efficient and effective at moving culture to support customers making us their first choice.
First, big, globally scaled campaigns that are purposefully designed to be carried by fans and creators. When fans amplify our campaigns, it's more effective because their voices are more trusted. Better yet, when our fans produce and spread content, less paid media is required to reach the same audiences. Second, our campaigns will be built on McDonald's collection of iconic IP, not someone else's. This makes our marketing more distinct, more ownable, and baseline- building for McDonald's. Third, a simplified marketing calendar with fewer but bigger ideas. We're roughly doubling our investment in longer-running baseline- building programs focused on core credentials like our brand, taste and quality, and value, while reducing the number of short-term promotional campaigns. It's simpler for our crew, and it's clearer and more consistent for our customers.
Manu Steijaert, President of International Operated Markets, is going to share how this evolution is already coming to life.
Thank you, Morgan. Morning, everyone. Our International Operated Market segment spans 19 markets. It is more than 10,000 restaurants, and it represents over 50% of total system-wide revenue. Great ideas can start anywhere in our system. Our scale turns a local insight into global demand. Our recent global Menu Heist campaign shows how that works. One thing we know about McDonald's fans is when they travel, they go to the local McDonald's, and they love to show us what they have found. We turn that energy into a traffic-driving program built around our own iconic local menu with a simple invitation for fans to join The Heist. Let us take a look.
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As you have seen, our local social insight became a global conversation, expanding across more than 20 markets. Fans shared their discoveries and did the marketing for us. We received millions of views and thousands of comments from friends excited to try Japan's McCrispy Teriyaki, Belgium's Biscoff McFlurry, and Canada's McShaker Fries all in one place. We sparked searches across markets and in Italy tripled the amount of user-generated fan content compared to previous campaigns. Importantly, we achieved incremental guest count in our restaurants and grew sales with our own equities and IP. That is a pattern we have seen before. Fans rallying around a unique brand experience like Grimace Shake, Adult Happy Meals, and Famous Orders. Now it is even more powerful in tandem with Menu > NEXT and more efficient.
We worked with around 10 major partners for Menu Heist versus the 40 that would traditionally have been used if each market had to execute locally, reaching greater scale than any market could achieve on its own. Morgan, back to you.
Thanks, Manu. I have to say, that is such a fun example. Menu Heist really exemplifies the first part of our model. Now let me show you the other. From moments that rally millions to one-on-one relationships between us and our fans, we can use customer intelligence to bring people back more often. It starts with the relationships we have built. Five years ago, we launched our loyalty program. Today, we have nearly 220 million 90-day active loyalty customers, growing 45% in just the last three years. If they were a country, it would be the seventh largest in the world. Our original reason for launching loyalty proved true. Active loyalty members visit us 2.5x as often as non-members, and they spend more over the course of a year. Loyalty allows us to know our customers better, to deliver more meaningful value and promotions to them.
But we have not met our full potential, not yet. Now we can with personalization. Let me tell you what we know about our loyalty customers and how we are using our customer engagement engine to earn more visits with relevant offers and experiences. Our 220 million active loyalty customers span a range of behaviors and needs. To illustrate how we use customer intelligence, let me focus on two important customer groups. First, we have our frequent loyalty customers who visit more than once a month. They tend to be especially motivated by deals, events, and what is new. Our goal with frequent fans is to recognize and reward their brand love, deepening our relationships with them with more value, convenience, and access. To do this, we plan on launching a tiered loyalty program, giving our most engaged fans even more from McDonald's.
Not just savings, but offers tied to incremental occasions and trade-ups on things they like most. This could include exclusive benefits and access to things only McDonald's can provide, like earning points faster, early access to limited menu items and merch, or a coveted invite to a McDonald's launch event. These things really matter to them. Second is our casual loyalty customer who visits at least once in a 90-day window. They also care about value, while also placing more importance on a greater experience and the familiar McDonald's favorites they crave. Our fans visiting occasionally, the goal is to bring them back with more reasons to routinely come back to McDonald's and make them feel recognized and appreciated when they do. Rather than broad discounts, this includes highly personalized experiences based on the foods, rituals, and moments that matter most to them. We'll tailor offers to their interests.
A customer who comes for breakfast might receive tailored breakfast rewards, while a family could unlock offers and experiences designed for group occasions and even share bonus points with loved ones. We'll drive action that rewards one more purchase. Tiers and gamification like personalized missions and menu discovery challenges, giving them more reasons to return with tailored benefits that are clear, concrete, and achievable. What's really interesting is there's an untapped group beyond our frequent and casual loyalty customers. They are customers who initially signed up for loyalty but haven't visited us in a few months. At any given moment, we have roughly 150 million infrequent loyalty customers to reengage, and our goal is to give them a reason to reconsider McDonald's. This group is less likely to respond to brand merchandise, exclusives, or experiences. Their proposition needs to be immediate and practical.
They're activated by an incentive that makes them want to reengage, like a birthday bonus or surprise rewards for coming in. In addition, they're seeking value that extends beyond our restaurants, so we're expanding to offer new partner benefits. Still to come this year in the U.S., we'll be offering Uber ride credits and Disney+ subscriptions. This works across all cohorts to ensure McDonald's stays present in our customers' lives between visits. Evolving from a points program to a partnership platform has been clearly effective for bringing customers back into our ecosystem. We've seen that with these partners, using Germany as an example, up to 20% of the customers who participate are new or infrequent loyalty customers. Personalized and more relevant offers, rewards, and experiences are at the heart of our customer engagement engine that builds deeper individual relationships and earns more first-choice visits.
It's one part of our broader revenue growth management strategy that creates value for customers and strong restaurant economics for franchisees. The other part is the everyday prices customers see on our menu boards. Informed by insights from millions of transactions and a broad range of market data, our menu pricing engine is an industry-leading tool that provides franchisees with pricing recommendations down to the restaurant and item level. Franchisees retain control over independent pricing decisions, but with better information. Together, these capabilities help us continue to strengthen our value leadership and drive more visits, fueling long-term growth. All of this is powered by data and technology. To make it possible at McDonald's scale, we need a common foundation. Let's welcome Dario Baroni, President of McDonald's International Developmental Licensed Markets, to tell us more.
Thanks, Morgan. For context, IDL footprint covers a population of 5 billion people. It includes some of the most technologically advanced markets in the world. Consider China, our most digitized market with 98% of sales coming through a digital channel. Our teams there are on the forefront of social commerce and new ways to drive loyalty, frequency, and engagement. IDL is a great learning lab to incubate innovation before our best ideas are scaled across the system. Digital experiences at most companies are built market by market. Each country with different technology, separate code bases, fragmented roadmaps, and inconsistent capabilities. It is slow, it is expensive, and it is inefficient. Over the last three years, we re-architected our digital foundation from the ground up, unifying ordering, marketing, loyalty, and data into one single global backbone. That shared foundation makes the next leap possible, GMA One, also known as Global Mobile App One.
This is our first true global mobile platform, turning everyday digital interactions into dynamic, highly personalized journeys at McDonald's scale. We redesigned GMA One around the high-frequency moments that matter most. Lightning-fast reordering, intuitive reward redemption, dynamic meal building, and frictionless checkout. This includes the highly personalized rewards, offers, and incentives that Morgan was talking about. In our early research, the results were definitive. Customers preferred new reward experience about 2.5x more than what they use today. They preferred the new reordering and meal building journeys by more than double. GMA One is the breakthrough. A breakthrough that allows us to build functionality once and deploy it everywhere. With GMA One and the single unified code base, global deployments takes weeks, not years. The new platform unlocks monthly features across nearly every market. And because its architecture is modular, it is AI-ready.
It is built for speed, to plug directly into emerging conversational commerce channels without re-engineering our core. Our pilot begins in France later this year, with plans to scale across our top 10 largest owned markets by end of 2028. Now, to show you how we are turning customer engagement into our next major value driver, I will hand it back to Morgan.
Thanks, Dario. The more our fans engage with us, the more we learn about them as individuals, and the more personal and relevant we make each interaction, the more demand we create around our iconic brand. On top of that, we have more than 70 million daily customers globally across every generation and day part, and an unmatched footprint from our app to kiosks, menu boards, and restaurants. We are identifying more ways to leverage these assets to create new high-margin sources of value for McDonald's and our franchisees. McDonald's Media Network is the first example. Commerce media is one of the fastest-growing areas in advertising and is expected to reach more than $100 billion in the U.S. alone by 2028. Last month, we moved into markets testing with a pilot across 450 U.S. company-owned restaurants.
We are at the beginning of our aspiration to build McDonald's Media Network into a billion-dollar business across the McDonald's system over time. It is an opportunity to generate revenue for the system with little in the way of additional cost, no operational complexity, and no disruption to our customer experience. You have seen the power and potency of our marketing model. When more customers choose us, we have to meet them with great food, speed, convenience, and an experience that feels worth it, and we will. Jill will tell us how this all comes together in one place with Restaurant > NEXT.
Hello again. Everything you have heard this morning comes back to one place, our restaurants. Our plans to be more customers' first choice more often and grow share are already in motion through Menu > NEXT and Consumer > NEXT. But in today's landscape, alongside the power of guest count-led growth, we are also focused on driving further restaurant efficiencies to expand our margins. We expect to deliver about 250 basis points of gross restaurant-level efficiency over time as we deploy productivity bundles across our owned markets. Let me show you how. First, we are re-imagining the design of our restaurants to deliver a more appealing modern customer experience. New kitchen layouts and equipment to both future-proof capacity and make it easier for crew to serve great-tasting food and drinks and unlock productivity gains.
The new designs include upgraded play places, improved dining rooms, and more open kitchens with visible McCafé beverage preparation that will strengthen customer perception of great taste and quality. Operational changes to kitchen layouts with the introduction of beverage cells, a new servery station to make it easier for crew to assemble orders, delivery lockers, and improved drive-thru operations to better serve digital customers. Fast-forward windows and drive-thru as standard where space allows, adding up to 25% additional capacity. We have also consolidated designs to fewer variations built from more shared components, which further improves our scale procurement advantage. Second, we are deploying ArchIQ, our new AI-powered restaurant operating system. It reduces complexity and frees up labor hours so our crew can work more efficiently and focus on improving customer experience with hospitality and great-tasting food and drinks.
We have brought these capabilities together with new Menu > NEXT and Restaurant > NEXT innovations into a single operating model and are testing them across four operational concept restaurants in Chicago and in a warehouse restaurant learning lab that some of you will get to visit this afternoon. It is working. It is visibly working. We have surveyed thousands of customers from the U.S., U.K., Brazil, and Australia, and the pattern is consistent. Nine in 10 prefer the new designs. Perceptions of great-tasting chicken and beverages at Chicagoland concept locations are significantly higher, in some cases, up to 10 percentage points higher than at nearby restaurants. That is what customers see. Behind the counter, we are seeing an impact, too. Here to tell you more about that, I am going to turn it over to McDonald's Global Chief Information Officer, Brian Rice.
Thanks, Jill. Technology is central to helping our restaurant teams deliver the experiences that make McDonald's the first choice for millions of customers. When our crew has fewer complex decisions to make, when our managers have real-time visibility, and when repetitive tasks are automated, we elevate both the crew and the customer experience. Put yourself in the shoes of a restaurant manager today. They are balancing food quality, staffing, equipment maintenance, inventory, and customer demand across more ordering channels than ever. That is a lot. Over the last few years, we have made significant progress in building the digital foundation to make running our restaurants easier than ever. First, since announcing our partnership with Google, we have deployed Google edge technology to thousands of restaurants across seven major markets, and we have plans to complete the rollout in the U.S. in 2027. This brings high-performance AI compute power directly into our restaurants.
At the same time, we have unified our point of sale systems across nearly all of our markets. We have moved from fragmented, bespoke local systems to a consistent platform built for rapid innovation. As we know, AI is only as good as the data feeding it. We have also built a standard restaurant data lake that is connected directly to restaurant-level operations. This allows our AI models to make accurate split-second decisions. By interconnecting the operational heartbeat of over 46,000 restaurants worldwide, our data lake captures billions of data points daily. This creates an insurmountable advantage and a continuous learning loop that competitors cannot replicate. This standard foundation is what now enables ArchIQ, bringing automation, diagnostics, predictive alerts, and coaching into a single platform used by our crew, restaurant managers, franchisees, and our operations team.
In our concept restaurants where ArchIQ is deployed, our crew tell us they have higher morale and more confidence to do their jobs. Let us have a look.
McDonald's is a really fast restaurant.
We don't have everything prepared for the shift. It can slow us down, so we have to multitask.
If the crew is stressed, you can tell right away, and it throws everybody off.
The way it used to be set up before, we were very crowded.
When an Uber or DoorDash would come, it would all pile up. Now since we have the lockers, all they do is type in the code and take it out.
With the new layout, I get to move around, so now it's easier for all of us. This layout has helped so much.
The new technology is better for us.
We have Archy that takes orders now.
Sometimes I can even make three drinks at a time while Archy taking the order. Archy is basically like another employee to us.
The scales, that help our order accuracy.
On the scale, that's new. We can have more 100% correct orders. Everything is in the bag. We're not missing nothing.
When things go better, the customers also feel comfortable.
With the technology, obviously, it does take a lot of stress off our employees. It benefits our customers because now there's more interaction with them, and now they get faster service.
Step outside and maybe ask about their day. If we're not treating them correctly, they're not going to come back.
We get the food ready, give it out to them right away. Boom, they're good.
We have the customers even coming up to us saying like, "Your employee's so great. Store doing something good here."
ArchIQ is a game changer. This afternoon, you will get to experience ArchIQ in action across four key innovations. First, voice AI in the drive-through, which we call Archy. Archy takes live orders in both English and Spanish with accuracy above 90%. This frees our crew to focus on hospitality and driving growth. In our early test restaurants with Archy, drive-through customer satisfaction is above national trends. As Archy scales, it will free at least 50 labor hours per week. This is one of the most significant and tangible benefits of ArchIQ. Second, automated inventory. We are eliminating one of the most tedious and time-consuming tasks in the restaurant. We can now track stock in real time through Bluetooth Low Energy tags, saving about five labor hours per week and reducing food waste by 15%. We believe this is an industry first.
Third, using connected equipment and computer vision, the team will show how ArchIQ improves food quality and consistency, while also shifting equipment management to predictive operations. This drives about a 50% improvement in key equipment and menu availability in each restaurant. That is unprecedented. Fourth, you will see how our intelligent Accuracy Scales verify millions of orders every single day. These enable our crew to catch and correct 10% of those orders before they ever reach the customer. This is why we are excited to show you all of this in action today and give you a first-hand look at how ArchIQ is making it easier for the crew and better for our customers. To tell you more about how Restaurant > NEXT reaches a system, I will hand it back over to Jill.
Thanks, Brian. Many of the capabilities behind Restaurant > NEXT are already proven and are scaling across our system today. ArchIQ is built on learnings from over 8,000 restaurants in China, where a tool called [RGM BOSS] already provides a single source of insight and data for restaurant managers through real-time visibility into operations, scheduling, and automated inventory management. It is helping drive margin improvements. We have Accuracy Scales in over 10,000 restaurants today and expect to double that by 2028. Created in France, these scales significantly reduce the number of inaccurate orders before they reach the customer, drastically reducing delivery refunds and unlocking more drive-through capacity at peak hours. Beverage sales and courier fulfillment areas from the U.K., and delivery lockers, again from China, are also helping restaurants handle growing demand more efficiently.
Now based on our years of experience deploying large-scale restaurant innovations such as Experience of the Future, we know how to thoughtfully deploy restaurant-level change. NEXT is the destination for our system, but each market's path to get there is based on restaurant readiness, local economics, and customer needs. The plan to scale the new restaurant designs, including new kitchen layouts and new lobby designs, follows the regular 10-year remodel cycle. Other NEXT elements are incremental to the standard remodel and represent opportunities to unlock greater growth and productivity at an even greater pace, starting in 2027. The additional capabilities, for example, ArchIQ, the menu, and many of the operations enablers, will deploy in sequenced bundles that will prioritize the highest financial impact alongside the most efficient and effective restaurant-level training to help manage the change in restaurants.
Let me review the principles that will guide when and where these capabilities are deployed. We deploy where the technology prerequisites are already in place. We verify restaurant readiness before anything scales. Every deployment is held to our global operating and investment standards, so we deliver the expected execution, quality, and returns. Above all, deployment is conditions-based. A market graduates to the next phase of deployment when it has built the capabilities to run it. As I hope you can tell from my enthusiasm, Restaurant > NEXT is expected to support our ambitions, be the first choice for more customers, and grow share by contributing directly to a better customer experience and facilitate efficient restaurant operations of about 250 basis points over time. That sets us up to reinvest in the customer experience and grow.
Ian will have more about the specifics of the economics and the implications for returns for both the company and franchisees in his presentation. Of course, as we all know, restaurants don't create great experiences on their own. They need the crew to make that happen. When we make restaurants easier to run, we help restaurant teams focus on delivering the hospitality that brings customers back. To share more about how we'll redefine hospitality across the system, let me hand it over to McDonald's Global Chief People Officer, Tiffanie Boyd.
Well, thank you, Jill, and good morning, everyone. In the lobby of our building, there is a Fred Turner quote that's inscribed on the floor and it says, "We are a people business, and we never forget it." Today, we have the data to show why that principle really matters for our growth. When we compare U.S. restaurants in the top quartile versus those in the bottom quartile on employee engagement and retention, those in the top quartile deliver 10% more guest counts, 15% higher sales, and 20% more cash flow than those in the bottom quartile. Why? It's the same brand, it's the same menu, it's even the same equipment. But the difference is the people and the environment that we create for them to perform at their best for our guests. Our research shows that McDonald's outperforms key competitors on people and culture across most international operated markets.
Guests recognize the important role of our crew in creating great experiences. The connection is straightforward. Engaged crew members execute better execution leads to better guest experiences, and those experiences drive greater guest counts, sales, and cash flow. Together, these insights reinforce that hospitality isn't just a feeling. It can be a real growth driver for McDonald's, and that is the focus of People > NEXT. It's about creating great experiences consistently and at scale. On October 5, Ray Kroc's birthday and our Founder's Day, we're launching Make It Golden. It begins with the largest capability-building initiative in our 71-year history, and it'll equip 2 million people with the training, tools, and support needed to deliver the great food and great hospitality that are uniquely McDonald's.
Make It Golden will continue as a multi-year roadmap to build capabilities that can be taught, measured, and scaled to drive real business outcomes, all while retaining the heart and soul of McDonald's. Make It Golden is built around three commitments. First, equipping our people with better tools and training. Second, strengthening our standards and how we measure performance. Third, delighting our guests with hospitality that's distinctly McDonald's. Each commitment represents an evolution in how we engage and support our restaurant teams. Let's start with how we'll upskill our people to perform at their best and do their best work. We'll do this by leveraging training, technology, and simpler ways of working. Not only does this create a better work experience for our people, but it also creates more capacity in the restaurant.
Prioritizing the crew experience delivers real economic value for our franchisees because confident, well-trained restaurant teams not only perform more consistently, but they actually stay with the brand longer. In our U.S. restaurants, the cost of replacing a crew member is about $1,600, and replacing a shift manager costs roughly $5,800, and that's before you consider broader impacts on service, sales, and guest satisfaction. So having a well-trained and engaged crew can help avoid these costs while delivering a great guest experience. We know this upskilling approach works. In Australia, our [step-u p] initiative built training, coaching, and accountability around real observable hospitality behaviors, and in just one year, we saw double-digit improvements in guest satisfaction, and sales grew alongside it. We will now scale that kind of impact across the McDonald's system.
Through Make It Golden, we will engage franchisees across our owned markets by the end of 2026 with a common upskilling program. It will give operators a clear framework for building crew capabilities, improving execution, and delivering stronger restaurant performance. Today, way too much of running a restaurant relies on paper, spreadsheets, and disconnected systems. As Brian mentioned earlier, ArchIQ provides AI-enabled tools that simplify operations and help identify issues before they become downtime. The result is less administrative burden, more time spent leading crew and serving guests, and more consistent execution across our restaurants. Our second commitment is to strengthen our standards. Great food and great hospitality have always mattered to McDonald's. What's changing is our ability to measure consistently and to scale what works.
Going forward, we're elevating both within our restaurant performance review process, giving restaurant teams greater visibility into performance and more consistent coaching on how to make improvements. To do that, we're leveraging Qualtrics, our experience management platform, to bring together guest feedback, employee feedback, and operational performance data all in one place. Earlier this year, we launched our first global employee listening platform, generating more than 300,000 employee responses across seven markets in just a few weeks. Today, these insights sit in separate systems, but going forward, we can connect them, leveraging one common data lake that you heard Brian mention earlier. This will give us a clearer view of how employee and guest experience impact business performance. In Q1 of 2027, we will deploy this system across the U.S. and IOM markets. We're also rethinking what we measure. Today, we evaluate whether a crew member uses the right words.
Going forward, we'll also evaluate whether they create a feel-good moment. When you pair this with guest friendliness scores, we'll be able to see and evaluate hospitality from both sides of the counter. This will come to life in real, tangible points of reflection, four times annually at each restaurant when we assess performance against our operating standards. Measurement only tells us where we stand. What guests actually feel gets decided somewhere else, at the front counter, at the drive-thru window, and oftentimes in a delivery bag. Which brings me to our third commitment, which is to delight our guests with golden hospitality that's distinctly McDonald's. Our goal is to make the McDonald's brand of hospitality recognizable, scalable, and repeatable and relevant across all channels while still giving restaurant teams the freedom to create moments that build brand love and feel authentic to their customers and their communities.
Let me tell you what happened in China, where 98% of transactions are digital and half of all orders leave in a delivery bag. You might expect hospitality to get lost in that environment, but it didn't. Let's take a look.
[Presentation]
Now, the important part of this example isn't the extra nugget or even the nugget man. It's really the empowerment of the crew. They paid attention, saw an opportunity, and took action to create something special. Now imagine teams in over 46,000 restaurants creating those types of experiences and moments. That is the kind of experience that strengthens preference and give guests around the world another reason to choose McDonald's, a reason to make McDonald's their first choice. Our ambition is simple: establish a differentiated McDonald's guest experience by equipping our people, strengthening our standards, and delighting our guests. We have the people, we have the scale, we have the roadmap to make hospitality a competitive advantage that only McDonald's can deliver, and that is how we'll Make It Golden. Now, at this time, we will take a short break.
Following that, our Global Chief Financial Officer, Ian Borden, will take the stage to discuss McDonald's > NEXT financial impact. Thank you.
Good morning, everyone. Our break will end at 10:00 A.M. We will resume our program at 10:00 A.M. Thank you.
[Break]
Please make your way to your seats. Our program will resume in five minutes. Please take your seats and silence your mobile devices. Our program is about to begin. Thank you. Please welcome Global Chief Financial Officer, Ian Borden.
Morning, everybody. Welcome back from break. Throughout the day, you have heard about the opportunities that we are pursuing through McDonald's > NEXT. I want to translate those opportunities into the results that we expect. McDonald's > NEXT is not just a growth strategy. It is a value creation strategy designed to generate attractive returns for franchisees and shareholders, and designed to strengthen restaurant economics and create the capacity to reinvest for long-term growth. Ultimately, that is what powers the growth and productivity engine that Chris introduced earlier. The combination of our scale and the capabilities that we have built through Accelerating the Arches is what makes NEXT possible. Together, they create significant opportunities for growth and a step-change in productivity. From my colleagues, you have heard how NEXT will position our business towards the highest growth categories and make the largest upgrade to taste and quality in McDonald's history.
This upgrade will help us deliver approximately 1.5 points of share gains in both beverages and chicken by 2030. How NEXT will activate the full power of our global fandom, refocus on our McDonald's IP, further personalize the app experience for our loyalty members, and reactivate our occasional customers to support baseline guest count growth. How NEXT will leverage our foundational technology investments to bring about AI-enabled capabilities to life at scale, while making our restaurants easier to operate and unlocking about 250 basis points of gross restaurant level efficiency. At the company, AI will help enable a step-change improvement in corporate G&A. Through Make It Golden, deliver high-quality execution and hospitality to make the McDonald's experience people love even better and drive guest count-led growth. These are not standalone investments. They are connected capabilities.
They reinforce one another, create stronger unit economics, and build greater capacity to reinvest over time. Let me get into some more detail on what it is going to take to bring NEXT to life, the readiness of our system to do that, and the returns that we expect NEXT to generate. Let us start with our franchisees. Their financial health is industry-leading. In the U.S., average unit volumes are north of $4 million, with operating cash flow of about $500,000. Compared to 2019, total cash flow across the U.S. franchisee organizations is up nearly 50%. Across our big five IOM markets, average unit volumes are more than $4.5 million, with cash flow of around $400,000. These strong economics support healthy franchisee balance sheets and substantial financial capacity to continue funding investment to support long-term growth. That is exactly what is planned as part of our strategy.
Today, a standard required lobby remodel of an average drive-thru restaurant in the U.S. costs about $400,000-$450,000. This is funded by the franchisee as outlined in our franchise agreements. Restaurant > NEXT will be incremental to that investment. It is the additional operational, kitchen, and technology capabilities that design elements as well that we believe unlock incremental growth and greater productivity. The economics are compelling. As Jill discussed, across our wholly owned markets, we are targeting about 250 basis points in gross restaurant P&L efficiency as NEXT is fully deployed. For an average restaurant in the U.S., that is about $100,000 of gross annual cash flow. We expect a portion of that will be reinvested to support NEXT growth initiatives, but that the majority will benefit the restaurant's bottom line over time. That is real value creation at the restaurant level.
To deploy all Restaurant > NEXT elements for a traditional drive-thru restaurant, we estimate an incremental investment of approximately $800,000 per U.S. restaurant, and generally $650,000- $700,000 across our top IOM markets. Importantly, those investments will be phased over time. The technology, kitchen, and operational capabilities will be adopted as they become available. Design elements will largely align with the normal remodel cycle. Franchisees can invest progressively as capabilities are deployed and benefits are realized. They won't be making those investments alone. McDonald's will partner alongside franchisees for a portion of the incremental NEXT investments through a mix of rent relief and capital support. The mix and level of support will vary by market and be flexible and targeted to the realities that franchisees face locally. The principle is simple and consistent with past practice.
The full Restaurant > NEXT program should generate attractive returns for both our franchisees and McDonald's. When franchisees have stronger economics, our system is stronger. This is not new. We've successfully partnered with franchisees on large-scale reinvestment programs over time. Most recently, Experience of the Future demonstrated how aligning investment with value creation can accelerate modernization, build capacity, and generate attractive returns across the system. Through 2036, we expect to provide $8.5 billion in total NEXT partnering, which contains both rent relief and capital support. This includes about $5 billion by the end of 2030 to accelerate deployment of ArchIQ technology bundles, as well as kitchen and operations enablers. Holistic Restaurant > NEXT investments will have about a four-year payback for franchisees after partnering and about a five- to six-year payback for McDonald's, consistent with previous significant growth initiatives.
The power of NEXT, combined with our strong balance sheet, will structurally strengthen restaurant economics and the financial capacity of our franchisees. In turn, this will increase the long-term growth potential of our system by purposefully positioning our business towards the greatest opportunity areas. The targets we're introducing today reflect the financial impact of the choices we've discussed. They're grounded in demonstrated performance, the expected economics of Restaurant > NEXT, and the opportunities that we see ahead. Beginning with the top line, each pillar of NEXT is designed for McDonald's to be the first choice for more customers more often to ultimately deliver sustained baseline guest count growth. At the same time, capabilities such as AI-enabled revenue management and Archy [suggestive sell] will help increase average check over time. Taken together, we believe NEXT positions McDonald's to deliver more durable comparable sales growth.
Since our last investor update nearly three years ago, we've delivered against our commitment to increase the sales contribution from new restaurants. In 2026, new restaurants will contribute about 2.5%, driven by the fastest pace of restaurant unit expansion in McDonald's history. In 2027, we expect new restaurants to contribute nearly 2.5% to system-wide sales growth and moderate to about 2% by 2030. Underlying this sales growth is a net restaurant unit growth target of nearly 4.5% in 2027 and between 3.5% and 3% annually between 2028 and 2030. This includes more than 550 combined U.S. and IOM openings annually through to 2030. The targeted pace of new restaurant openings reflects our disciplined commitment to adding restaurants only when and where we expect to see strong long-term returns for both the franchisees and the company. We continue to see attractive near-term returns for new restaurants.
And over a typical 20-year period, the company returns are in the high teens percent range, which is well above our long-term cost of capital. In short, these returns provide confidence in our ability to continue to grow while maintaining our disciplined approach to capital allocation. All new restaurant openings will incorporate the Restaurant > NEXT design beginning in the first quarter of 2028, and we expect the cost of the new design standard will be comparable to existing costs. Between 2027 and 2030, based on today's rates, we expect to spend about $3 billion in baseline annual capital expenditures, with the majority supporting new restaurant development. Additionally, over the same period, we plan to spend around $1.5 billion-$2 billion on a cumulative basis to support the accelerated deployment of Restaurant > NEXT through capital partnering.
Just as we're disciplined about when, where, and how we invest capital, we're also taking a disciplined view to ensure that every restaurant is owned and operated by the right organization within our system. As we shared earlier this year, we've already begun taking steps towards a higher franchise mix and are targeting an increase from about 95% franchise today to about 98% globally by the end of 2028. We believe our highly franchised model supports a more efficient and scalable corporate structure, enabling us to focus resources on the capabilities that matter most to our system. Which brings me to G&A. As Chris discussed earlier, we've been improving our operating efficiency over the last several years.
We've reduced our G&A expense as a percentage of system-wide sales from above 2.4% in 2021 to about 2.2% in 2026, all while continuing to invest in areas of growth such as improved digital capabilities and our transformation efforts across the business. When I spoke to you in 2023, global business services was an emerging capability. Today, it's an established operating engine across McDonald's. Over the past three years, we've redesigned processes and modernized systems. We've made significant progress to build a trusted enterprise data lake and consolidate work into global capability centers. These changes allow us to leverage our scale and serve markets with greater speed and consistency. New enterprise data, analytics, and AI capabilities are becoming a powerful driver of productivity. They're helping us further simplify and automate processes and accelerate decision-making and innovation across the business.
As adoption scales, these capabilities will help us operate with greater efficiency and support the meaningful step-change in our cost structure. We expect G&A as a percent of system-wide sales will begin to decline in 2027 as we generate efficiencies and manage our overall spend. We'll continue to leverage G&A in subsequent years as we target about 1.9% of system-wide sales by 2030. Importantly, we expect these G&A efficiencies will help fuel investments for long-term growth and drive profitability. That balanced approach is in our outlook for our operating margin. By 2030, we expect to expand adjusted operating margin to the low to mid 50% range through a combination of top-line operating leverage and the cumulative impact of our refranchising efforts and G&A savings. Strong margins are important. Converting those earnings into cash is equally important.
We expect the levers that I've discussed today to increase free cash flow conversion from today's low to mid 80% range to the mid to high 80% range by 2030. Our strong cash flow generation provides flexibility to maintain a consistent and disciplined capital allocation framework as we remain steadfast in our commitment to be good stewards of capital. Our first priority is to reinvest in the business to generate attractive returns and drive sustainable, profitable long-term growth. We believe our adjusted new restaurant opening pace and McDonald's > NEXT are both strong examples of this. Our second priority is to return excess free cash flow to shareholders over time through dividends and share repurchases.
We continue to target a dividend payout ratio of between 50%- 60% of EPS, and we'll proudly join the short list of dividend kings with our 50th consecutive annual dividend increase. Finally, we remain committed to a strong balance sheet. We continue to believe that maintaining our current investment-grade credit rating enables the company and the broader system to invest consistently in growth initiatives. It also provides us additional flexibility when returning cash to shareholders while efficiently accessing capital at attractive cost and terms. I'll close with what I mentioned earlier. McDonald's > NEXT positions us to deliver more durable comparable sales growth, support strong EPS growth, and reinforce our position as a high-quality long-term compounder.
The scale of our investment reflects the scale of the opportunity, an opportunity that only McDonald's can capture through our scale, the reach of our brand, the strength of our balance sheet, our world-class franchisees and suppliers, and our successful track record of turning investment into long-term returns. Very few companies can say that. Fewer still can act on it, and we are. With that, we'll get ready to take your questions.
Thanks, Ian. Hello again, everybody. We're now going to take the next 30 minutes for Q&A. Chris and Ian will be up here on stage, obviously. We have other members of our senior leadership team here as well. We have a couple of mic runners on each side up in the audience that'll help facilitate this session. At the end of Q&A, we'll conclude the live stream, and then I'll discuss next steps with those here in Chicago. When you're called on, please state both your name and your firm. With that, let's take [inaudible]
[inaudible] And basically, the effectiveness of that. You talked about a lot of new things coming. You've done a lot of things in the last 18 months as well. What have you learned from what you've done and how you do it, that funnel or stage-gating that you do from chicken to beverage to marketing and value? Then why do you feel like maybe you're making adjustments that your hit rate might be better in the future? And thank you.
Yeah, thanks for the question. I think ultimately, this strategy that we've unveiled is a growth strategy, certainly enabled by productivity. I think as we think about the business, there's two elements to how you drive growth in the business. There's baseline growth and there's incremental growth. The foundation of what we're talking about here is really about driving that baseline growth. That's the sort of sustaining growth. That ultimately is what creates that long-term value creation. Now, you need to punctuate that periodically with incremental activity, things like a FIFA promotion or a Minecraft or whatever. I think one of the things that we've learned, certainly I talked about this on Q2, is you've got to make sure that the balance is really weighted to the baseline.
And yes, you need to do the incremental, but if you put too much on the calendar around incremental, it can add complexity to the restaurant. Ultimately, then you start to have the issue with lapping that activity, then you start to having to add more onto the calendar to do that. I think what we're really focused on here is the foundational elements, improving taste and quality of the food that we serve, making sure we're in the right categories, making sure that we're providing sustained support on that. It's not just sort of an in and out, but that we're doing that consistently over time. All of those things are going to drive the baseline. I think those are probably the biggest learnings that we've taken away from what you described as the last couple of years.
Maybe just one add to the question, David. I think beverages, to me, is a great example of something I think that we've executed very well and driven baseline, but also driven innovation and put ourselves in a new category. Obviously, we did a lot of research, as you know, through CosMc's, and I think the tests that we did in both the U.S. business and in other markets as it's come to life. We've executed, I think, incredibly well, both from a customer and from a restaurant execution standpoint and ease of execution. I think that's, to Chris's point, a great example of baseline building, test and learn quickly, and get to scale quickly.
As we talked about a bit in our script, you're going to see beverages in all of our IOM markets in Europe in the first half of 2027 because the business can see the opportunity, and we've obviously done a lot of work to make sure that we can execute that opportunity very effectively at the restaurant level.
Andrew?
Great, thank you for the presentation today. It's Andrew Charles from TD Cowen. In the spirit of driving durable sales growth, in the past, you've talked about normalized U.S. and IOM same-store sales of 3%-4%, gaining share in a category that grows around 2%-3%. I know you talked about an expectation for flat industry traffic over the medium term, but does the NEXT plan give you confidence that you can return to the normalized rate of same-store sales you've seen of that 3%-4% level, particularly in the U.S.?
Yeah, absolutely. I think what we are rolling out here is really based on our confidence that we can go deliver that share growth that we talked about in chicken and beverages, and also that we can hold our leadership share in beef. As we think about our algorithm, despite what we are expecting as flat industry traffic, our expectation is we are growing traffic. On top of growing traffic, you are getting check with that drives comparable sales. We are also, as you heard, continuing to invest where it makes sense in new restaurants. You put all those things together, and we have a lot of confidence in the algorithm that you just highlighted there.
Maybe just a build to that a little bit. I think because obviously we have given a fair bit of texture today on the scale of the investment behind that, which is significant. I would say the level of the investment is linked to the level of opportunity, and I think we think there is a really clear and compelling opportunity. We think that opportunity, as you heard me talk about, provides compelling returns for our franchisees and for McDonald's, which is why we are going to support bringing that opportunity to life, and we are going to obviously go after that as aggressively as we can. Obviously, managing some of the things we talked about earlier with executing well.
Danilo.
Thank you. Good morning.
Good morning.
Danilo Gargiulo with Bernstein. Ian, I was wondering if you can expand a little bit on how you are planning to get to the mid-50s margin for McDonald's over time. Maybe if you can walk us through the puts and takes since you are talking about industry traffic remaining under pressure. Chris, you were talking about the inflation in the U.S. and even beyond in the rest of the world, still remaining quite elevated. What is the role of the different components of your P&L that will get you to that level of margin, and what role is the refranchising playing to get to the mid-50s?
Yeah.
Thank you.
Yeah, thanks, Danilo. Good question. I would say, I think of it as three key components. First, and always the one that is most important, you have got to get to that durable comparable sales growth, and I think we have talked a fair bit about our confidence and the underpinnings through the category share growth targets that we have outlined. I think through what you heard from Morgan in terms of we have done a lot of work through Accelerating the Arches to build this loyalty base of 220+ million consumers. How do we activate those consumers and create even more connection, more value in the experience that we get and obviously drive incremental visits over time? I think there is lots of confidence in the ability to get to that more durable comparable sales growth.
As we drive strong top-line growth, obviously that always allows us to deliver leverage from an operating margin standpoint over time. I think the other two key components to that are the G&A target that I outlined, which is how we get from about 2.2% of system-wide sales today to about 1.9% by the end of 2030, which is a meaningful step-change at the enterprise level from an efficiency. The last component is the franchised mix globally. We are at about 95% at the start of 2026, and we are going to get to about 98% by the end of 2028. It is those three components that come together that enable that move to the low- to mid-50% range.
Dennis.
Dennis Geiger, UBS. Thanks for the presentation. Thanks to the team for putting the day together. Chris, you've talked a lot about the importance of value for a while now, but I think a little bit less so in the presentation thus far today. So wondering if you could speak a little more to where the brand is as far as value positioning goes, how you think about the value strategy over the coming years, and if any update on how you think about winning with that lower- income consumer in the U.S. Thank you.
Sure. Yeah. Thanks for the question. Yeah, certainly, value is foundational. It goes back to when Ray Kroc founded this company. He talked about QSC and V, and V being value. So this goes all the way back to the beginning, and it's part of our DNA. You've heard me say that many times. There's been a lot of work, as you know, over the last couple of years, to make sure that we've got our value positioning in the right places. And broadly across the world, I feel like we're in a really good spot there. We've also talked about that there's a few different components to value. There's base menu, so when you walk in the restaurant, what do you see on the menu boards? There's meal bundles, which would be, okay, I'm buying a bunch of stuff. What do I get from a meal bundle standpoint?
Then there's that entry-level value, which is the critically important value that you need with that low-income consumer. If I focus just on the U.S., because I think that's probably the crux of your question, we've made tremendous progress on the first two elements of that. Our base menu pricing is below our competitors on beef, chicken, and beverages, and breakfast. So we're in a really good spot from a menu standpoint. When you walk in the restaurant, we're lower than our competitive set. We also feel really good about where we are on the meal bundles. Our $5 meal bundle is the best in the industry. Nobody's better than us on that. We have $4 at breakfast. And we've done the work to get our EVMs back in line. We're holding to a 15%, 16% discount on that. So I feel good about that.
The opportunity that we have is still around that entry-level pricing, and we have that in almost all of our IOM markets. We haven't had that in the U.S., and so certainly that was what we tried to address with the 10 items for under $3 that we did in Q2 of this year. We still have some opportunities on that, and I talked about that on the Q2 call. Skye certainly has been having a lot of really, I think, very productive conversation with the franchisees. There were some conversations this week. There's complete alignment around the need for us to make sure we have a strong offering there.
And there's going to be some work that happens over the next couple of months, to test some different ways for us to go after that and do that. So I have 100% confidence that the U.S. will get that entry-level value, and that is really the key to going after that low-income consumer, is having that entry-level value offering.
Go, Brian.
Yeah, thanks, guys. Brian Harbour from Morgan Stanley. The rent relief and then the capital partnering, could you give us some sense for when the plurality of that will show up? I think you've talked about something like 70% of restaurants are going to be remodeled in the next three or four years. Maybe that was a U.S. comment, but when will we see most of that coming through? And I guess, what are some of the other milestones, for example, like the beverage cell, when will you see that in most of the U.S. and IOM stores that might be tied to that capital deployment?
Yeah. Well, why don't I take the first bit.
Sure.
And Chris may want to weigh in on the—
Yep.
—on the second part there. I would say just maybe for grounding, partnering is something that has been part of our business model for a long time. I think if you remember Experience of the Future or in the U.S., Bigger Bolder Vision 2020, we did significant partnering in pair with those initiatives. I think if you think about how we always think about partnering at the enterprise level, it is about we want to ensure that our franchisees are going to get a strong return on what they are investing behind any growth initiative, and we want to make sure McDonald's is getting a strong return on any investment that we put behind to support. I think it is one of the strategic advantages of our business model, is we have the financial strength as a system together with our franchisees to get after these initiatives at scale.
I think the rent partnering that I laid out, or the $8.5 billion that we talked about from 2027 to 2036, is commensurate with the opportunity, we think, to drive growth, because obviously they are connected, and that is obviously the way that we get our return over time. I think one important thing to just note is that $8.5 billion is a cash number. Obviously, when we partner, we amortize that partnering over the remaining term of the franchise agreement. So on average, I would say that is probably about 10 years. So there is a different P&L timing than there is to the cash timing. I think we will not have a standard partnering approach. The partnering will depend on the context in each market, because contexts are different, starting points are different. Organizational dynamics are often different.
I think we want to make sure that the partnering is designed to enable each of our markets to get after the opportunity and do that in the right way, and then headline by that principle that whatever we invest, we have got to make sure we are getting an appropriate return on that investment. Again, it is very typical with what we have done with all of our significant growth initiatives over history.
Then maybe just the second part of your question, certainly the elements of NEXT that are tied to the remodels, to the reinvestment there, those are going to happen as those activities take place. We are doing this within the normal remodel cycle. So this is going to be something where it will depend on the market, but when is that 10-year remodel timing due for a franchisee? Things like the beverage cell, those are really more about enabling and making the restaurant run more efficiently. That does not mean, though, that we are not able to get after the beverage opportunity until we have the beverage cell, because you have already seen what we have done with beverages in the U.S. We have done that without the benefit of a beverage cell in most of our restaurants there. There are other markets in IOM where we are a little bit further along on beverage cells.
I think part of what we've really been thoughtful about here is how do we make sure that we're going after the opportunities when the system has the readiness to go do that. Many of the ideas, I think, are ones that we're going to be able to get in front of or get after in advance, but there are certainly things that are going to be tied to the remodel cycle.
Lauren?
Thank you, appreciate. Lauren Silberman from Deutsche Bank. I appreciate all the color today. There's obviously a lot of focus from investors on re-accelerating U.S. comp. I know Skye recently just took over. Can you just help bridge how we should think about U.S. comps into the back half of the year, and then some of the initiatives that you outlined today translating into 2027 and beyond? Thank you.
Sure. I'll start, and then we've got Skye here who can give more commentary. But as we talked about, the goal here in the U.S. is to make sure that we're exiting 2026 with the business in a stronger position heading into 2027, and that still is very much the focus and the orientation. A big part of that is, as we've talked about, making sure that we've got that entry-level value program in place. There's some work and a lot of conversations on that. Maybe, Skye, I'll pass it over to you now to give a little more perspective on that.
Yeah. Thank you. Good morning, everyone. Yeah, we've had a lot of really productive conversations with franchisees, particularly over the last few weeks, and it's obviously exactly as Chris described, is how do we just make sure that the business is in a stronger position as we come out of 2026 going into 2027. We've made a lot of quick moves already, particularly as we address some of the value opportunities that we have. You'll certainly find us doing two things. Trying to just simplify operations and get our restaurant teams a lot more focused on doing fewer things well. Then also knowing that we have some elements of our value strategy that are actually working, making sure that we're redirecting our marketing efforts into the things that are working.
For the back part of the year, you'll see us really just help the restaurants get quite focused on execution, particularly around taste and quality. But then also you'll see us leaning a lot more into things like EVMs and meal bundles and digital offers, which are really the things that are working right now. In concert, we're obviously doing a lot of testing around what that evolution of our new entry-level value program will be, which more to come in the new year.
I might just do a little build on that from a tactical perspective, but just building on what we talked about in the Q2 call. You remember we said we had some execution opportunities to address. You've heard from Skye how the U.S. business is working very hand-in-hand with our operator leaders to get that sorted with the right sense of urgency. We talked in the Q2 call, you remember, that we started the quarter in July slightly negative. A lot of the actions that Skye has just talked about went into place in August, so August was also slightly negative. We expect September will be positive, but I think because of that slower start to the beginning of the quarter, I think we expect the U.S. business will be slightly negative for Q3.
Okay. John?
Thank you. It's John Ivankoe, JP Morgan. The question is on the implementation of the various modules of NEXT. It sounds like a number of things are going to go in over a course of a few years, and some of the design elements of NEXT will actually happen with a 10-year remodel.
Yep.
I think I heard you correctly.
Yep.
When I go back and I think about EOTF in IOM, and specifically in the U.S., it was like everything was done at once within a store, and I think a lot of projects were actually done ahead of the 10-year remodel. Maybe give us, if Chris, because you're sitting in the seat then, a history lesson in terms of what you learned from EOTF in terms of accelerating the project and doing everything at once in those stores. In terms of what we learned from EOTF relative to why the current plan on NEXT, a little bit of a longer step-by-step implementation is the right thing for 2027 and beyond.
Sure. A couple of things. I think first I would probably disagree slightly with your characterization of where we were with EOTF, in that we were perhaps moving more quickly. In fact, we were trying to catch up. In the U.S., we had gotten behind, the restaurant estate had gotten outdated. We were in a situation where we actually needed to catch up in really short order, which is the focus of what we did during that three or four-year period there. I think certainly one of the big learnings and takeaways from that is we can't let that happen again. I think we've seen around the world, we've generally been on a very good remodel cadence, but we had gotten out of whack on that in the U.S.
We are now heading into, again, a 10-year remodel cycle, and we are committed to making sure that our restaurants do not fall behind like they did previously. I think that was certainly one big learning. I think the second thing that we have learned through that is how you sequence this, and when you are taking restaurants down is really important. Because no matter if you are doing a light touch or if you are doing something more significant in a restaurant, it does impact operations, it does impact downtime. A lot of how we have thought about the different elements of what we are doing here with NEXT is also with an eye toward understanding the impact it might have on restaurants in downtime. The fact that this is being spread globally across really a 10-year remodel cycle allows us on a global level to certainly have more latitude on that.
In the U.S., roughly, if you just take, okay, you did 70% of the system in EOTF, you would have roughly 70% of the system in the U.S. going through that over the next, call it, four years. That is broadly right, but I think we are also going to be pragmatic about it and we are going to be working with franchisees to do it in the way that makes the most sense. I think let us not get caught behind. Let us make sure we are really thoughtful about what we are putting into the restaurant when we are taking it down to touch it to do a remodel. Those are probably the biggest takeaways we had.
Let me go on this side over here. Jacob.
Jacob Aiken-Phillips, Melius Research. Thanks for the question and thanks for your presentation. Can you go a little bit more in detail about the phasing of the different modules? What is assumed in that $100,000 franchisee cash flow improvement? How much of it is productivity versus expected sales from better hospitality, better some of these other platforms, et cetera?
Sure. Well, most of it, in fact, is really driven by productivity. We haven't counted on a lot of operating leverage going into that 250 basis point productivity. So most of it is real productivity benefits. There are elements to it. There's ArchIQ, and you heard different elements of ArchIQ. Archy is part of it, inventory management, things that we can do around connected restaurants. That's one part of it. There's another part which around supply chain savings, we still have a significant amount of spend, as you know, on our supply chain. We think there's big opportunities there for us to unlock savings. We're also looking at marketing as an opportunity. Particularly as marketing evolves, Morgan talked about this as well, about how the marketing model is changing. We think there's also opportunities for us to get productivity savings on the marketing side.
All of those things together, it will depend a little bit on where a market is in that time period. Take Archy as an example. Right now it's English and Spanish language. So if you're Germany, your ability to pull that right now is not the same as if it's English or Spanish. But the plan would be certainly over time that Germany would have that. So it really is going to depend very much market to market around that. The other thing, a lot of what we're doing with ArchIQ is also enabled by our edge deployment when that technology goes in. But we've tried to, as you would imagine, front load as much as we can some of the productivity benefits to enable the capacity and the confidence to then go invest behind the other areas of McDonald's > NEXT.
Chris.
Thanks. It's Chris O'Cull with Baird. Fewer larger marketing campaigns can result in more focus and impact, but it also carries risk that the campaign may underperform expectations. What gives you confidence that you can predict the success and reliability of a longer marketing campaign? Maybe what are some of the key factors to ensure it is successful?
Sure. Well, it starts with what we're focusing on, and what we're focusing on is baseline driving growth, and we're focused on baseline driving growth that's all about the taste and quality of our food. We know because taste and quality are two of the top three consumer needs, that as you improve taste and quality perception, it has sustained benefit on share. You heard about improving 5 points taste and quality perceptions in chicken is related to getting 0.5 share point of growth in chicken. So for us, the opportunity is as we continue to make the upgrade around the taste and quality of our food and drive consumer awareness of it, that's something that's going to be the gift that keeps on giving.
You actually become a little bit less dependent on sort of do you have the right movie property this month, or do you have the right other partnership, which creates a little bit of that boom bust dynamic that you are talking about. The foundation of driving taste and quality and driving consumer perception in those areas drives that growth, and then you can put things on top of it. So actually, I think what we have described as our plan with McDonald's > NEXT actually de-risks the marketing calendar more so than maybe what we have had over the last couple of years.
Peter.
Thank you. Peter Saleh, BTIG. Thanks for everything today. I wanted to ask on the hand-breaded chicken, if you can give us a little bit more detail in terms of the timing of that, what you need to do to get there, and is that somewhat of an offset to the 250 basis points of gross benefit to the franchisees? I would assume that adds some more labor to the restaurant. Any more detail around that would be helpful. Thanks.
Sure. Well, as we said, we have got a lot of experience with hand breading. We are doing it in some of our big markets in Asia. I think for us, as we think about hand breading, we have piloted here in Chicago, and gotten some experience there. Now we are going to take it to more restaurants in the U.S. to really make sure that we fine-tune the operational elements. You cannot just sort of take the experience and the learning from an operations standpoint in Asia. You have got a different menu, you have got different unit volumes, you have got breakfast versus lunch, different peak volumes. So you actually have to make sure that you have optimized how you do hand breading in a market, which is why we are doing this testing, or this piloting that we are doing in the U.S., and we are also doing it in Ireland.
I would expect we're going to continue to learn on that over the next, call it six months or so, to really get how we would roll that out perfected. Then once we've aligned with that on the franchisees, we would be rolling out. So we're not announcing a date on it, but it's going to be driven by making sure that we've really grooved the operational elements of that with our franchisees, in both, like I said, the U.S. and the learning in IOM as well. As it relates to the investment, certainly there is labor investment. It really becomes sort of different ways you can think about it. In the broader NEXT conversation, there's areas that we're requiring franchisees to invest, whether that's capital, whether that's through the P&L.
There are other areas for the franchisees that we're going to be driving savings for them, both in the P&L but also through some of the capital partnering that Ian talked about. So I hate to sort of say one is directly with the other. It's sort of a ledger. There's things that are on the plus side of the ledger. There are things that are on the negative side of the ledger. When you put those two together, you get the strong returns that we talked about.
Just maybe the only texture I would add is I think a big part of how NEXT comes to life is how you think about these as interconnected capabilities and how you phase them. So if you're in the U.S., do I put Archy in place first because I know that creates capacity and efficiency, improves the ability of the restaurant to execute, and front load that invert in front of something like chicken where there's more investment, some added complexity that needs to be managed. So I think how each market kind of thinks about these and sequence them, I think is going to be a really important part of how we bring to life the strategy and make sure we can execute it and set the restaurants obviously up for success.
Sara.
Thank you. Sara Senatore from Bank of America. I guess maybe a clarification, then a question. I guess the rough math I did on the remodels and the payback period suggests maybe a mid to high single- digit lift. Is that the right way to think about what you're expecting as you do that? Then the question is, I think, Chris, at one point you mentioned last year that maybe a quarter of the U.S. business was on the loyalty platform. Have you seen that grow? It seems like loyalty is an important part of your kind of customization and personalization. So how do you get people to continue up that adoption curve? Thank you.
I'll let you do the first one, Ian.
Yeah.
I'll cover the loyalty.
Well, I don't have your math in front of me, Sara, but I would say I think if you look at remodels, certainly in places like Europe or IOM, we continue to see good lifts when we do remodels and keep that image fresh. It always depends on do you do that remodel as a standalone basis? Do you combine the remodel with capacity driving or visible kind of external elements to the consumer? So I would say I just would go back to when we think about the total algorithm, you get to that more durable, comparable sales lift that we talked about earlier, and we're very confident in kind of getting to those payback terms that I talked about upfront.
On loyalty, right now, loyalty is about 30% of sales. The opportunity for us is to continue to drive that. You heard from Morgan the potential that we have with loyalty, particularly around frequency. If we can get someone to be a loyal customer, we're seeing about 2.5x increase on frequency. So the more we can get those occasional customers moved into the loyalty program, the more compelling the economics and the math on that look. I think one of the things that we've discovered, and Morgan talked about this, is the more that we can broaden the loyalty platform and include things like partnerships, so that it's not just about redeeming points for food, but also broadening out the different value and the benefits you get from loyalty.
All of those things serve to increase and drive even more adoption of the loyalty program. You will see over time, we are going to continue to add features to our loyalty program. That is going to continue to add members to that, and then we will get the frequency benefit that I talked about.
Do one more.
My question is just on G&A, and from 2023 to 2030, you basically kept a 2.2% for four years. Now it is rolling off pretty hard. What were the capabilities you were investing in that kept it high? Why does it roll off? I think it is some of the technology gets in place, but does that mean you see a big step- down in 2028? Just where you get the efficiencies. Thanks.
Yeah. Good question. I think it is a couple of things. Firstly, it is all of the work we have been doing on technology to, I think, modernize, generate global scalable tools and capabilities, by in their nature are more efficient because we are not building standalone technology in every market, which we have talked a lot about in the past, which is very efficient, obviously, to build and very inefficient to operate. I think the second thing, which I talked about in my opening remarks, is the global business service capability. We talked about the fact that we had 600 finance systems and several hundred HR systems. Obviously, again, very complex and inefficient to operate. We think that capability now is at scale, and we are going to start leveraging that capability to drive efficiency across the organization.
I think the third bit is AI and what we believe AI can do to help further enable some of those processes, end-to-end processes, to continue to drive efficiency. I think it is the combination of those things that help us get there. I will not get into texture of timing. More to come later on that.
I would just add, I think if you look at over the last few years, we have not broken it out, but the scale of what we have had to invest from a technology standpoint to get to a common global tech platform, to get those data puddles into data lakes, that has been a massive amount of spend. Then we have created this global business services, which again, required a big upfront investment to get that set up.
Now we've got those two in place, and that's going to give us the efficiency savings that we've shown here in the guidance. There was a lot of heavy lifting and a lot of investment that needed to happen over the last few years to enable the benefits we're now going to see.
Okay. That wraps up our Q&A session. Thanks, Chris and Ian.
All right. We'll see you at the warehouse.
All right. Thanks everyone for your questions. For those here in Chicago, please remain seated and in a moment we'll outline what we have planned for the remainder of the day. For those of us on the live stream, thank you for joining us today. We hope our presentation provided insight into how McDonald's > NEXT will drive our ambition to be the first choice for more customers more often. Please feel free to contact investor relations if you have any follow-up questions. With that, we'll now wrap up the live stream. Again, thank you and have a great rest of your day.