MCDONALD'S TO GO HOMEY IN TEST UNIT

By Published on .

Most Popular
OAK BROOK, Ill.-McDonald's Corp.'s Hearth Express, a test unit offering lunch and dinner fare in a homelike setting, will open early this fall in suburban Darien.

The 2,000-square-foot restaurant will resemble a single-family home with gables and an indoor fireplace, Ed Rensi, president-CEO of McDonald's USA, told shareholders at the company's May 27 annual meeting.

Hearth Express will serve food more like the Boston Chicken chain than a typical McDonald's, Mr. Rensi said. Customers will choose among a variety of entrees and side dishes displayed behind a glass counter. Menu items will include chicken, ham, meat loaf, potatoes and corn, with prices ranging from $2.50 for a sandwich to $7.50 for an entree platter. The restaurant will also offer a drive-through window, home delivery and catering. McDonald's has no plans for a second Hearth Express location.

In addition to the 300 to 400 traditional restaurants McDonald's will open this year in the U.S., Mr. Rensi said, the chain will build 125 to 225 alternative locations, not including a separate deal with Wal-Mart Stores. Continuing to search out new venues, McDonald's recently opened a unit in a post office in suburban Palatine.

Despite the rapid development of domestic alternative locations, the bulk of McDonald's future growth is clearly overseas, where there's one McDonald's restaurant for every 600,000 people-compared with one for every 29,000 Americans. Five years ago, international business accounted for 31% of the chain's systemwide sales; today that number stands at 41%. International expansion is slated at 600 to 800 locations annually.

Global brand McDonald's is one of the company's best assets. Chairman-CEO Michael Quinlan said that while McDonald's accounts for 2.4% of worldwide fast-food units, it has 6.8% of sales. "The McDonald's brand equity makes the difference," he said.

In this article: