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You Want Some Design With Those Fries?

Some McDonald’s outlets are getting a fresh look inspired by a European design. But will that help franchisees—which have to pay for more than half the cost of the new look—sell more burgers?

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McDonald's

Curing a Big Mac attack with a visit to McDonald’s has gotten a little more chic in a handful of the fast-food giant’s 250 New York City locations. Diners are treated to egg chairs, wide tables, bright walls, and fresh art deco panels, elements based on a store model created by French interior designer Phillipe Avanzi, the mastermind of similar redesign efforts at McDonald’s locations in Europe.

One of the redesigned Manhattan stores belongs to Jim Lewis, a 14-store franchisee who moved to New York from Michigan to help his uncle run the franchise and ended up buying it. Lewis said he was sold on the Euro look last year, when he and corporate officials, along with a handful of other New York City franchisees, visited some of the Avanzi-designed stores in London and in Paris.

“Once we stepped into those locations, the consensus was clear among everyone that this would be a very special project to bring back to New York City,” said Lewis, whose restaurant on Broadway near New York University is one of four in the city that are debuting the Avanzi redesign in the United States.

Lewis declined to say how much the redesign cost, though he did say it was his personal decision to renovate the restaurant.

According to McDonald’s corporate officials, who spoke to analysts and franchisees last month, the company is bullish on an accelerated re-imaging of its U.S. restaurants. McDonald’s corporate said it has the capital to contribute up to $200,000 per remodel, with operators paying between $250,000 and $500,000.

Around 85 percent of McDonald’s 14,000 domestic restaurants are franchise owned. Since 2003, around 7,000 of them have gone through some sort of remodeling.

So far, the company’s first-quarter earnings statement for 2010 suggests the new look is having an impact. Global same-store sales were up 4.2 percent, with the U.S. sales up 1.5 percent. But in Europe, where the new designs were first rolled out starting in 2007, sales were up by 5.2 percent. In a company press release, McDonald’s directly attributed part of European spike to the Avanzi designed “restaurant re-imaging.”

Experts who study the impact of design on consumer decisions say now is the time for restaurant developers to create environments that are not only interesting, but also offer “experiential dining.”

“In many ways, the streets have become the menu today. Consumers, whether in a car or walking down a street, may not have not made a conscious decision where to eat, so the ability to visually differentiate one’s brand quickly in the consumer’s mind from other competitors becomes much more paramount,” said National Restaurant Association senior vice president Hudson Riehle.

Add to that, the New York City redesign also appears to be targeting a new segment of consumers.

“McDonald’s isn’t stupid,“ said Stephani K.A. Robson, senior lecturer at the Cornell University Center for Hospitality Research. She said that in addition to new menu items that attract the coffee crowd, McDonald’s can create physical environments that go after the sophisticated types who may have shunned fast food.

Besides, on a more general basis, she said people’s overall expectations for restaurant environments have been increasing over the past decade or so. “If you read food magazine reviews of restaurants from 10 or 15 years ago, it was all about food and service,“ said Robson.

An expert on restaurant design psychology, Robson said her research shows that environment used to be something mentioned in passing. “Now, the decor and environment is something people care about, they talk about—it’s much more salient,” she said.

In other parts of the country, Lewis said McDonald’s will take a “holistic approach to redesign, which includes contemporizing interiors and exteriors, upgrading infrastructure, and enhancing restaurant capacity.”

Cornell’s Robson says the new look at McDonald’s is part of an emerging trend, where chains are looking to refresh and update. For example, McDonald’s competitor Burger King said in 2009 it would begin overhauling many of its 12,000 stores worldwide with a more sleek interior that includes industrial-inspired corrugated metal and brick walls, as well as red-flame chandeliers.

Robson said these efforts are not only showing up because of the added appeal they bring, but also because brands, like everything else, get tired. She said the challenge is making sure you still communicate the same brand message.

“The trick is for the restaurant, whether it’s a chain or an individual organization, to know what their DNA is and to not lose that DNA,” Robson said.


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