McDonald’s Uses AI to Recommend Menu Prices as Franchisees Allege Pressure

McDonald’s says its AI pricing advice leaves restaurant owners in charge. But five franchisees told Reuters they faced pressure to follow the recommendations, and the company tracks departures from that advice. The investigation puts a concrete question behind the chain’s use of machine learning: how optional is a recommendation when rejecting it attracts corporate scrutiny?

McDonald’s has pushed back on the investigation with a six-part clarification, described by Digital Trends. It says AI neither sets nor changes menu prices and does not determine what an individual customer pays. It also denies dynamic pricing—prices that change in real time or by the hour. Those denials distinguish the reported restaurant-level recommendations from prices tailored to individual diners.

A price recommendation for each restaurant

According to Reuters, the software analyzes millions of daily transactions across nearly 14,000 US restaurants. It generates what McDonald’s calls an “optimal price” for individual menu items at each location. The unit of the recommendation is a restaurant and its menu item, rather than a particular customer’s order.

The inputs include estimates of customers’ willingness to pay in an area and public prices from nearby competitors, including Wendy’s and Burger King. Screenshots reviewed by Reuters included a message identifying a restaurant as showing “MEDIUM SENSITIVITY to Price,” based partly on “customer willingness to pay in your area.” That wording describes an estimate of local demand, not an individual shopper’s spending limit.

Reuters reviewed screenshots of the pricing system and spoke with nine people familiar with McDonald’s pricing strategy. The accounts published by Digital Trends and The Times of India describe that same investigation, rather than separate examinations of the software.

a tool, not a mandate

McDonald’s, describing its pricing portal in its response to Reuters

Corporate reviews complicate the advice

The franchisees’ complaint concerns how the recommendations are enforced, not simply how they are calculated. Five owners told Reuters they experienced pressure to use the tools. Pricing guidance goes to owners at least three times a year, and McDonald’s tracks when they depart from the recommendations.

January business standards required franchisees to be “constructively engaging” with approved pricing consultants and tools, according to an internal communication cited by Reuters. In August, CEO Chris Kempczinski said “pricing non-compliance in certain cases is part of those conversations” during business reviews. Both details place pricing advice inside the company’s oversight of restaurant operators.

McDonald’s maintains that franchisees set their own prices and need not accept the recommendations. It says the advice reflects local costs, competition and demand, which can differ even between restaurants only a few miles apart.

Price gaps do not prove the software caused them

Three franchisees told Reuters the engine widened price gaps between nearby stores. A September check found a Big Mac listed at $5.69 at one company-owned restaurant in Fresno, California, and $6.89 at another two miles away. Reuters could not establish whether the pricing tool caused that difference.

A historical example shows how high a recommendation could reach. In 2023, the tools reportedly recommended that Connecticut franchisee George Michell charge about $18 for a Big Mac meal at a restaurant off a state turnpike. A filing from Michell said the price “caused no loss of sales.” That is his claim about one restaurant, not a measure of the system’s effect across McDonald’s.