McDonald's pushes AI pricing tool that suggests Big Mac prices based on 'customer willingness to pay'

McDonald's has leaned into value meals and tried to lower prices where possible to draw back low-income and inflation-battered customers, because the company makes most of its money by taking a chunk of franchisees' total revenue, so their profit margins matter less to corporate. Franchisees, however, face rising costs and have been reluctant to slash prices or add deals, with some ignoring the company's repeated suggestions. During the company's August earnings call, CEO Chris Kempczinski called out the roughly one-third of franchisees who did not implement the Under $3 Menu, saying their 'business results (were) a lot softer.'

The tension has legal dimensions. In January, McDonald's updated its business standards to require franchisees to be 'constructively engaging with McDonald's approved Pricing Consultant and Tools.' A franchisee document showed the company had started tracking in detail how much restaurants deviated from suggested prices. George Michell, a Connecticut franchisee, sued McDonald's after his restaurant was flamed online for charging $18 for a Big Mac meal, alleging the AI tools suggested that price; McDonald's has disputed the claims and alleged Michell repeatedly violated his franchise agreements. The case is ongoing, though claims related to McDonald's breach of conduct have been dismissed.

How this plays out likely hinges on whether franchisees retain real discretion over pricing and whether regulators act on antitrust concerns. The pricing portal's legal terms warn that franchisees risk antitrust scrutiny since other franchisee owners using the same tool may be considered 'competitors.' McDonald's said it takes its responsibility to follow all laws seriously and is committed to complying with those laws. For franchisees, the question is whether the tools remain advisory or become a de facto mandate.