A recent实名举报信 targeting McDonald's Beijing Tongzhou operations supervisors and related stores has circulated on social platforms. The allegations involve improper transfers of near-expiry milk slurry, the sale of expired milk slurry, and unauthorized tampering with FOB loss ledgers, and further claim that during the August heat, the milk slurry in question was transferred using ordinary vehicles lacking cold-chain transport qualifications. In response to these allegations, McDonald's China said it is conducting an internal investigation, and as of now no conclusion has been reached. Yet before that matter was settled, McDonald's found itself trending on social media over another, far "smaller" issue. Some consumers reported that after ordering at McDonald's, the system showed "order ready," but when they reached the pickup counter they were told the food was not ready and that they would have to keep waiting. After the discussion spread, McDonald's customer service said it would faithfully record the relevant issues and carry out optimization and rectification. "Early ready-marking" and the violation allegations at the Tongzhou store are the same in nature, both pointing to a distortion in how McDonald's "standardized system" is executed at the grassroots level.

For decades, standardization has been the core competitive advantage of McDonald's chain operations. After CITIC Capital came in in 2017, this system was further upgraded digitally, becoming the digital system that supported McDonald's store count growing all the way to more than 8,000 today. As for the value of this digital system, a detail from an exclusive dialogue published by China Entrepreneur Magazine last year may serve as a gauge. At the time, Zhang Yichen, Chairman and CEO of CITIC Capital and Chairman of the Board of McDonald's China, discussing McDonald's global repurchase of 28% of McDonald's China shares in 2023, mentioned that McDonald's global CEO (Chris Kempczinski) visited the Chinese market, and his most direct impression at the time was that the digitalization of the entire Chinese market was better done than in any other market within the McDonald's system. After seeing it, Chris said, "You've already reached this level, the future potential is extraordinary." Later, the share repurchase was decided.

Changes in the shareholding structure

After the repurchase was completed, McDonald's global stake in McDonald's China rose from 20% to 48%. The deal was reportedly valued at about US$1.8 billion. For Carlyle, this was equivalent to an initial stake of about US$400 million that, after more than six years of digital upgrading and store expansion, achieved an investment return of roughly 6.7 times—a veritable golden arch for McDonald's China: walk in, go through a round of digital upgrading, and walk out with a richly gilded return. The only problem is that orders suddenly surge, equipment temporarily fails, ingredients suffer losses, and consumers do not act entirely according to the system's preset scripts. When data standards diverge from real stores, whether the customer comes first or the data comes first is a choice that frontline employees must make. Facing more complex operating environments in different regions, how should this data standard be implemented? The false-ledger allegations at the Tongzhou store may be precisely the limitation of McDonald's digital system.

The McDonald's people wrestling with digitalization

If we rewind to 2017, the problem McDonald's China needed to solve was actually quite clear: a multinational restaurant company with global standards was not running fast enough in the Chinese market. In Zhang Yichen's view, one of McDonald's biggest problems at the time was slow decision-making, and the other was that its digital capabilities could not keep up with the Chinese market. When global headquarters made an app, it had to advance according to headquarters processes, and the cycle was very long, so the China team simply built its own. The Tencent mini-program took only six weeks to launch, and afterward delivery, membership, and other businesses also began to accelerate. Digitalization also reshaped McDonald's China's internal system. Zhang Yichen recalled that McDonald's China later put its internal management processes back into IT systems, and work such as scheduling and inventory counts that originally had to be done manually by restaurant managers was gradually moved online. After the transformation, the number of stores McDonald's opened far exceeded expectations. Zhang Yichen revealed that after McDonald's global CEO visited China in 2023, he was deeply impressed by the degree of digitalization in the Chinese market, believed that China's digital capabilities led within the McDonald's system, and regarded the IT-ization of internal management processes as an important reason for the marked improvement in restaurant efficiency.

Wanting to learn digitalization from McDonald's China, global headquarters repurchased in 2023 the 28% stake held by Carlyle. The cost reduction and efficiency gains brought by digitalization were the result management wanted, but restaurant consumption is a concrete process of human-to-human connection delivering delicious food. Efficiency improvement is only the basic skill of a chain store; beyond that basic skill, whether a better consumer experience can be created is what really matters. Some consumers reported that, in order to meet the 90-second meal-serving requirement, some stores click "order ready" before the food is actually completed, and after consumers receive the pickup notification and arrive at the counter, they still have to keep waiting. The number 90 seconds comes from the R2P metric that McDonald's has long used, referring to the time from completing the order at the register to presenting the complete meal to the customer. In McDonald's publicly available operational assessment materials, the R2P target is 90 seconds. This number was originally only a target figure, meant to constrain stores so customers could get their food faster. But on the store frontline, the actions became somewhat distorted. A McDonald's employee told "Shixiang" that stores continuously record the time from order entry to meal serving, and this metric enters managers' performance assessments and is also used for horizontal comparison with other stores. Managers care a great deal about the timer, and sometimes directly click "order ready" ahead of time. Employees working at the front counter can only repeatedly tell customers to "go by the number called." The emphasis on perfect digitalization failed in the actual consumer experience.

Similarly, the internal allegations against McDonald's are also a contest between people and the digital system. The whistleblower claimed that the management personnel involved improperly transferred milkshake milk slurry from the Jiukeshu restaurant to other stores without milkshake sales qualifications to be used as ordinary ice cream milk slurry. To cover up the failure to scrap near-expiry milk slurry and cross-store transfers, they modified FOB loss ledgers, semi-finished product shelf-life records, and scrapping historical data. These violations are a battle of wits between store managers and the digital system. The core contradiction is that in the digital system, ingredient shelf life, inventory, loss, and supply chain are all quantifiable—except that the importance of managing people's hearts was forgotten. After all, when a store's actual scrapping volume exceeds what the system stipulates, who bears the extra loss? If an accident causes data to exceed the standard, does the store have any room to explain? When management relies entirely on data, these problems instead become harder to solve.

Friction between digitalization and frontline store operators is something almost all chain restaurant companies have experienced. For example, "Shixiang" previously learned that after delivery order volumes increased, Luckin stores also had situations where codes were scanned in advance and drinks had not yet been packed. Headquarters increased assessments to improve delivery efficiency, but stores found the process hard to bear. Frontline employees reported that when delivery order volumes soared and they were unwilling to simultaneously add staff or extend delivery times, stores could only respond to assessments by scanning codes in advance. After chain restaurants digitalized, headquarters became increasingly reliant on data to manage stores. For frontline workers, how to deal with the digital system became more important than consumer experience and food safety.

The digital top student became a poor performer

The digitalization problems in the China region will not affect McDonald's global digitalization process. On September 23, McDonald's held an investor day at its Chicago headquarters and officially announced a new "McDonald's > NEXT" strategy, placing AI and restaurant efficiency at the core of its next-stage growth plan. The company plans to achieve about 250 basis points of restaurant-level efficiency improvement by 2030, and launch an AI-driven restaurant operations platform, ArchIQ, for automation, predictive alerts, operational diagnostics, and employee guidance. McDonald's global CIO introduced at the investor day that ArchIQ will connect functions including inventory management, equipment monitoring, order accuracy, and drive-thru voice AI. McDonald's has already accumulated billions of data points per day across more than 46,000 restaurants worldwide, and plans to invest about US$8.5 billion by 2036 to support franchisees in restaurant modernization and technological upgrades, with the next step being to let AI directly use this data to participate in restaurant operations. But as more and more operating actions are digitized, the question is whether data is helping McDonald's manage these more than 8,000 stores, or causing these stores to start revolving around data.

Beyond the friction between frontline employees and the digital system, financial report data also has an impact. In the second quarter of 2026, McDonald's global comparable sales grew 1.3%, and international developmental licensed markets grew 1.9%, but negative comparable sales in China offset part of that segment's growth. At the same time, McDonald's China is still opening stores rapidly, with the number of stores disclosed to the SEC in the first half of 2026 further reaching 8,114. Opening more stores is not enough; McDonald's China needs better profits. Take its largest competitor KFC as an example: Yum China has continuously developed flexible store formats such as Compact, Small Town, and Small Town Mini in recent years. Among them, the Small Town format is about 100 square meters with capital expenditure of about 500,000 to 700,000 yuan, while Small Town Mini requires about 500,000 yuan. By the second quarter of 2026, KFC had entered more than 2,700 cities. Although McDonald's China added more than 800 net stores in the past year, in third-tier and lower-tier cities its store count is about 2,200, with store growth of only 5.2%. By comparison, KFC's store count in third-tier and lower-tier cities has already exceeded 4,400, more than twice that of McDonald's. Whether it can secure better growth in lower-tier cities is the key to whether McDonald's China can break through its ceiling in future development.

Ningxia is one example. McDonald's did not officially enter the Ningxia and Qinghai markets until the end of 2025, opening three stores simultaneously in Yinchuan, Ningxia, while its first Qinghai store chose the drive-thru format. After entering Ningxia, some pork products normally supplied nationwide, such as the star product Sausage McMuffin with Egg, were also excluded from some menus and promotions. Ningxia needs menu changes, county towns may need store format changes, and every lower-tier market requires recalculating single-store costs; as differences multiply, overall operational complexity also becomes higher and higher. How can it ensure that the most remote store still complies with McDonald's precise data standards? In consumers' minds, McDonald's is more deeply bound to the "standardization" label than any other fast-food brand. This is also why the same behavior of servers not clearing trays would spark widespread controversy on social media when it happens at a McDonald's store, while consumers seem more tolerant of other fast-food brands. For McDonald's China, how to make a digital system born for standardization understand the operating details of the vast Chinese market and balance standardization and localization may be a harder question than simply opening stores in its sprint toward 10,000 stores.

The reason KFC's localization has succeeded is that it continuously incorporates different cities, different consumption time periods, and different store formats into its operating model. On the menu, it includes breakfast, main meals, afternoon tea, and dinner in store operations; a single store sells congee, fried dough sticks, burgers, fried chicken, rice, and coffee, and even turns local-flavor products into nationwide limited-time products. In 2021, KFC rolled out Wuhan hot dry noodles nationwide and sold more than 1 million bowls in a week. McDonald's layout in community commerce, drive-thru, transportation hubs, and different regional partners is becoming new ways of opening stores; the decision to use drive-thru for its first Qinghai store was also an attempt aimed at local consumption scenarios. But for McDonald's, the deeper it goes into lower-tier markets, the more parameters need to be adjusted.

Are consumers members or fans?

In an interview with China Entrepreneur last year, Zhang Yichen revealed that McDonald's China had more than 350 million members, with more than 90% of sales revenue coming from digital orders. McDonald's official statements currently still say that when it upgraded its membership rewards program in 2025, registered members had exceeded 300 million. Beyond the most basic parts such as coupons, points, the app, and mini-programs, McDonald's is also connecting member data with communities, social media, IP collaborations, and fan activities. A previous survey by GrowthBox said that McDonald's has formed a combination of the app, mini-programs, enterprise WeChat communities, and traffic diversion from delivery platforms, with private-domain GMV accounting for 67%. At the same time, McDonald's is also managing another kind of "member," the so-called "McDonald's believers," meaning fans truly willing to speak up for the brand on social media. Through high-frequency IP collaborations, celebrity endorsements,周边盲盒, and the "McDonald's fandom" culture fueled on social media, McDonald's has turned fast food into a form of cultural consumption. This playbook has brought extremely high DAU, astonishing social media exposure, and higher average order value driven by collaboration meal sets. McDonald's global strategy also directly mentions that in recent years it has "connected the brand with culture as never before," and regards its massive loyalty system as a core capability. From a business perspective, this solved a practical problem: turning consumers into repeat customers. But at the same time, the more fans a brand has, the more scrutinizing their gaze becomes. Once a burger becomes cultural consumption, consumers become more sensitive to every move the brand makes. Much of McDonald's recent public opinion almost all stems from this. Ordinary restaurant customers and "fans" who pay a premium for emotional value in order to collect collaboration merchandise have different standards for service. If they encounter fake "order ready" at the counter, or find a messy lobby or a shrunken burger, what they feel is not just a service downgrade, but being "stabbed in the back" by the brand.

In this respect, McDonald's and KFC are taking completely different paths. KFC certainly also does celebrity endorsements and IP collaborations, but in Yum China's strategic expression, it emphasizes more "members + digital ecosystem + new products + multi-brand synergy." In other words, KFC has a stronger transactional character; it treats users as "consumers" for refined operations, rather than as fans. Because the way brands connect with consumers differs, the mechanisms of public opinion dissemination also differ. Thus the data McDonald's values can be divided into three dimensions: at the micro level, it includes operational indicators such as meal serving, inventory, and loss; next are store count, same-store sales, and financial reports; and finally, the data becomes membership numbers, consumption frequency, and social media volume.