The McDonald’s name and golden-arches logo represent a classic American brand. But a growing share of the fast-food empire’s sales are being generated outside the United States. The company, which describes itself as “the leading global foodservice retailer,” serves tens of millions of customers in 119 countries daily. McDonald’s owns only about one-fifth of its 33,000 restaurants; the remainder are franchises, meaning they are owned and operated by independent persons or companies according to the terms of the franchise agreement. Franchising gives the restaurants local ownership that is attuned to local preferences while enabling McDonald’s to enforce quality standards and negotiate favorable agreements with suppliers.¹

Almost a decade ago, McDonald’s announced a strategy aimed at restoring growth by fixing up restaurants and adding items to the menu. Pursuit of this strategy was a global effort. U.S. customers saw store improvements such as free Wi-Fi, flat-screen televisions, and double-lane drive-through service. In China, Egypt, and South Korea, the company began offering delivery service. According to Tim Fenton, president of McDonald’s Asia/Pacific, Middle East, and Africa division, delivery sales have registered double-digit growth.

Menu expansion in the United States included the addition of premium coffee drinks. Outside the United States, a variety of menu items reflect local tastes. For example, in Germany, the Nurnburger is a hard roll stuffed with bratwursts, grilled onions, and mustard. In the Philippines, customers can order McSpaghetti, or pasta topped with sweetened tomato sauce and sliced hot dogs. A popular choice in Japan is the McPork sandwich: a patty of ground pork topped with lettuce, onions, and teriyaki sauce. In India, menus exclude pork and beef, both of which are off limits to the country’s main religious groups. There, diners can order a Maharaja Mac made with chicken.²

The importance of international markets will continue to pose a challenge for McDonald’s latest CEO, Don Thompson. Thompson, trained as an engineer, joined the company to oversee the purchase of cooking equipment and controls. With his strong analytic and people skills, Thompson became a successful manager and worked his way up to the position of chief operating officer before being appointed CEO. Thompson made it a point to travel to various countries to see McDonald’s operations, but he had never actually managed an overseas facility. In contrast, the previous CEO, Jim Skinner, managed operations for McDonald’s in Europe, the Middle East, Africa, India, and Japan. Of course, Thompson does not run McDonald’s alone. Observers hope other company executives with greater international experience will provide the necessary know-how for continued overseas growth as the company continues on a path that has already proved successful.³