70 / ENTREPRENEUR.COM / January-February 2018
McDonald’s
Founded/ 1955
Worldwide units/ 37 ,011
U.S. units/ 14 ,079
Cost to open a store/ 1 million–$2.21 million$WHEN STEVE EASTERBROOK
took over as president and
CEO of McDonald’s in spring
2015, the world’s most recog-
nizable fast-food chain was in
the midst of an identity crisis.
Chipotle Mexican Grill and
its fast-casual brethren were
being hailed as the cooler,
healthier dining option, with
hormone-free meals and
stores that resembled lounges
and cafés more than utilitar-
ian pit stops. In Asia, it faced
a food-safety crisis after OSI,
a supplier that had worked
with McDonald’s since the
days of founder Ray Kroc, was
found to have repackaged old
meat for sale. And months
before Easterbrook’s first
day on the job, McDonald’s
posted its first annual drop in
same-store sales in 12 years.
According to Euromonitor,
the chain’s market share of
the U.S. fast-food market slid
from 17.4 percent in 2012 to
15.4 percent in 2016.
“The pace of change
outside McDonald’s had
been quicker than the pace
of change within,” says
Easterbrook, a decades-long
McDonald’s veteran, who,
before taking over, had been
credited with revitalizing the
company’s U.K. business.
He quickly set the course
for a rigorous turnaround in
global operations that refo-
cused the company’s vision—
and the results have pushed
the Golden Arches to the top
of this year’s Franchise 500
list. The company has been on
a hot streak, giving consum-
ers their much- requested
all-day breakfast, as well as
value items it once took away.
Having hit upon a sweet spot
between value and quality
within its menu, store sales
at McDonald’s 37,000 global
restaurants are now up
6 percent, according to its
third-quarter 2017 results.
And thanks to hitting its
target of selling off more than
4,000 company-owned stores
to franchisees, earnings per
share soared more than
50 percent from the previous
quarter. Easterbrook has also
been plowing more than $1
billion into McDonald’s stores
to reimagine them as “experi-
ences of the future,” complete
with touch-screen ordering
kiosks and meal delivery.
Meanwhile, Chipotle,
dogged by a string of E. coli
and norovirus outbreaks,
was recently blamed for the
“near-death experience” of an
actor on The CW’s Supergirl.
Its stock price tumbled for
almost eight consecutive
quarters before bottoming
out last November. The
tables, it seems, have turned.
EASTERBROOK’S first order of
business was to restructure.
McDonald’s needed to move
faster—no small feat for one
of the world’s largest private
employers. “Part of my mind-
set early on was, how can we
organize ourselves, as a large,
somewhat complex business,
so we can adapt and be more
nimble?” he says. “Instead of
using our size as an excuse,
[how can we] amplify our size
as an advantage and respond
to customers?”
Within three months,
Easterbrook began stripping
away layers of bureaucracy
from McDonald’s global
operations. He regrouped
and consolidated each market
segment by need, instead of
by geographic region, which
had become inefficient over
time. As a result of the move,
for example, McDonald’s split
China and South Korea out
of its former Asia/Pacific/
Middle East/Africa (APMEA)
region and moved them into
its “high-growth” category,
along with other markets
with franchising potential, PHOTOGRAPHS COURTESY OF MCDONALD’S CORPORATION