The last time BTIG analyst Peter Saleh checked in with McDonald’s franchisees, the reality was the landscape was too volatile to form a clear picture. January weather, the lingering E. coli incident in October, and the relative infancy of a unified value push—the first in nearly six years for McDonald’s—made it challenging to circle what worked and where the setbacks remained. This was February. Have trends settled ahead of McDonald’s May 1 Q2 earnings?
Saleh said there’s been a “decidedly optimistic tone” of late owing to April gains, friendlier year-over-year sales comparisons, and a “compelling lineup of full-price promotions.”
Many franchisees, he shared, expect some halo benefit from McDonald’s Minecraft promotion, impending launch of chicken strips, Snack Wraps, and another promotion (no specifics revealed) earmarked for the fall. Lapped results also became easier in Q2, as noted.
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In particular, Saleh said, franchisees were “very bullish” on McCrispy Strips. These represent a reworked version of a past launch. Likewise, operators appreciated the concept of bringing Snack Wraps back—potentially before October—versus creating something new (there’s an execution roadmap) and focusing on one of the most-requested consumer items where demand is well chronicled. Snack Wraps left most U.S. menus in 2016, with some keeping them on through 2020. Debuted in 2006 and priced at $1.29, Snack Wraps should embed daily value into McDonald’s and offer a chance to drive check as an add-on as well as price-friendly entry point.
McCrispy Strips have begun arriving at some locations and the brand announced this past Thursday they would be available nationwide by May 4, signaling the first time since 2021 McDonald’s released a permanent menu item in the U.S. The 100 percent white meat product, coated with breading and black pepper, pairs with a new Creamy Chili Dip. They’ll be available in three or four pieces and served with one or two sauce cups, respectively (guests can swap for signature options, too, like ranch or barbecue). The past iteration, Chicken Selects, was discontinued in the U.S. in 2013.
Alyssa Buetikofer, chief marketing and customer experience officer, called out the “remarkable” demand for chicken strips in the industry and McDonald’s overall lean toward chicken. The brand in July said the category was twice the size of beef globally and growing at a faster rate. McDonald’s platform had reached parity with beef sales. The McCrispy Chicken Sandwich itself is a $1 billion brand. It’s sold in more than 70 markets and will be available in nearly all markets by the end of this year. And if you look at the top two AUV brands in the larger QSR 50 field, both stemmed from chicken (Chick-fil-A and Raising Cane’s).
In March, McDonald’s also announced plans to set up a dedicated category team focused on chicken—along with beef and beverages—to better compete against specialists like KFC or Popeyes.
One franchisee indicated they expected a 2–2.5 percent sales benefit from the revitalized launch of McCrispy Strips.
The broader sentiment Saleh observed from operators, however, was an uplifting one—the brand feels like it’s finally regaining momentum. U.S. same-store sales fell 1.4 percent in Q4 as McDonald’s worked back from the silvered onions outbreak that hit Quarter Pounders and sunk sales to a low point in early November. Trends rebounded into December and guest count growth reported slightly positive in December. Executives said McDonald’s planned to be fully recovered by Q2.
Yet the flip back to positive gains has been a longer trail. McDonald’s ceded traffic on the lower-income bracket of its customer base for multiple quarters ahead of the Q4 decline. This ignited the $5 Meal Deal and ultimately, the McValue Menu—a platform housing every deal: in-app offers, local food and drink specials, a new Buy One, Add One for $1 lure at breakfast and lunch/dinner, and, naturally, the $5 Meal Deal itself. Guest counts were running ahead of check in Q4, which was an expected byproduct of introducing this kind of platform, which, again, was the first unified value setup since the $1 $2 $3 approach six or so years ago.
“It’s often said in quick service that you either have momentum or you don’t, and the feeling from franchisees was they lost their momentum to Wendy’s and Taco Bell in the fall and winter due to the E. coli incident, but are now getting it back,” Saleh said.
The below chart shows the competitive comps set. To note headed in, McDonald’s, from 2019 to 2024, appreciated 30 percent same-store sales growth, even with negative customer counts.
Saleh’s checks suggested choppy, but muted sales trends in the flat- to low-single digit range through Q1. Franchisees cited cold weather and one less day in February as pressures, with trends in January/February difficult to gauge given the variability, but largely continuing the pace seen at the end of fiscal 2024. March was the strongest month and February the weakest (thanks to the loss of day), with January somewhere in between depending on where the store was based.
However, the kicker was sales surged forward in April through, into the mid-single digits, if not higher, Saleh said, thanks to the Minecraft promotion. Franchisees said there was an “immediate gain” on Day 1 and particular strength at dinner and with families. Saleh heard the adult collectibles ran out in two weeks. The kid’s were expected to last three. Visits to McDonald’s on Tuesday, April 1—when the offer debuted—were 12.2 percent higher than the year-to-date average Tuesday visit count for 2025, according to foot traffic analytics platform Placer.ai. The following two Tuesdays elevated by 9.5 percent and 7.4 percent as well.
Saleh’s previous February round of franchisee checks with McDonald’s centered heavily on value, as you’d expect. Saleh said then the McValue platform, $5 Meal Deal, and app/loyalty discounts were accounting for more than a third of sales—three times the company’s historical mix and the highest he could recall.
Saleh felt McDonald’s was over-indexing to value with a discount mix so much greater than the traditional average of low-teens. Some franchisees, he added at the time, indicated food costs as a percent of sales had not been this high in six or seven years, implying margin pressure. Several franchisees, reportedly, raised prices on the BOGO items before the deal went into effect to protect margins.
The BOGO represented a mid-teens percent of mix, while the $5 Meal Deal was still in the low double-digits, placing the total discount block north of 30 percent, as mentioned, when including existing app/loyalty discounts (mid-single digits).
Now? Value trends reported “fairly consistent,” with the sales mix of the $5 Meal Deal holding steady and the Buy One, Get One offer moderating a bit since its January launch, “possibly due to the Minecraft promotion.”
Value offerings, per checks with franchisees, still accounted for a sizable chunk of sales (25–30 percent), but the success of full-price items (like the Minecraft offer) and (in theory) the coming chicken strips “seems to be making this more bearable for franchisees,” Saleh said.
Opinion on the $5 Meal Deal was “fairly positive.” He heard some markets voted to extend the offering through year-end (from July), while sentiment on the BOGO dimmed as franchisees mentioned it wasn’t resonating with guests or contributing as much as expected.
Breakfast also came up often in conversation. McDonald’s recently made a clear push behind the daypart—long touted as its most profitable—with the company’s first national campaign in several years to celebrate turning 50. Franchisees, Saleh said, were widely supportive of the effort and said it’s a category they’ve shed sales over the years. Even with remote work and altered commuting habits, as well as competitive entries (like Wendy’s), operators felt there’s more the brand can do to regain visits.
Saleh said there was some mention of new menu items coming later in the year beyond McDonald’s efforts to add Krispy Kreme across the system, which is expected to flood national by the end of next year.
On that latter note, where nearly 2,000 stores, up from 1,000, are expected to offer doughnuts at 2024’s close, Saleh said there’s been “distinctly mixed opinion.” Some have been satisfied by the offering and look forward to national advertising support. Others claimed disappointing sales, supply challenges, and discomfort relying on another company’s brand.
“We heard a few anecdotes of planned market launches being delayed and inconsistent product supply to restaurants,” Saleh said, “leading some to conclude that Krispy Kreme is being strained trying to scale to the McDonald’s system.”
McDonald’s isn’t the only partner rollout in motion for Krispy Kreme. The brand is rolling through retailers like Kroger, Walmart, Costco, Publix, Target, and its first restaurant, McDonald’s. In late February, Krispy Kreme began selling doughnuts at roughly 500 McDonald’s restaurants in the New York City area, staying on track to reach about 6,000 locations by the end of 2025. The initiative also reached Kentucky, Chicago, Ohio, Indiana, Pennsylvania, and West Virginia at that time. The long-term goal, as shared, being to make Krispy Kreme doughnuts available in more than 12,000 McDonald’s restaurants by the end of 2026.
The brand did hint some mixed trends of its own in Q4. “The feedback from McDonald’s is very positive,” CEO Josh Charlesworth told investors. “They tell us it’s working well and we’re working hard with them to maximize the opportunity to make sure that the launch goes well … with local marketing, the team at McDonald’s is able to raise awareness, make sure that people know it’s on the menu, driving very strong demand and no visible cannibalization of all the sales channels.”
Charlesworth admitted demand for doughnuts at McDonald’s dipped “a little lower than expected.” He credited the decrease to the burger giant not yet marketing the doughnut partnership nationally.
“Right now, we’re focusing with them on how to make sure awareness is maintained during this local rollout phase while we wait to be nationally distributed,” Charlesworth explained. “As I said, the feedback from them is very positive and so the partnership continues to progress very well and it continues to unlock for us expansion opportunities across the country. I mentioned Costco, it’s a really big opportunity for us [that would not have been] possible without starting the McDonald’s rollout. Target, which we just started in 2024, following the announcement of McDonald’s, continues to be a big expansion driver in 2025.”
All said on Krispy Kreme and McDonald’s, it’s early to tell.
Saleh asked about tariffs and trade disruption as well. Neither seemed overly pressing to McDonald’s franchisees. “Several” noted they simply weren’t hearing a lot about tariffs within the system. McDonald’s does have some exposure to foreign products—mostly Happy Meal toys, packaging, cooking oils, equipment and electrical components, and some modest exposure on potatoes (Canada) and beef (10–15 percent imported, Saleh said).
“Franchisees didn’t seem overly concerned, though,” he explained, “noting a lot of equipment is actually manufactured in the U.S. and they frequently hear domestic alternatives are available for construction materials and other imported products.”
“Electronic components [chips, circuitry, controller boards, wiring, etc.] are one area of exposure and relative uncertainty, as franchisees noted even U.S. manufactured restaurant equipment is often reliant on components from China,” Saleh continued. “Happy Meal toys are also manufactured in China, but that is a small component of the cost structure, and we heard the company shifted production from China [was 100 percent, closer to 50 percent today] several years ago during the last trade/tariff dispute.”
Another interesting note was McDonald’s, Saleh said, recently paused its lobby remodel requirement (it’s usually every 10 years) until the Worldwide Convention next spring. The E. coli impact has also largely, but not entirely, faced from consumers’ minds.
Lastly, Saleh added, he’s heard a lot of franchise-to-franchise deal actively in the works.
As shared in its latest FDD, McDonald’s in the U.S. expanded by 102 restaurants in 2024 to get to 13,559. That’s the most locations McDonald’s has lifted by in a calendar since 2013, when it opened a net 121 restaurants.
The 2024 growth comprised 115 positive net change on the franchise side and retraction of 13 company-owned units (12,887 and 672 total respectively).
McDonald’s had 843 transfers (outlets from franchisees to new owners other than corporate), a number that rose from 672 in 2023 but was down from 1,169 in 2022.
