McDonald's Says Its AI Pricing Tool Is Optional. Franchisees Say Optional Feels a Lot Like Mandatory.

McDonald's has spent years teaching an algorithm to guess what you will pay for a Big Mac, and franchisees say the guess is starting to feel like an order. The system, refined since at least 2019 as part of the company's NEXT modernization push, analyzes millions of daily transactions, local demand, historical sales, competitor pricing from Wendy's and Burger King, and estimated willingness to pay, then recommends a price for each item at each location.

The spread can be dramatic: Reuters documented a Big Mac priced at $5.69 at one company-run restaurant in Fresno, California, and $6.89 at another about two miles away. Five franchisees told the outlet they have felt pressure to adopt the recommendations, and internal documents show McDonald's tracks who deviates from them. A January memo required franchise owners to engage "constructively with McDonald's approved Pricing Consultant and Tools," and CEO Chris Kempczinski has indicated that ignoring the pricing portal could factor into business reviews.

McDonald's calls the portal "a tool, not a mandate" and dismissed the Reuters reporting as "speculative and uninformed," noting that more than 95% of U.S. restaurants are franchise-operated and pricing decisions legally remain with owners. The FTC has been examining algorithmic and personalized pricing since August, which means McDonald's optional tool is arriving right as regulators start asking whether optional software can still function as price-fixing by another name.

Source: IBTimes UK

Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →