McDonald's Corp. (MCD) wants to know: Would you like a side of
green building with your Big Mac?
The golden-arches restaurants and some other fast-food chains
are starting to look seriously at building their locations in an
environmentally friendly manner, starting with some test stores.
They are citing the desire to be responsible corporate citizens and
to reduce costs through efficiencies as reasons to take this new
path.
This change could open up a significant market for
green-building technology companies. According to the National
Restaurant Association, as of 2007 there were 250,000 fast-food
restaurants in the U.S., the most recent figure available.
McDonald's alone has 14,000 restaurants in the U.S. and 32,000
worldwide.
The latest "green" McDonald's store opened this week in Cary,
N.C. It is the company's second in the U.S. to be built according
to the independent, non-profit U.S. Green Building Council's
Leadership in Energy and Environmental Design gold-level standard,
which is the second-best out of four LEED levels. The first such
store in the U.S. opened near Chicago in August 2008.
Some of the buildings' features include lamps that use
light-emitting diodes, energy efficient appliances and heating and
cooling systems, daylight-harvesting technologies, sustainable and
recycled materials, low-flow toilets and recycling bins.
Bob Langert, McDonald's vice president corporate social
responsibility, said in an interview that by the end of the year
there will be 10 McDonald's locations worldwide built to green
standards, up from seven now. The first such restaurant opened in
Sweden in 2000, but in the past two years green building has been
taken much more seriously by the Oak Brook, Ill.-based company, he
said.
"We have been accelerating our efforts to learn more and test
more," Langert said.
Company officials are analyzing data from the Chicago and Cary
stores to determine what green-building measures work best and to
evaluate response from employees and customers.
McDonalds is also leading by example on green building. Its
corporate headquarters recently received the USGBC's highest LEED
certification of platinum, Langert said. Other restaurant chains
and their franchisees including Denny's Corp. (DENN), Chipotle
Mexican Grill Inc. (CMG) and Subway, part of Doctor's Associates
Inc., are testing green-building practices at some locations as
well.
Milford, Conn.-based Subway designed an environmentally friendly
building plan called eco-stores for its franchisees, opening its
first eco-store in Kissimmee, Fla., in November 2007. The company
now has six stores built to green standards and 10 more in
development or construction, Elizabeth Stewart, marketing director
and head of the sustainability initiative for Subway, said in an
interview.
"We do expect more franchisees to open eco-stores in the future,
and/or take eco-store elements and incorporate them into their new
or existing stores," Stewart said. "We also anticipate these
numbers will increase as people, in general, become more familiar
with the importance and understand the benefits of sustainability
programs. In fact, we expect that prospective franchisees will seek
us out partly because of our involvement with green
initiatives."
While Subway doesn't give its franchisees money for
redevelopment, it provides guidance and its corporate standards
include use of recycled paper goods and green cleaning supplies. At
the corporate level, the company has been reducing its
greenhouse-gas emissions and packaging materials, Stewart said.
Ric Richards, owner/operator of the Cary, N.C., McDonald's
restaurant, said in an interview from inside his new store that
McDonald's corporate gave him some money to rebuild what had been
an older, existing location, as it usually does.
However, the company didn't recoil from the 10% to 15% premium
he spent on green measures, Richards said. Corporate still gave him
the same percentage it would have for a traditional renovation,
even though it wound up being more money.
"I think the key thing is to understand it's one thing to invest
more up front and it's another thing to understand the whole
life-cycle benefits," said Langert. "Some of these things cost
extra up front and there are efficiencies to be gained longer
term." Richards said his restaurant uses 24% less energy than a
comparable traditional McDonalds, including 85% less energy spent
on lighting.
"Green design is important not only for environmental
responsibility, but there is a business rationale here," Langert
said. "By doing better, we're being way more efficient [and] we can
save money."
Joey Terrell, a franchisee for Denny's, said in an interview
that he recently opened his second store in Joliet, Ill., which was
built according to LEED gold standards and included extra
insulation, a white roof to reduce the need for cooling the
building, LED lights and an energy-efficient water heater. Compared
to his first restaurant in Mokena, Ill., which wasn't built to
green standards, Terrell said he has already saved a significant
amount of energy in the new store.
Also, he built the green store for less than Denny's corporate
told him it would cost to build a new traditional store. Terrell
said he accomplished this feat by closely managing the construction
process and making smart choices. For example, he said that he
saved $25,000 on his city water and sewer hook-up fees because he
told the city he would be using 35% less water, and he paid $7,000
for an efficient water heater, compared with $18,000 for a
traditional model.
Terrell said Denny's corporate architects offered him help when
he called for advice.
Pete LaBarre, a Denny's franchisee in Colorado, said in an
interview that all five of his locations are built according to
green standards.
"You want to try to be as environmentally friendly as possible
and it's really the little things that you can do from an operating
standpoint that save us big dollars and have a positive impact on
our clientele," LaBarre said.
(Dow Jones Clean Technology Insight covers news about public and
private clean-technology and alternative-energy companies.)
-By Sari Krieger, Dow Jones Clean Technology Insight;
212-416-2016; sari.krieger@dowjones.com