McDonald's (MCD) latest concept is "CosMc's" — a spin-off restaurant based on a quirky alien mascot that debuted in the 1980s with an obsession for McDonald's food. Opening first in Bolingbrook, Illinois, CosMc's will be trialed across 10 locations over one year.

Yahoo Finance's Brooke DiPalma breaks down the details and how McDonald's is experimenting with the layout and design of CosMc's.

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Video Transcript

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BRAD SMITH: All right, time to get cosmic. No, not more talk on SpaceX this time. We'll save that for Rachelle Akuffo in the next hour. We are talking about CosMc. McDonald's new spin-off brand launching in Bolingbrook, Illinois this week. CosMc was originally a McDonald's mascot from the 1980s, and he took the form of an alien from outer space who loves McDonald's food.

CosMc, not as well known as some other mascots, like this guy, Grimace. But maybe he's set for a comeback if things go well with this venture. Yahoo Finance's Brooke DiPalma joins us now. OK, so if Grimace, as the CMO of McDonald's has told us, represents happiness and joy, what does CosMc represent here, Brooke?

BROOKE DIPALMA: CosMc is this out of this world experience that McDonald's is really hoping to win fans over with. Now they did tease it back in July. This small restaurant concept that has the DNA of McDonald's but its own unique personality, that personality we now know cosmic, that outer space alien character.

Now they're intending to solve the 3:00 PM slump here they said with customizable drinks. You have those sweet and savory treats. They're testing out different options or different layouts. As you can see here, they have multiple drive-thru lanes. It'll give customers the opportunity to pay with their credit card at the order speaker, and then they'll be able to choose, or rather McDonald's-- CosMc employees will tell them which pickup lane to go to in order to increase speed and efficiency. So if your order is a bit more complex, perhaps you'll go to another window.

Now this is just one location launching this week near their headquarters in Illinois, but nine others are set to launch in the first half of 2024 in Texas. And this is all just a pilot. McDonald's will assess it for a year and see where it goes.

- So speaking of this being a pilot, is this an attempt to say take on a Starbucks or something like that?

BROOKE DIPALMA: Yeah, that is the question. I think the many analysts, many investors are certainly wondering that. But McDonald's CEO did say that don't get too excited here, it's just 10 stores. He said this is more so about the potential that McDonald's has to build another concept. But you can't help but think of Starbucks really looking to get customers in the door during that 2:00 to 3:00, you know, the afternoon hour.

Of course, you also have Dutch Bros. You have Wendy's that serves coffee all day. You also have Restaurant Brands International brands like a Tim Hortons. You have a Dunkin'. So really looking to test this new concept and perhaps go up against the big guys who know the space very well.