• The fast food company, through the renegotiation, is looking to earn more profits for its franchisees ahead of Uber’s IPO.
   
• The move could potentially allow other firms like Grubhub or DoorDash to make deliveries for the fast food giant.

McDonald’s, the renowned American fast food giant, is reportedly negotiating the end of its exclusive food delivery deal with online food ordering & delivery firm, Uber Eats, with the intention of ensuring more profitability to its franchisees.

Reports cite, the two firms recently held a meeting to lower the amount of fees McDonald’s paid to the delivery giant. The renegotiated terms would include significantly lowered commission rates for all the restaurants across the U.S. along with the eventual end of the exclusive delivery clause.

According to a report by Bloomberg, the renegotiations would eventually allow the fast food company’s franchisees to employ different food delivery partners, presenting a massive opportunity for other prominent food delivery service providers such as Grubhub or DoorDash. The company’s decision to renegotiate its contract comes at a delicate time for Uber, who is expected to go public next month.

The move is just one of the several recent changes made by the new McDonald’s CEO, Steve Easterbrook, who commissioned over $300 million to upgrade some of the restaurant’s important aspects, which also included the incorporation of self-order kiosks as well as a re-designing of the digital menus.

Shares of the fast food giant have reportedly almost doubled ever since Easterbrook took over the helm of the company.

Meanwhile, food delivery service is a crucial growth spot for Uber, who is likely to promote it during the road show it would be conducting with investors in upcoming weeks. This is also apparent from the fact that Uber’s IPO filing dedicates two whole pages to highlight its partnership with McDonald’s. In fact, Uber Eats accounts for approximately 10% of food sales at McDonald’s.

According to reports, the renegotiations also include a clause under which Uber Eats would be making sizable contributions towards McDonald’s national advertising.

Source Credit:  https://www.pymnts.com/news/delivery/2019/mcdonalds-uber-eats-deal-negotiations/