McDonald's franchisees to new CEO: Get back to basics, fast

McDonald's Golden Arches are seen at the Union Square location in New York on Jan 29, 2015. -- PHOTO: REUTERS
McDonald's Golden Arches are seen at the Union Square location in New York on Jan 29, 2015. -- PHOTO: REUTERS

LOS ANGELES (REUTERS) - McDonald's franchisees have a fast order for the fast food giant's new CEO - get back to basics. In interviews franchisees and advisors to restaurant owners say they hope the new chief will clean up a huge menu to focus on burgers and fries.

McDonald's on Wednesday announced that Chief Brand Officer Steve Easterbrook would replace Don Thompson as chief executive after he had held the post just two and a half years.

Easterbrook, 48, turned around McDonald's operations in the UK, where he was born, by putting the focus back on its burgers and burnishing consumer perceptions about the company, according to press reports.

A cricket enthusiast who earned a reputation in the UK as being funny, fair and a lover of simplicity, Easterbrook will also be a rare McDonald's CEO in that he has experience running other restaurant chains.

Although he spent some two decades at McDonald's, from 2011 to 2013, Easterbrook ran PizzaExpress, a British chain that markets itself on quality and freshness, and then became CEO at Wagamama, a Japanese-inspired noodle chain, before returning to McDonald's.

"I will be very curious to see if this new guy continues on with what Thompson has been doing ... or if he will put some new ideas in. I'm very hopeful," said Kathryn Slater-Carter, who operates one of McDonald's restaurants in Daly City, California.

The world's largest fast-food chain, with more than 36,000 restaurants around the globe, is struggling to appeal to younger and more upscale diners who are seeking out fresher, healthier fare.

Over the last few years, McDonald's has expanded its menu to broaden its appeal. While that effort initially bolstered sales, franchisees now blame sprawling menus for slowing down service and are calling on the chain to dump menu items ranging from espresso to McWraps.

Easterbrook's global chops may come in handy as the chain fights to recover from a food scare in China that battered Asian sales and wrestles with economic weakness and political upheaval in Europe, its top revenue market. Its image in the United States is also getting a drubbing from McDonald's burger flippers, who have held frequent protests calling for higher wages.

Monthly sales at established U.S. restaurants increased in fewer than half of the 30 months he was in the top job.

The company attempted to stem market share losses to smaller and more nimble rivals ranging from Wendy's Co and Burger King to Chipotle Mexican Grill Inc and Chic-fil-A with frequent specials and giveaways.

While such discounts helped the parent company, which gets royalties from franchises based on revenues, they squeezed the profits of franchisees. Beyond that, a push to rebuild or remodel most restaurants burdened many franchisees with debt but didn't always deliver a promised pop in sales.

Franchisees want to drop McCafe espresso drinks, which critics say don't sell enough to pay for the electricity used by the machines that make them. Thompson spearheaded McDonald's McCafe expansion during his stint as head of the U.S. business.

They also want to cut the number of Happy Meal options, to get rid of the hard-to-make McWraps and other poorly performing menu items, and to eliminate redundant items such as the McDouble and Double Cheeseburger.

Thompson had made some efforts to trim back menus, but franchisees say they didn't go far enough.