"It doesn't make financial sense to input a lot of money into something that isn't generating a lot of return."
Technology required for the cash registers cost about $600,000 annually per store.
"The other sites are performing well."
Most customers wanted a "total" McDonald's experience with McCafe, drive through and Playland, and the Tutanekai St site didn't provide any of those options, Mr Parry said.
"The full experience is what the customers want ... McCafe is huge," he said.
Staff had been told about the closure.
"We have spoken to them. It was a decision that was very tough to make," Mr Parry said.
With the other three sites, Fenton St, Te Ngae and Fairy Springs Rd, all operating well, it was hoped many of the staff from the central city restaurant would be employed at one of them, Mr Parry said.
"We don't want to reduce any existing staff back at the moment ...
"We should be able to accommodate the vast majority of staff at one of these sites," he said.
Management were looking to close the restaurant later this year, by the time the lease on the building was due to expire.
Rotorua Chamber of Commerce chief executive Roger Gordon said he was pleased to hear most of the staff would be offered jobs at other McDonald's sites around the city but he had major concerns about the high number of empty shops and businesses.
"We really do need to see the development of the CBD," Mr Gordon said.
It was good to see Crest developing an apartment complex in Hinemoa St but Mr Gordon said as one business opened its doors in the city, another seemed to be closing.
"It's unfortunate that as one positive things happens it is negated," he said.
The chamber had made submissions to the Rotorua District Council district plan to encourage more businesses into the CBD.
