McDonald’s Corporation (NYSE:MCD) has spent years trying to make its restaurants faster and more convenient. Pushing app ordering, self-service technology, and loyalty programs has been a major part of that strategy.
But convenience is only part of the story. The bigger question is whether better restaurant economics can drive repeat visits and faster growth. We recently explored that opportunity in Can McDonald’s Turn Better Restaurant Economics into Faster Growth?
But the company has realized that convenience alone does not build repeat visits. It turns out that many customers put the human touch ahead of convenience. And McDonald’s has some catching up to do in customer experience.
The 2026 American Customer Satisfaction Index gives McDonald’s a 72 score. Although that’s an improvement from 70 in 2025, McDonald’s ranks below several major competitors, including Jersey Mike’s (84), Chick-fil-A (83), and KFC (80).
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Now McDonald’s wants to become the first choice for more customers. That brings us to what the management has dubbed the NEXT strategy. The strategy emphasizes hospitality and the restaurant experience. For McDonald’s, that’s going back to the basics that Ray Kroc laid out: deliver great-tasting food and serve it with a smile, at a good value.
Serving With a Smile Might Require $8.5 Billion. But That’s Okay
Ultimately, McDonald’s Corporation NEXT strategy is about improving the economics of the franchise system. That involves combining better hospitality with greater restaurant efficiency.
The People component of the strategy seeks to equip employees to deliver a more consistent level of hospitality to encourage repeat visits. The Restaurant part aims to simplify operations and modernize restaurants. The goal is to generate 250 basis points of gross restaurant-level efficiency gains. McDonald’s estimates that improvement could produce about $100,000 in annual cash flow benefits for the average US restaurant.
Now, that matters more than many may realize. About 95% of McDonald’s restaurants worldwide are franchised. Therefore, it goes without saying that stronger restaurant-level economics are felt at McDonald’s Corporation.
So better hospitality can encourage repeat visits, and more visits can raise guest counts and sales. These gains trickle down to McDonald’s through royalty and rent streams.
The opportunity is huge. But the strategy isn’t cheap. McDonald’s plans to provide around $8.5 billion in partner support through 2036. That includes rent relief and capital support.
Uncertainty Remains
McDonald’s Corporation is making a huge investment and has set ambitious targets for results under its NEXT strategy. These include unlocking 250 basis points in restaurant-level efficiency gains and achieving an operating margin in the low-to-mid 50% by 2030. But amid intensifying industry competition, customer response may not justify the heavy investment, making the targets elusive.
Hedge Fund Backing Drops, Short Bets Ease
According to the Inside Monkey database, 79 hedge funds were holding McDonald’s Corporation at the end of Q2, compared to 83 funds in Q1. Still, some major funds continued to accumulate the stock. Arrowstreet Capital increased its stake 18% to 4.3 million shares, making it the largest holder.
The bull case ultimately depends on whether McDonald’s can turn its digital and operational investments into something harder for rivals to replicate.
McDonald’s has identified the problem and set out to solve it. If the effort to build convenient restaurants that also feel genuinely welcoming to guests is successful, the benefits could be enormous.
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