McDonald's Reportedly Uses AI to Set Dynamic Menu Prices

The report says pricing can vary sharply by location. Reuters reviewed information showing that stores in the same city may charge different amounts for identical items. A Big Mac at a Fresno, California, restaurant cost $5.69, while the same burger cost $6.89 at another branch two miles away, a 21 percent difference. Franchisees access the technology through an interface that includes messages such as "your restaurant is showing MEDIUM SENSITIVITY to price," based on "customer willingness to pay in your area."

McDonald's told Reuters that franchisees are free to set their own prices. But several store owners said the company pushes them to use the new AI tools. A corporate document reviewed by Reuters shows McDonald's tracks adherence to the platform and notes deviations from the algorithm's price recommendations. An internal communication sent to franchisees also says the company now requires them to be "constructively engaging with McDonald's approved Pricing Consultant and Tools" as part of new business standards. Company documents reportedly show McDonald's sends AI pricing guidance to franchisees at least three times a year.

Some store owners described receiving phone calls from corporate after they departed from those recommendations. "You don't really have much of a choice anymore," Karen King, a former store owner, told Reuters. McDonald's corporate has significant leverage over franchisees because it decides whether they can renew their licenses or open new locations. CEO Chris Kempczinski recently told investors that "pricing non-compliance in certain cases is part of those conversations" about contract renewals, according to the report.

The company acknowledges that using dynamic pricing could create legal risks for franchisees, while it continues to promote the platform. The pricing portal's terms of service reportedly warn that owners "may be competitors of each other" and say "it is particularly important for all Users of the Tool to understand and comply fully with antitrust and competition laws." The document also states that franchisees are "always free to determine the final price," language that could help distance corporate from antitrust concerns, and it suggests that store owners seek independent legal counsel. William Kovacic, a former FCC commissioner, told Reuters the language is "an acknowledgment there's a potential problem" given recent scrutiny of pricing algorithms.

McDonald's rejected Reuters' reporting as "speculative and uninformed." The company said the pricing portal is "a tool, not a mandate, designed to provide restaurant-specific recommendations to help franchisees deliver value for customers and make informed business decisions."

Reuters says McDonald's has used some version of the technology since at least 2019. In 2023, Kempczinski told investors that the company had developed proprietary tools to evaluate pricing at individual restaurants. The tools have already caused problems. One Connecticut franchisee was reportedly advised to charge $18 for a single Big Mac, a recommendation that went viral and led to a lawsuit in which the store owner alleged the brand tried to push him out of the franchise system for discriminatory reasons. That case is still ongoing. Other franchisees have alleged that some version of the tools recommended large price increases during the pandemic and afterward, as inflation continued to rise. McDonald's earns much of its money by taking a percentage of each store's total revenue, giving it an incentive for franchisees to charge as much as possible.

Public backlash to similar pricing practices has been swift elsewhere. In 2024, Wendy's drew criticism after its CEO announced plans for "dynamic pricing"; the company later said the comments were misconstrued and now insists it does not use customer data for pricing.