McDonald’s Technology Trials

At a busy McDonald’s on East 42nd Street in Manhattan, Internet access comes free with a Value Meal purchase. Or, at least, the promise of it does.

The dining room at this high-volume restaurant, just across the street from Grand Central Station, doesn’t seem to lend itself to casual Web browsing. In fact, “No Loitering” signs posted around the second floor encourage guests to eat and leave as soon as possible. There’s barely enough elbow room to wrap your hands around a Quarter Pounder, let alone table space to spread out with a laptop.

Which is probably why almost no one in the lunch crowd on this early June day was flipping open a laptop to get online or read e-mail—which would have been a futile endeavor in any case, since the access point was fried. The directions on a card given to customers hoping to sample the service yielded nothing. While the network seemed to be active, the access point wasn’t issuing the Internet Protocol addresses needed to access the Web.

A Baseline call to the support line of Cometa Networks, the network provider, confirmed the access point was not working. A Cometa representative said he would pass the report to a service rep and asked for a callback number.

McDonald’s technology trials over the past few years seem much like the McDLT and the McLean—mere flashes on the grill. For years, the company has made a variety of technology investments with mixed results.

In addition to the wireless trial, McDonald’s, which at the end of last year shelved a big project to build a real-time network, has looked into self-service restaurant kiosks and various customer payment technologies.

It also backed a number of technology ventures. In March, it partnered with other investors, including Kraft and Blockbuster, to put $80 million behind an online take-out and delivery company called, now GeoComm Systems. Not that Ronald McDonald was gearing up to bring Big Macs to your office—or even allow you to order them online for pickup; the move was explained as a marketing initiative. The purpose behind the initiative isn’t clear, and since Geocomm remains private, there’s no way to tell what financial returns it has yielded for McDonald’s—if any.

Three months after the investment, McDonald’s formed an Internet business incubator, called eMac Digital, in partnership with venture capitalist Accel-KKR. EMac Digital invested in several high-tech companies: NewPOS International, a point-of-sale developer; FSC, a franchise services company that provides accounting and back-office services; and it paid for the assets of Apigent Solutions, an application service provider. The amounts of the transactions were not disclosed. In May, McDonald’s sold, for an undisclosed amount, its share in eMac Digital back to Accel-KKR citing a need to focus on “revitalizing core business.”

Other McDonald’s technology experiments have been more low key. In 2000, McDonald’s initiated a number of wireless payment systems trials. These systems are based on radio-frequency identification (RFID) technology. Customers supply McDonald’s with credit or debit account information and are given cards with chips embedded in them. Then, when they make a purchase, they simply wave their cards over in-store RFID “readers,” which identify customers and charge their credit or debit account. Visa says fast-food customers spend 30% to 50% more when paying with a card.

The trials are in various stages—some ended without fanfare. “It’s hard to say what the future of this technology will be, but we’ll be interested to see where it goes,” says McDonald’s spokesperson Lisa Howard.

The company also tested a fingerprint-based payment system. Customers gave McDonald’s their credit or debit card information and had their prints scanned. Then, to make a purchase, customers simply pressed their thumbs against a print scanner at the register. The trial began in January 2002, but ended within a few months—customers didn’t like the idea of being fingerprinted by McDonald’s.

While the payment system trials continue, McDonald’s plans to push out its wireless access service. It’s available right now at 10 McDonald’s in Manhattan. And, according to a company Web site, it will offer the service in “several hundred restaurants in the next few months.”

Mats Lederhausen, McDonald’s business-development chief, said at the March launch of the service that “McDonald’s pioneered convenience so it makes perfect sense for us to offer our customers a great way to unwire, unwind, enjoy an Extra Value Meal and catch up on e-mail.”

At least, that was the marketing spin. But with the three-month trial period almost over, McDonald’s has done little to boost the program with customers.

McDonald’s won’t say how many have logged on to the service. However, based on the number of people asking for and using the service in the McDonald’s on 42nd Street, the total is likely low. But then, it was unclear what was wrong with the network. A promised Cometa follow-up call never came. And, after an hour, the Extra Value Meal connection time was long consumed, and the lunch crowd was clearing out.