Making Over McDonald's

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McDesigner: Denis Weil adds flair to McDonald's plate while being ever mindful to operations. | Photograph by Christopher Sturman

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Sausage Factory: McDonald's Innovation Center is a test lab for evaluating new dining and ordering ideas. | Photograph by Christopher Sturman

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For lunch, Denis Weil chills out in the contemporary lounge he created. Reclining in a leather-backed Lipse chair designed by Wolfgang Mezger, he munches a southwestern chicken salad and sips a berry smoothie. The ambiance is foodie chic: hardwood floors, sleek white tables, a wooden-slat ceiling, and tranquil lighting from a low-hanging ceiling lamp.

Weil spritzes a lime over his salad, enjoying the laid-back vibe that lets him focus on the food. "I love this salad, it's so cravable," he coos in a slight European accent. Just then, Weil's colleague Jim Carras strides past, interrupting his reverie. "Hello, Denis, I see you are sitting in the cool section."

Weil chuckles, because, technically, he is in the cool section. His contemporary lounge sits smack in the middle of a newly revamped McDonald's in Oak Brook, Illinois. Yes, McDonald's. Weil, McDonald's VP of concept and design, has spent the past five years educating Carras (VP of U.S. restaurant development) and a host of other executives and franchisees throughout the $23 billion company that a McDonald's restaurant doesn't have to mean primary colors and fiberglass booths.

All the more funny is the fact that Weil isn't particularly cool. When the stout 49-year-old pulls up in an Audi A5, he quickly dismisses it as his "midlife-crisis car." His casual attire of a blue button-down shirt and loose-fitting khakis makes him look more like the guy in front of you at the register than some ultra-hip designer. "There is a mythology that design is a glamorous, personality-led activity," says Tim Brown, CEO of Ideo, who has consulted with Weil on McDonald's customer experience. "Denis really represents that you don't have to wear a black turtleneck to do it." Brown calls Weil an "experience engineer" who isn't afraid to tap customers for input.

Which fits perfectly into McDonald's everyman aesthetic. "It's a community center," says Weil of the restaurant, meaning McDonald's is one of the few places cheap and casual enough to be accessible to nearly everyone. "There are very few public places left where private things happen." The restaurant in Oak Brook has been divided into four "seating zones," each designed for a different activity -- chilling out, working, casual dining, and group events. That each space also connotes a different maturity level that might lead to a specific menu choice is precisely the point.

McDonald's grown-up thinking about design is part of its "Plan to Win" growth strategy, initiated in 2003 when executives realized their core markets had gorged on expansion. From 1974 to 2003, the company supersized from 2,259 storefronts in the United States and just 13 internationally to more than 30,000 in 100-plus countries, each one basically a facsimile of the one before it. "We just stopped figuring out how to make things modern and relevant," says Ken Koziol, VP of innovation. The company was battered by criticism from Fast Food Nation and antiglobalization forces, and it seemed to be searching for a future beyond burgers and fries, experimenting with home-style meals (Boston Market), burritos (Chipotle), coffee (McCafé), and even DVD rentals (Redbox). The Golden Arches increasingly looked like a corporate shrug, and its stock price dipped below $13 a share.

Since that nadir, the Plan to Win has helped drive the stock up 437%. The strategy's three pillars are menu innovation, store renovation, and an upgrade of the ordering experience. McDonald's efficiency and its continued expansion of premium menu items -- snack wraps! sweet tea! frappes! -- has helped boost the average annual store gross by 25% over the past six years to around $2 million.

The next phase, McDonald's execs say, depends on design. "People eat with their eyes first," says president and COO Don Thompson. "If you have a restaurant that is appealing, contemporary, and relevant both from the street and interior, the food tastes better."

Next year, McDonald's will launch its first total makeover campaign since the Carter administration, allocating $2.4 billion to redo at least 400 domestic outposts, refurbish 1,600 restaurants abroad, and build another 1,000. The company's European and Asia-Pacific regions have already seen success with the new styles: Second-quarter sales in Europe, for example, were up 5.2% year over year, an uptick the company credits in large part to revamped stores. Over the past two years, Weil has tested modern renovations throughout the United States, in such varied locales as Manhattan, Los Angeles, and Kearney, Missouri. In July, the company reported a 6% to 7% sales jump at U.S. stores that had been redesigned. Weil adds that when McDonald's puts enough refurbished stores in a market, customers alter their perception of the brand: The new look even makes them more likely to try new menu items.