TOKYO--The operator of the McDonald's chain in Japan said Thursday it expects to post deep losses in the current year and that it would be closing 131 of its stores.

Unveiling plans to turn around its struggling business, McDonald's Holdings Co. (Japan) Ltd. said it expects to rack up a Yen38 billion ($318.8 million) net loss in 2015. It said it would revamp about 2,000 of its restaurants over a four-year period.

The Japanese affiliate of the world's biggest fast-food chain has been grappling with a series of food contamination cases, including a human tooth found inside a pack of french fries in Osaka, and an incident in Fukushima prefecture where a child was hurt by a piece of hard plastic in a chocolate sundae. It was also hit hard by a Chinese media report last year that accused supplier Shanghai Husi Food Co. of selling expired meat to restaurant companies.

The projected loss is worse than the Yen21.84 billion loss the company posted for 2014, its first annual loss in 11 years. McDonald's Japan, which is 50%-owned by McDonald's Corp. of the U.S., also forecasts that systemwide sales in 2015 will be down 14.4%.

Saying that the company accepts responsibility for recent results and the disappointing forecast, McDonald's Japan said President and Chief Executive Sarah Casanova would take a 20% pay cut for six months. It also said it would cut by 10% the remuneration for board members who are still with the company and were on the board in 2014 for six months.

The company also said it is seeking early retirement from about 100 workers at its headquarters.

McDonald's Japan said it expects to return to profitability for 2016.

A set of "customer-focused" initiatives will include a new loyalty program with coupons and a mobile app to gather real-time customer feedback.

McDonald's Corp. in the U.S. is also struggling through a rough patch of slumping sales, and pessimism has grown among some McDonald's franchisees in the U.S. about the fast-food giant's efforts to reverse lagging sales and rebuild its damaged image, according to the latest survey of franchisees by Janney Capital Markets analyst Mark Kalinowski.

Respondents to the quarterly survey, which covers about 25 franchisees who own a total of about 215 U.S. McDonald's restaurants, rated the outlook for the business over the next six months as between poor and fair.

A spokeswoman for the Oak Brook, Ill., company said about 3,100 franchisees run McDonald's restaurants across the U.S. "We value the feedback from our franchisees and have a solid working relationship with them," she said. "Less than 1% of them were surveyed for this report."

Several respondents complained about the costs involved in Chief Executive Steve Easterbrook's push to revamp the chain--including a plan to raise wages at company-operated stores, a move that will pressure franchisees to increase pay as well.

Megumi Fujikawa and Annie Gasparro contributed to this article.

Write to Shawn Schroter at Shawn.Schroter@wsj.com

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