McDonald’s U.S. Franchisees to Contribute to Digital Marketing Fund
In an effort to expand its digital business and modernize its marketing strategy, McDonald’s U.S. franchisees will begin contributing to a digital marketing fund next year, as outlined in a memo viewed by CNBC. The change aims to increase the company’s competitive advantage and is part of a broader plan to invest hundreds of millions of dollars in enhancing its loyalty program and adding new ordering channels.
During the first quarter, loyalty program members generated over $6 billion in system-wide sales for McDonald’s globally. The company currently has 34 million active digital customers in the U.S., with a goal of reaching 100 million loyalty program members by 2027. In comparison, Chipotle Mexican Grill has 40 million loyalty members and Starbucks has 32.8 million.
To fund the new digital marketing fund, U.S. franchisees will be required to contribute 1.2% of projected identified digital sales starting next year. The rate will be adjusted annually based on projections made at the beginning of each year. This change is expected to result in an increase in cash flow for each U.S. restaurant of around $2,600 starting in 2025, as the digital investment costs will shift from a franchisee’s profit and loss statement to the marketing contribution.
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