McDonald’s won’t pursue real estate investment trust

SHARE McDonald’s won’t pursue real estate investment trust

McDonald’s will not pursue spinning off its real estate assets, officials said Tuesday. | AP file photo

McDonald’s says it will not pursue spinning off its real estate assets.

The world’s largest hamburger chain, which is in the midst of a turnaround plan, had been considering forming a real estate investment trust partly because of the potential tax advantages it could provide.

But Chief Administrative Officer Pete Bensen said during McDonald’s investor meeting Tuesday that any possible value that could have been created with the REIT was outweighed by “significant financial and operational risks” to the business and the ongoing progress of its turnaround.

McDonald’s Corp. also said that it is now looking to refranchise 4,000 restaurants, up from a prior target of 3,500 restaurants. The Oak Brook company said this puts it in position to meet its new longer-term goal to be 95 percent franchised.

McDonald’s is making a number of changes in the U.S. that it hopes will set the stage for a turnaround. Tweaks to food preparation included toasting buns longer and searing burgers to make them juicier. For its Egg McMuffins, the company switched back to butter and regular English muffins, instead of margarine and whole grain muffins.

A new buttermilk chicken sandwich, which is positioned as a premium offering, is supposed to boost perceptions about food quality — and help fetch a little more money. The company has also been simplifying its menu to speed up service and improve order accuracy.

The company also said Tuesday that its board approved a 5 percent increase in its dividend. McDonald’s will pay a quarterly dividend of 89 cents on Dec. 15 to shareholders of record Dec. 1.

Looking ahead, the chain said it still expects sales at established locations worldwide to rise for the final three months of the year. That’s a key metric that strips out sales from locations that have opened or closed in the past 12 months. In the third quarter, sales at established U.S. locations edged higher, snapping a streak of about two years of quarterly declines.

McDonald’s expects sales growth of 3 percent to 5 percent next year and capital expenditures of about $2 billion, to be spent on opening about 1,000 new restaurants and reinvesting in existing locations.

The Latest
No officers were injured in the shooting, police said. One person was arrested and a gun was recovered at the scene.
The former R&B star is set to go to trial in Chicago — again — on Aug. 15. Here’s a rundown of what’s happening and why.
Sánchez habló con La Voz Chicago sobre su más reciente libro, “Llorando en el baño: Memorias”, un libro que toca todos los temas delicados a los que las latinas se han enfrentado en la vida.
Lizbeth Urbina, de 24 años, es madre soltera de dos hijas, de 1 y 3 años, y trabaja en una zapatería en La Villita.
El automóvil no se detuvo después del choque, según la policía.