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Chicken McGriddle: McDonald's Corporation's Next Blockbuster?

By Rick Munarriz – Feb 24, 2016 at 12:35PM

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Mickey D's is testing a new breakfast sandwich where a McChicken patty is the meat in a McGriddle.

There's a new way to enjoy a poultry-fueled breakfast at a handful of McDonald's (MCD -1.56%) locations. The world's larger burger chain -- and the undisputed champ of drive-thru breakfasts -- is testing the Chicken McGriddle at 11 restaurants through central Ohio. 

It's the same McGriddle bun that the chain has been selling for years -- a pair of maple syrup-infused griddle cakes that don't get sticky in your hands -- but with a fried chicken patty instead of the usual egg, cheese, and either bacon or sausage protein inside. It's been touted as a "secret menu" item in the past, but now it's officially on the menu at a handful of Columbus-area eateries. The test will run through late March.

Foodies won't be flocking to grab one if the syrupy sweet breakfast sandwich goes national. McDonald's is using the cheap and iffy McChicken patty, and not the plump 100% chicken breast and buttermilk patty it uses on its premium lunch and dinner sandwich. It's how McDonald's can keep the new sandwich at just $2 or less. However, it is a logical -- and perhaps more importantly marketable -- evolutionary move for Mickey D's. 

This isn't the first time McDonald's is offering a poultry item for breakfast. Many markets offer the McChicken patty as a southern-style biscuit sandwich. However, it's surprising that a chain that relied on premium grilled and fried chicken sandwiches to go upscale a few years ago hasn't given chicken a bigger role on its morning menu.

Chick-fil-A is a chain that does a lot of morning traffic with a breakfast menu that leans heavily on its signature poultry. Bojangles' (BOJA) is another chicken chain that has been very successful in fueling morning commuters. When Bojangles' went public last year, its prospectus revealed that it serves up 38% of its revenue before 11a.m. If Bojangles' and Chick-fil-A are drawing so well in the morning, why wouldn't McDonald's want to cash in on the fun?

McDonald's is already on the comeback trail. It posted a 5.7% year-over-year gain in comps for its stateside restaurants during the holiday quarter, the chain's biggest gain in years. It was the first time that comps for the fourth quarter weren't negative since 2012. 

Investors had forgiven McDonald's long before its customers did. The stock held up well during the roughly two years of negative domestic comps, hitting a fresh all-time high earlier this month. This doesn't mean that it's back. McDonald's still seems to be championing the cause of simplification even as it adds new items to its menu. It wants to have its cake -- or in this case a griddle cake with a McChicken patty inside -- and eat it, too. This should be a hot product for the chain if and when it goes national, but it doesn't mean that every fowl play is worth fielding.

Rick Munarriz has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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