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McDonald's plans to modernize 550 California outlets with ordering kiosks and table service

McDonald's plans to modernize 550 California outlets with ordering kiosks and table service
New ordering kiosks at McDonald's flagship restaurant in Chicago on Aug. 8. (Nam Y. Huh / Associated Press)

McDonald’s Corp. and its franchisees plan to spend $390 million to update 550 McDonald’s restaurants in California through 2019.

McDonald’s is modernizing its dining rooms, installing new digital menu boards and providing self-order kiosks inside its restaurants, among other improvements.

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The kiosks and remodeled counters also will provide for expanded table service, in which McDonald’s workers bring the food to customers.

The effort, to be announced Tuesday, is part of a systemwide upgrade of most McDonald’s outlets nationwide that will cost the company and its franchisees about $6 billion.

The changes will not result in job losses, the hamburger chain and its franchisees said.

“There will be no loss of employment and potentially an increase” in jobs, said Clay Paschen III, a franchisee in Camarillo who owns 16 McDonald’s restaurants in Ventura County and employs nearly 1,000 people.

There will be some shifts in duties because “we’re bringing the employees from behind the counter out front to engage, in a more personal way, with our customers,” Paschen said.

McDonald’s operations in Southern California had a head start on the company’s modernization plan. Nearly 500 restaurants in the region have been upgraded in the last two years, including a dozen owned by Paschen. The 550 outlets to be modernized under the company’s latest announcement are in addition to that group.

Steve Easterbrook, chief executive of McDonald’s, told analysts in January that the upgrade program — called the Experience of the Future plan — was drawing positive feedback from customers.

“They’re telling us they like the new McDonald’s better,” Easterbrook said. “They’re rewarding us with more frequent visits and they’re spending more on average when they do.”

The upgrades are part of the chain’s bid to maintain sales growth in the fiercely competitive fast-food business.

The company early this year also rolled out a new version of its Dollar Menu, with items priced at $1, $2 and $3, to help stem a slide in its customer traffic.

Despite the traffic slump, U.S. same-store sales, or sales of outlets open at least a year, have continued to rise, and they climbed 2.6% in the second quarter, compared with the same period a year earlier.

McDonald’s overall has 37,000 restaurants in 120 countries, with 90% operated by franchisees, and in the U.S. market they serve about 25 million people a day. The company’s 2017 revenue, including revenue it receives from its franchisees, totaled $22.8 billion.

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