By Julie Jargon
McDonald's Corp. could start offering all-day breakfast
nationwide in October, just months after it began testing the idea,
according to a memo sent to U.S. franchisees and employees on
Tuesday.
Customers for years have been asking McDonald's to serve its
McMuffins and pancakes beyond the late-morning cutoff of around
10:30 a.m., but the company held off because of the operational
challenge to prepare breakfast items alongside hamburgers and
chicken nuggets.
The company in March began adding food-preparation space to
restaurants in San Diego, and later in Nashville, to accommodate
all-day breakfast. The tests have been encouraging, according to
Tuesday's memo, which was reviewed by The Wall Street Journal. The
memo, sent from LeAnn Richards, a Tucson, Ariz., franchisee who
heads a task force studying all-day breakfast, said franchisees
need to be ready for the potential launch of all-day breakfast as
soon as October.
"Serving all-day breakfast is likely the number one request we
hear from McDonald's customers," McDonald's said in a statement.
"We're testing it out in a few markets to learn more about this
possibility," it said, but "there's no news on this yet."
McDonald's already has been struggling with the complexity of
its kitchen operations, after adding numerous menu items over the
years, from fruit smoothies to oatmeal, that have resulted in
slower service and customer complaints about incorrect orders. In
recent months, the chain has added options for people to customize
their burgers with different toppings and buns.
If McDonald's can overcome the complexity issues that come with
offering all-day breakfast, it could provide a meaningful boost to
sales and a coup for new Chief Executive Steve Easterbrook. He has
been pushing change to revive declining sales at the fast-food
company. He has announced plans to remove antibiotics from chicken,
simplify the drive-through menu and offer products priced between
the dollar menu and premium sandwiches. McDonald's reports
second-quarter earnings on Thursday.
Mr. Easterbrook must get franchisees on board with changes that
require added cost. After years of remodeling and building new
restaurants, many franchisees have ended up in debt. A recent
survey revealed that relations between franchisees and the company
are at the lowest level in more than a decade.
Before all-day breakfast can become a reality, various
franchisee committees have to approve it. Franchisees need to place
equipment orders by mid-August and decide by then whether they want
their new menu boards to feature biscuits or muffins for the
breakfast sandwiches, according to the memo.
"We want to make it clear that we are not being presumptive that
this will launch, but we want to make sure the system is ready to
turn quickly and launch all day breakfast should all of you believe
and support that direction," Ms. Richards stated in the memo, which
said it was also on behalf of Charlie Strong, president of
McDonald's U.S. central zone.
Initial votes from franchisee leadership groups will be held
Aug. 14, and all franchisees will be given a chance to vote after
that, at a time not specified in the memo.
Write to Julie Jargon at julie.jargon@wsj.com
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