McDonald's is asking its franchisees to fund roughly $800,000 in remodels at more than 46,000 restaurants as part of an $8.5 billion turnaround strategy, according to Bloomberg.

The plan, dubbed "Next," was introduced by CEO Chris Kempczinski in June to improve productivity, food quality, service and efficiency, touching stores' technology, kitchens, operations and design.

The Financial Post adds that operators are already on the hook for scheduled remodels costing at least $400,000, bringing the total tab to about $1.2 million per restaurant.

The surprise is the scale of the bill landing on operators whose business is already squeezed. The Financial Post reports franchisees were surprised by the price tag announced two weeks ago and have discussed concerns in meetings organized by an elected association representing U.S. operators.

According to Bloomberg, operators worry about taking on debt and want more details on how the changes will boost sales, and they persuaded the company to delay prototype tours until next year to focus on immediate traffic concerns.

Guggenheim Securities analyst Gregory Francfort suspects franchisees will try to negotiate the price tag down 20–40 percent.

The Financial Post reports McDonald's shares plunged 32 percent from a late-February peak through the end of September, erasing nearly $80 billion of market value, and the stock is on course for its worst annual performance since 2002.

The Independent reports the company also faces an October lawsuit from a customer claiming it used AI to set prices across franchises; McDonald's denies the allegations, saying AI pricing is only a suggestion and stores set their own prices.

Rising beef, labour and equipment costs add pressure, per the Financial Post.

McDonald's has set aside funds to help some restaurants with the improvements, according to Bloomberg, and CFO Ian Borden said at the company's recent investor day that investments will be phased over time so franchisees can invest progressively as capabilities are deployed and benefits are realized.

The Financial Post says the company has set up task forces with franchisees to review financials, and that the program is meant to save operators about $100,000 in annual cash flow through initiatives like automated order-taking, with Kempczinski pledging the $8.5 billion to help franchisees reach their historically expected returns of at least 20 percent.