McDonald's may sell chains

CHICAGO — McDonald's Corp. may be looking to sell its smaller fast-food chains.

The world's biggest fast-food restaurant operator is seeking buyers for its Boston Market, Chipotle Mexican Grill and Donatos Pizzeria restaurants, according to the news site thedeal.com and a report in Thursday's editions of the Chicago Tribune. They each cited unidentified sources familiar with the plans.

The reports said the Oak Brook-based company is talking to private equity firms about buying a controlling stake in its Partner Brands Division, which operates the three chains.

A McDonald's spokesman declined to comment on the possible sale.

In morning trading on the New York Stock Exchange, McDonald's shares rose 42 cents, or 3 percent, to $14.65.

Partner Brands helped McDonald's increase its revenue by about $1 billion in 2002, but the cost of running and expanding the smaller chains has been high.

According to the Tribune, McDonald's has lost more than $60 million in each of the past two years on the ventures.

Selling the chains would be further evidence that McDonald's chief executive James Cantalupo is addressing slumping sales with a back-to-basics approach.

Company spokesman Bill Whitman said Wednesday that McDonald's was implementing an "aggressive" plan to improve the chain's U.S. business.

He said the plan's focus was on customer service, restaurant "re-imaging," the menu and improving restaurant operations.

Cantalupo is scheduled to discuss his plans to revive the slumping company at an April 7 meeting with Wall Street analysts.