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McD’s said to be paying 40% of franchisees’ beverage overhaul

OAK BROOK Ill. McDonald’s Corp. will pay up to 40 percent of the cost of rolling a new specialty coffee program into U.S. franchised restaurants, or about $40,000 per store, according to Don Armstrong, chairman of McDonald’s National Leadership Council, a franchisee group.

Armstrong said the initiative now has the support of his fellow franchisees.

Some franchisees had objected to the leasehold costs of the beverage initiative, which requires retrofitting stores to sell such beverages as espresso-based drinks, sweet tea, smoothies and bottled soft drinks. Last month, McDonald’s USA president Don Thompson estimated the expense at $100,000 per restaurant. McDonald’s executives had said the expanded drink line would add $125,000 in annual sales to each restaurant.

The new beverages, now being tested in some 800 stores, are not expected to be rolled into all 14,000 domestic McDonald’s units until mid-2009. The rollout is expected to cost about $1.4 billion in total.

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