McDonald's and Torex Retail Holdings Ltd., licensor of the NewPOS point-of-sale software used in thousands of the quick-service chain's restaurants worldwide, have ended their collaboration and in the future each will refine the software as they see fit, they said.
The terms of the "new licensing arrangement" were not disclosed by either the restaurant chain's Oak Brook, Ill.-based-parent, McDonald's Corp., or Torex of Dunstable, England. McDonald's once held a financial interest in Torex's predecessor company, U.S.-based Savista Corp.
"McDonald's and Torex have a history of collaboration on restaurant ordering technology. In the past this included purchasing Torex's NewPOS-POS software licenses for use in McDonald's restaurants in multiple countries," said Jack Creamer, McDonald's vice president of information technology for restaurants. "The working relationship with Torex has evolved, and going forward McDonald's and Torex will be developing the POS software independently to meet each company's own unique needs."
Indicating that McDonald's will, indeed, continue development work on NewPOS, Creamer added, "Improvements to our POS system is just one of the ways McDonald's continues to enhance our customers' experiences in our restaurants."
Torex said the new agreement gives McDonald's a license to use NewPOS-POS software in its restaurants worldwide and that Torex "will be available to McDonald's on a consultancy basis to plan, develop and deploy the POS system as requested." The vendor added that it "will continue to develop NewPOS-POS in line with customer and market drivers and is committed to a significant development and sales budget to expand its QSR market share," which it said covers dealings with multiple international quick-service chains besides McDonald's, including Häagen-Dazs, Servex, Caffe Negro and Lego theme parks.
In its statement, Torex said the "evolving relationship" with McDonald's is an example of the vendor's "flexibility" in dealing with customers, but it gave no information about who wanted the change or why. McDonald's declined to comment on the matter.
Torex officials noted that McDonald's had deployed NewPOS software in restaurants in 84 countries on a wide range of platforms, including handheld terminals, kiosks and conventional POS terminals. They said that, counting the locations of all hospitality industry customers, Torex's software is installed on more than 75,000 terminals worldwide.
Word of the new arrangement between McDonald's and Torex came just months after the software developer's financially troubled parent, Torex Retail PLC of Banbury, England, sold it to Torex Retail Holdings Ltd. TRHL was an acquisition vehicle created by New York-Based Cerebus Capital Management LP to acquire selected Torex Retail assets, including the McDonald's business partner, for $415 million and the assumption of debt.
The seller in last year's transaction, Torex Retail PLC, itself had only purchased what was then called Savista Corp., a little more than a year earlier.
In 2003, McDonald's divested its interest in eMac Digital, an Internet and technology business incubator that it created with investment firm Accel-KKR to fund Savista Corp. and other ventures. At about the same time, McDonald's selected as its global POS platform Savista's NewPOS.
The strategic and potential financial importance of POS software to McDonald's has been mentioned by the chain's executives more than once in recent years.
In late 2005, Creamer remarked that POS software was "at the center of many of our innovations." A year later, Matthew Paull, McDonald's chief financial officer at the time, credited NewPOS with helping employees serve 13 additional cars per hour in the drive-thru lanes of test restaurants thanks to improved order accuracy and efficiency in order processing. He said such an improvement in throughput was roughly akin to a 1-percent gain in same-store sales.
McDonald's indicated in 2005 that about 5,200 restaurants in 63 countries — but relatively few in the United States — were using NewPOS and that the chain was shooting to increase that number to 14,000 units by the end of 2007. As of late January, the chain declined to update the progress of its NewPOS deployment effort.
Torex's recent statement that McDonald's is using NewPOS in 84 countries, compared with the 63 countries mentioned by the chain in 2005, suggests there may have been hundreds, if not thousands, of additional NewPOS installations beyond the 5,200 mentioned by McDonald's two years back.
McDonald's Corp. operates or franchises to others more than 31,000 restaurants in118 countries worldwide.