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Table: Out of the Frying Pan...


New CEO Cantalupo is giving himself 18 months to get McDonald's back on track. He faces a daunting to-do list:

IMPROVE THE BASICS

McDonald's (MCD) lags in consumer surveys. Using mystery shoppers and unannounced inspections, it will give special help to laggard franchisees. But if they flunk again, Cantalupo vows, they'll lose their shops.

REKINDLE THE FLAME WITH FRANCHISEES

Franchisees, who own 85% of all U.S. McDonald's, face stagnant sales. So any added costs from new equipment or programs cut into margins. Cantalupo has to get them to buy into his plan.

WHIP UP SOMETHING NEW

McDonald's last big hit was Chicken McNuggets in 1983. Rather than trying to do too much in his test kitchens, Cantalupo may encourage franchisees--who created the Big Mac and Egg McMuffin--to be more creative.

STOP EATING YOUR OWN LUNCH

Even with cutbacks, McDonald's plans to add 1,230 hamburger outlets worldwide in 2003. Some analysts say that to avoid cannibalization, Cantalupo needs to shutter more than the 500 sites he plans on closing this year.


Too Cool for Crisis Management
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