updated 11/13/2007 5:43:17 PM ET 2007-11-13T22:43:17

McDonald's Corp. laid the foundation to perk up its beverage and breakfast offerings Tuesday with plans to add upscale coffee drinks, chicken biscuit sandwiches and breakfast burritos to its U.S. restaurants in the coming weeks.

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The addition of espresso coffee drinks, which are being tested in more than 800 stores, will begin next year and will give McDonald's an important foothold into the lucrative $12 billion specialty beverage market.

The rollout will likely take last through 2009, officials announced Tuesday.

Following the success of its breakfast menu and drip-coffee, observers have expected the world's largest fast-food company to dive into the fast-growing coffee business as a way to attract new customers to the chain.

McDonald's also plans to add sweet tea, frappes, smoothies and bottled beverages to stores.

"We want to move from beverages as an accompaniment to a beverage destination," Don Thompson, president of McDonald's USA, said during a meeting with analysts at the company's suburban Chicago headquarters. "We believe the quality of the offerings will rival the best of class."

In two weeks, McDonald's will begin selling a sausage skillet burrito to breakfast customers. A southern-style chicken biscuit will be launched next year.

Also Tuesday, McDonald's named a new chief financial officer, while announcing plans to further scale back the number of company-owned stores in some parts of the world.

Peter J. Bensen, 45, will become CFO in January. Bensen, the company's senior vice president and corporate controller, replaces Matthew Paull, who announced his retirement this year.

During a meeting at the company's Oak Brook headquarters, McDonald's said it would refranchise between 1,000 and 1,500 stores to local owners during the next three years. About 70 percent of McDonald's 30,000 restaurants already are owned by franchisees.

"It makes us not just a global brand, but a locally relevant one," said Ralph Alvarez, McDonald's chief operating officer.

McDonald's has been working to pare the number of company-owned restaurants, but executives said Tuesday they have no plans to cede ownership of all stores to franchise owners.

Executives said many of sites slated for refranchising are in the U.S., U.K., France, Germany, Australia and Canada. They declined to say how much the sale of those restaurants could bring in.

McDonald's also plans about 1,000 annual new store openings in coming years. That includes 160 stores in the fast-growing markets of Russia and China next year.

"We're more optimistic than ever about these markets," Paull said.

Executives said they hope to return between $15 billion and $17 billion to investors between 2007 and 2009, through share repurchases and dividends. That projection is about double what the company returned during the past three years.

McDonald's shares rose 6 cents at $57.10 in trading Tuesday.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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