The Jensen Quality Growth Investment Team Sells Position in McDonald’s Corporation (MCD)
September 2026
Company Overview
McDonald’s Corporation (ticker: MCD), headquartered in Chicago, Illinois, is the world’s largest restaurant company by systemwide sales and one of the most recognizable consumer brands globally. Founded in 1940, the company has evolved from a U.S. hamburger chain into a global, predominantly franchised restaurant platform. Today, McDonald’s operates and franchises more than 40,000 restaurants across over 100 countries, with approximately 95% of locations operated by franchisees. This highly franchised model allows McDonald’s to generate recurring, high-margin royalty and rental income while limiting the capital intensity associated with restaurant operations. McDonald’s global scale, brand recognition, extensive real estate footprint, purchasing power, and deeply established franchise system remain among its most significant competitive advantages.
Investment Thesis and What Led Us to Sell
Our original investment thesis centered on McDonald’s position as a high-quality, durable global consumer franchise with exceptional brand recognition, significant scale advantages, and an attractive asset-light business model. The company’s predominantly franchised structure supports strong margins, consistent free cash flow generation, and relatively low capital intensity, while its enormous restaurant footprint and global brand create significant competitive advantages. Historically, McDonald’s has also demonstrated an ability to adapt its menu, pricing, and operating model to changing consumer preferences while leveraging its scale to drive attractive returns for shareholders.
Over time, however, the investment case has become increasingly challenged. Several years of significant menu price increases weakened McDonald’s value perception, contributing to persistent traffic pressure, particularly among lower-income consumers. With further pricing flexibility increasingly constrained, efforts to restore traffic have required a greater emphasis on value-oriented promotions, potentially creating tension between corporate objectives and franchisee economics. At the same time, competitive intensity has increased, while recent efforts to improve restaurant hospitality and service suggest that some of the company’s challenges extend beyond affordability and into restaurant-level execution.
While we continue to view McDonald’s as a high-quality business with substantial competitive advantages, pressured traffic, diminished pricing flexibility, franchisee tension, and mounting execution challenges reduced our confidence in the company’s ability to deliver consistent long-term growth. Additionally, the increasing adoption of GLP1s for weight loss may represent an additional threat to future growth assumptions. As such, we concluded that the position no longer served its intended role in the portfolio and elected to exit.
Strategy holdings are subject to change and should not be considered recommendations to buy or sell any security. Please click here for a listing of the Quality Growth Strategy’s current holdings.
The company discussion is solely intended to illustrate the application of our investment approach and is not to be considered a recommendation by Jensen. The specific security identified is taken from a representative account of the Jensen Quality Growth Strategy and does not represent all of the securities purchased and sold for the Strategy. Our views expressed herein are subject to change and should not be construed as a recommendation or offer to buy or sell any security and are not designed or intended as a basis or determination for making any investment decision for any security. Our discussions should not be construed as an indication that an investment in a security has been or will be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of any security discussed herein.
Certain information contained in this material represents or is based upon forward-looking statements, which can be identified by the use of terminology such as “may,” “will,” “should,” “expect,” “anticipate,” “target,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Due to various risks and uncertainties, actual events or results or the actual performance of a client account may differ materially from those reflected or contemplated in such forward-looking statements.
This information is current as of the date of this material and is subject to change at any time, based on market and other conditions.
Jensen Investment Management, Inc., is an investment adviser registered under the Investment Advisers Act of 1940. Registration with the SEC does not imply any level of skill or training. Although taken from reliable sources, Jensen cannot guarantee the accuracy of the information received from third parties.
© 2026 Jensen Investment Management
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