NORTH CANTON, Ohio Diebold Inc. has signed a deal with McDonalds Corp. to install and operate automated teller machines in certain McDonalds restaurants.
Thirty corporate-owned restaurants in Pennsylvania and West Virginia have signed up for the program, which requires that each franchise pay an $84 maintenance fee to Diebold. About 85% of the 12,000 McDonalds restaurants in the United States are independently owned, and these can enroll in the program through the company.
McDonalds must approve a franchise for installation, making sure it meets certain requirements for telephone service, physical space, and so on. After that, Diebold said it can install the machine within two to three weeks. Each restaurant must sign a five-year contract with an automatic 12-month renewal.
Diebold spokesman John Kristoff said the terms of the deal are consistent with Diebolds aim to offer continuing service to customers, instead of simply selling them hardware. For us to be profitable in the long term, we had to devise a program that provides revenue continuously, he said.
Diebold has designated its CashSource Plus 200P cash dispensers for McDonalds. Workers can load money directly into a bill acceptor without interfering with the chest of the ATM, meaning that the restaurant can restock the ATM with minimal risk of theft.
The guy flipping burgers can actually feed the ATM without actually having access to the cash inside, said Mr. Kristoff. It cuts down on the costs of an armored car service.
Under the agreement, Diebold will waive the monthly service fee if the volume of activity on an ATM exceeds 149 transactions a month. Diebold will also hand over a larger cut of the $1.50 surcharge to the restaurant, depending on volume. If the ATM handles 150 to 349 transactions a month, the restaurant keeps 40% of the surcharge. From 350 and 749 transactions, McDonalds keeps 70% of the fees. Exceeding 749, it is to retain 95%.
Diebold has also agreed to contribute 10 cents of its share of each transaction surcharge to Ronald McDonald House, a charity organization for children.
Mr. Kristoff said Diebold expects at least 100 restaurants to sign on by yearend.
He said that, to date, there is no plan to extend the offer to McDonalds restaurants outside the United States. As surcharging becomes more prevalent outside the U.S., he said, there might be more opportunities. But besides a handful of countries like the U.K. and Australia, surcharges are not really in place, and there has to be surcharges for this business model to work.