According to the Golden Arches Theory of Conflict Prevention, first put forward by the New York Times columnist Thomas Friedman in the mid-1990s, no two countries possessing at least one branch of McDonald's have ever gone to war with each other. So the prospects for global peace must have diminished alarmingly this month when the Illinois-based fast-food chain and de facto world government announced it was pulling out entirely from three unnamed countries in the Middle East and Latin America.

For McDonald's - if not for the corporation's multifarious opponents - the news was much worse: it is closing a total of 175 outlets in 10 countries, too, and reducing its staff by 600. Among those restaurants to go may be the cavernous Oxford Street branch and five other London sites - including, possibly, the one on Hampstead high street that the company battled so fiercely to open in the face of opposition from offended locals. There are, of course, about 30,000 McDonald's worldwide, so 175 is a mere drop of grease in the deep-fat fryer. But for years now, one of life's certainties has been the opening of hundreds more outlets annually, often well over 1,000 a year, with the number reaching a record 2,000 in 1996. In 2002, only 600 new restaurants will open.

Not that you would have noticed much amiss with McDonald's self-assumed role as the alternative UN the day before yesterday. Wednesday was World Children's Day, a "history-making fundraising initiative" uniting people in more than 100 countries, in a global drive to help disadvantaged children. Oh, and to eat lots of Big Macs - because although the event was supported by Kofi Annan, and organised in partnership with Unicef, World Children's Day is actually a trademark of the McDonald's Corporation.

The chief beneficiary was Ronald McDonald House Charities, the burger giant's main philanthropic arm. And much of the money came from $1 donations that the company made for every Big Mac and Egg McMuffin sold in the US, supplemented, in part, by that easiest of corporate generosity gestures: donations from employees. "We're not asking you to give money," the singer Celine Dion told viewers bluntly in an interview on Wednesday morning. "We're asking you to eat at McDonald's."

In truth, though, things have arguably never been so bad for McDonald's. You might have noticed something amiss if you had recently driven through the midwestern American town of Evansville, Indiana, where the golden arches now tower over an establishment called McDonald's With the Diner Inside. As well as a counter serving the usual burgers and fries, the outlet includes a full-service diner, where customers attended by waitresses can choose from more than 100 menu items, while imagining Ray Kroc, the founder of McDonald's as a national concern and an advocate of ironclad standardisation from store to store, spinning in his grave.

Or maybe you would have been annoyed to be standing in a queue three years ago while McDonald's trailed its "Made for You" service, offering personalised burgers in another assault on Kroc's philosophy. You would certainly have noticed something was wrong in Riyadh, Saudi Arabia, on Wednesday night, when a man walked into a McDonald's near a US Air Force base and torched it. Or in Jouineh, in Lebanon, two months ago, when another branch was the target of a violent attack.

Flailing to capture changing public tastes in its homeland, retrenching abroad, and, furthermore, damaged in Europe and Asia by the legacy of BSE, the corporation announced a profit shortfall warning this month, and earnings have declined for seven of the past eight quarters. "These actions are the right things to do for McDonald's shareholders, the brand and our business," chief executive Jack Greenberg said, explaining the restaurant closures. It was hard to imagine that the boss of the chain that "Loves To See You Smile" was smiling as he said it.

"I see this as another case of imperial over-reach," says Eric Schlosser, author of the surprise bestseller Fast Food Nation, a stomach-churning and meticulously researched investigation of the industry's farming, food preparation and employment practices. "They got too big too fast and, like the British empire, their huge increase in size abroad really cloaked fundamental weaknesses. If you put a little flag on a map for every branch of McDonald's in the world, it looks so impressive. But expansion is much more expensive in Kuala Lumpur than in San Diego. You're not just opening a restaurant. You're creating a whole infrastructure, a whole supply system."

Desperate to keep impressing shareholders with upbeat, expansionist news, Schlosser argues, the chain has mushroomed frenetically abroad while sales in its existing restaurants - the key test of any food outlet's real strength - seem to be reaching a plateau. In 2000, for the first time ever, the US fast-food industry gained, in net terms, no new customers at all. "They're at the ruthless whim of quarterly profits statements for Wall Street," says Schlosser. "It's change or die."

In the days of the "McLibel" trial - the two-and-a-half-year-long legal action brought by McDonald's against two London activists that ended, in 1997, in a humiliatingly hollow victory for the corporation - executives often seemed genuinely baffled that anyone seriously thought they could challenge the company's overarching dominance of the market. But Schlosser's revelation that McDonald's was using beef tallow to make French fries in some parts of the world precipitated another major legal battle, when Hitesh Shah, a west coast computer programmer whose Jainist religion forbade beef, found himself leading hundreds of Hindu McDonald's customers in a class-action lawsuit alleging that the firm had deceived them, imperilling their peace of mind and even their souls.

Earlier this year, McDonald's finally agreed to pay $10m to "Hindu, vegetarian and other groups whose charitable and educational activities are closely linked to the concerns of these consumers." This week, eight New York children have begun new proceedings in New York alleging that McDonald's fast food made them obese - the first such case to make it to court. More are on the way.

"Future historians, I hope," writes Schlosser in a new afterword to the paperback edition of his book, "will consider the American fast-food industry a relic of the 20th century - a set of attitudes, systems and beliefs that emerged from postwar southern California, that embodied its limitless faith in technology, that quickly spread across the globe, flourished briefly, and then receded, once its true costs became clear and its thinking became obsolete."

More serious than the lawsuits, more enduring than the BSE crises, and perhaps even more threatening than the rising tide of anti-American and anti-globalisation feeling around the world, there is a deeper - and enormously ironic - problem with McDonald's. Because the all-American fast-food chain, the symbol of US-driven trade liberalisation and peace through commerce is, in certain key ways, a bizarrely un-American phenomenon.

In a culture that champions entrepreneurialism, the corporation is now a vast, unwieldy bureaucracy; in a culture that thrives on innovation, it has been selling the fast-food treat of the American working-classes of the Eisenhower era for decades since Eisenhower. And in an economy where unlimited choice - or at least the appearance of choice - is the main selling point of every food store, deli or coffee shop, McDonald's has, from the beginning, adhered to the alternative philosophy of You'll Eat What You're Given.

"People are bored with the food, and a little afraid of it now, too, and there are just lots of competing ways of having a quick meal," says Barbara Haber, a historian of American food who is curator of books at the Radcliffe Institute for Advanced Study in Cambridge, Massachusetts. "The rigid consistency - knowing that wherever you were, you could expect the same meal - used to be a plus. But now there's a new kind of chain, emphasising bread and baked goods."

Jennifer Parker Talwar, a sociologist at Penn State University in Philadelphia who spent four years with workers at branches of McDonald's around the world, remembers being in Mexico City in 1984, "and it was a big deal to go there then - a real status symbol for the elite. It was the same thing in Delhi." But the sheen is fading away from the US, too. "Not any more," Talwar says. Now, she is studying the effects of the chain in India, where an indomitably vigorous local food culture has broken even McDonald's fabled uniformity: menu highlights in Mumbai, for example, include the vegetarian McAloo Tikki Burger.

Back at home, meanwhile, McDonald's attempts to refresh and adjust its menus - with healthier cooking oils, new product offerings, and experiments such as McDonald's With The Diner Inside - may be missing the point. That point is nostalgia, says Daphne Derven, curator of food at the American Centre for Wine, Food and the Arts in Napa, California. "People aren't going there for a nutritional interlude. They're going there for a very specific food memory. Food like that is comforting because it offers escape to another time or another memory." And nostalgia, she stresses, "varies with the generations." For how much longer will Americans, let alone non-Americans, continue to find comfort in the fare of the Eisenhower era?

Nowhere, perhaps, is McDonald's confused response to that problem more evident than at its worldwide flagship, its enormous new restaurant on 42nd Street near Times Square in New York. The interior is a cacophony of styles - the exposed brick of an upscale coffee house, banks of plasma screens showing extracts from children's movies, and long industrial corridors of grey-painted metal held together with rivets. Supersize Big Mac meals jostle for attention with strawberry and banana fruit juices and muffins arranged as if in a local bakery, though the sweet smell of frying oil still dominates. Handwritten signs advertising deals on mini-donuts turn out - only on very close inspection - not to be handwritten at all. "Where Every Day Is New Year's Eve," reads the enigmatic slogan on the servers' baseball caps.

Down one long corridor, lone diners sit on a long row of stools, each with an individualised screen, mere inches away, feeding a slow diet of "McTrivia" questions into their faces. (When did the first McDonald's open in Germany? How many sesame seeds on the average bun?)

"I'm sick of that, and I'm sick of that," one middle-aged woman in line says, pointing as she counts off the menu items to her companion. "I'm sick of that. I'm sick of that," she goes on, in words to make any McDonald's focus-group organiser pack up and go home.

"I'm sick of everything!" she says finally, and not unhappily, as if a fundamental truth has been revealed. Then the man in front of her picks up his bag of food, and she moves to the front of the queue and places her order.  
 
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