McDonald's franchisees question hand-breaded chicken

McDonald’s franchisees have a problem with the company’s hand-breaded chicken test: the chickens are too big.

The fast-food giant is expanding its test of hand-breaded chicken to 200 locations in the U.S. and Ireland, believing that the upgrade in quality will make the company more competitive with chains like Chick-fil-A and Raising Cane’s.

Yet operators, who would be expected to pay about $100,000 per location for the equipment to make the products, don’t know whether that’s true. Franchisees are concerned that the chicken McDonald’s wants to use for the products are “too big and the meat is too tough,” according to BTIG analyst Peter Saleh.

Franchisee concerns

Multiple franchisees told Restaurant Business that they agreed with this sentiment, with one operator saying that “no one wants hand-breaded except for” CEO Chris Kempczinski.

McDonald’s has long maintained that its U.S. restaurants could do hand-breaded chicken, citing the experience of restaurants in other global markets. “We have the benefit of doing it in 10,000 restaurants in Asia,” Kempczinski said in an interview last month, “so it’s not like we’re newbies to this.”

“But of course, the menu is slightly different in the U.S. The guest count volumes are different in the U.S. So there are different conditions that I think are unique to each country that you’ve got to make sure you’ve thought through and understand how to do it. But it’s being done in a very planful sort-of way. Ultimately, when this gets deployed, you know we’ve thoroughly tested it with our franchisees and gotten everyone confident it’s something we can deliver.”

Hand-breaded chicken would certainly be a risk for McDonald’s. The product would not just require new equipment, it would also require an employee devoted to making the chicken.

There are some food safety concerns, too, given that the chicken would be raw when cooked. It also comes in pre-marinated and frozen and needs to be thawed before it is cooked, presenting other potential challenges.

Operational challenges

Burger King’s experience with its Ch’King chicken sandwich also gives some operators pause.

It was widely considered one of the best such products on the market when it was introduced in 2021. But operations challenges stressed franchisees. Sales struggled. Profits fell and operators closed units and filed for bankruptcy, ultimately prompting a multi-year brand overhaul. The product was discontinued after less than a year and a half.

McDonald’s, which generates larger volumes per location than Burger King, is likely better equipped to handle hand-breaded chicken.

But some operators want the chain to use smaller chickens, similar to those used by chicken chains like Popeyes and KFC. That would likely require an overhaul of the company’s, which would cost money and take more time. The company, according to operators, is not willing to take that step.

The franchisee worries about hand-breaded chicken come as McDonald's has started asking operators to spend an estimated $800,000, on top of upcoming remodel costs, to fund the company's "Next" initiative, which involves technology and other improvements. The company is planning to help with those costs, but some operators have told us they are skeptical about the potential from the additional spending.

Market strategy

McDonald’s is intent on winning more share of the chicken market, believing that it’s crucial to overcoming an otherwise difficult fast-food market where traffic is challenged. The company has created a “task force” of owner-operators to look at making improvements to its chicken products.

McDonald’s has been testing the products at some stores in Chicago, featuring hand-breaded chicken strips, wings, and sandwiches. The company said that it plans to make refinements as the test expands.

But executives have noted that customer feedback to the early test was positive. Jill McDonald, McDonald’s global chief restaurant experience officer, told analysts at the company’s Investor Day presentation that a five-point increase in customer perception of “great tasting chicken” translates to more than a half-point share gain in the product.

“Improving taste and quality is a meaningful driver of growth,” she said. She noted that, in Chicago area test restaurants, “Customer feedback has been fantastic, with double-digit increases in taste and quality scores.”

UPDATE: This story has been updated to correct Jill McDonald's title and to note that the chicken test has not yet been expanded.