'Think iPod'
What will the new McDonald's look like? "Think iPod: clean lines, simplicity," says Miologos. The signature mansard roof? History. "The big red roof looks too dated today," says John Bricker, creative director at design firm Gensler's brand-strategy arm, Studio 585. It's being replaced by a flat roof topped by a newly designed, contemporary, golden sloping curve. Ronald McDonald appears safe: The mascot was given a leaner, sportier look just last year. And the iconic twin golden arches will still play a big role in the branding.

After conducting a global contest among design firms, the burger giant chose New York-based Lippincott Mercer in the summer of 2004. Peter Dixon, the design firm's creative director, spent 2005 with McDonald's internal architecture and design team testing and prototyping the new look, which is being officially rolled out this year. Lippincott Mercer, which until it signed McDonald's had few clients in the restaurant business, has made a name for itself working with companies going through a shift in brand identity and image. In 2002, for example, it helped redesign Nissan dealerships to reflect the company's launch of several new upscale cars. Within a year, the redesigned dealerships saw an average of 57% sales growth, vs. 33% overall.

The traditional McDonald's yellow and red colors will remain, but the red will be muted to terra cotta and olive and sage green will be added to the mix. To warm up their look, the restaurants will have less plastic and more brick and wood, with modern hanging lights to produce a softer glow. Contemporary art or framed photographs will hang on the walls. Bob Dixon, a private school fund-raiser in Chicago, says of an Oak Brook, Ill., restaurant that sports the new design: "It's bright, it's lively, it's clean. It stunned me how beautiful it was."

The dining area will be separated into three sections with distinct personalities. The "linger" zone will offer comfortable armchairs, sofas, and Wi-Fi connections. "The focus is on young adults who want to socialize, hang out, and linger," says Dixon. Brand consultant Robert Passikoff, president of Brand Keys, a brand consulting firm, says that Starbucks has raised the bar: "A level has been set by Starbucks, which offers the experience of relaxed chairs and a clean environment where people feel comfortable hanging out even if it's just over a cup of coffee."

The "grab and go" zone will feature tall counters with bar stools for customers who eat alone; plasma TVs will offer them news and weather reports. And in the "flexible" zone, families will have booths featuring fabric cushions with colorful patterns and flexible seating. The new design allows different music to be targeted to each zone.

A 21st-century look is expensive
McDonald's won't confirm the cost of a redesign. Richard Adams, a former franchisee and consultant to current owners, estimates they will have to pay $300,000 to $400,000 to renovate an existing outlet -- an amount roughly equal to a restaurant's annual profit. Tearing down a store and rebuilding from scratch could cost $1 million, Adams says. The franchisees will have to pay for the renovations themselves, which has some of them seething. "Many franchisees are dead set against this change, especially because they already spent millions remodeling their restaurants in the past four years," says Adams. In 2002, when McDonald's introduced premium salads, it did ask a number of franchisees to spruce up their dining rooms, but it wasn't a major redesign project. McDonald's says it worked collaboratively with franchisees to jointly develop a strategy for the current "re-imaging" of its restaurants.

In a recent letter to management at the company's headquarters in Oak Brook, about 160 franchisees from North Carolina spelled out why they oppose the new plan. They say the roof change erases 40 years of brand building and that "there has been no business case presented which justifies the change." Says Frederick Huebner, who owns 11 McDonald's in North Carolina: "We don't want to lose the iconic look of what we've got." If franchisees balk, McDonald's can refuse to renew their contract.

Right now, only 20 recently opened restaurants in the U.S. sport the makeover in its entirety. Another 20, primarily in Tulsa, Okla., and Columbus, Ohio, have been completely remodeled. All brand-new restaurants will have to hew to the redesign blueprints, and by the end of 2006, more than half of the 13,720 U.S. restaurants will feature some element of the design. Says Gensler's Bricker: "It's something that McDonald's has to do if it wants to be part of the 21st century."