We open Chapter 9 (Layout Strategies) in our text with a Global Company Profile featuring McDonald’s and its continuous changes to achieve competitive advantage through innovative layout. Its most recent model a few years ago was an unprecedented redesign of the layout of all 30,000 stores to create a contemporary dining area (at an average renovation cost of $300,000-$400,000 per outlet).
But Americans are eating their burgers, fries and nuggets at home, in their cars and at the office—increasingly anywhere but at the fast-food restaurants themselves. At McDonald’s and Burger King, booths are often empty. Customers pick up their orders and head out. People sitting at tables sometimes are workers on their breaks. Dine-in customers now represent less than 10% of visits in most U.S. McDonald’s restaurants, compared with around a quarter of domestic sales before the Covid pandemic, reports The Wall Street Journal (Aug. 8, 2023).
The pandemic accelerated a shift toward to-go that was already under way. Owners serving the bulk of their orders to-go found that they were more profitable and efficient to run, needing less maintenance work and staff. (It is often cheaper and less labor-intensive to pack food into bags to be eaten elsewhere than keep a dining room clean).
Some franchisees say the fast-food business is permanently shifting toward drive-through, delivery and to-go orders. They started speeding up investments in drive-throughs and online ordering. McDonald’s and other chains are developing new restaurants centered around drive-throughs and carryout, with very little or no dine-in option. “You don’t necessarily need the big dining rooms that you needed in our traditional restaurants,” said McDonald’s CEO last month.
A number of U.S. McDonald’s operators in 2018 formed an independent group to help advocate for franchisees’ interests. The group has pushed back at the burger chain on some of the remodeling requirements. U.S. franchisees are expected to freshen up their dining rooms, front counters and bathrooms with approved designs every 10 years.
Classroom discussion questions:
- Why are most fast-food restaurants reluctant to give up on the dining room?
- What will be the design of the next generation McDonald’s?