McDonald’s is reportedly using an artificial-intelligence pricing system to study millions of transactions across thousands of restaurants and recommend what it considers the best price for each menu item at each location.
The approach could mean customers pay noticeably different amounts for the same burger, even when restaurants are only a few kilometres apart. It also raises broader questions about algorithmic pricing, franchise control and competition law.
Different prices for nearby Big Macs
Reuters reported on September 29 that it had spoken with several franchise owners and reviewed screenshots from the pricing system.
The screenshots reportedly classified some restaurants as having “MEDIUM SENSITIVITY to Price”, based on “customer willingness to pay in your area”. A check of two company-owned restaurants in California, located roughly two miles apart, found a Big Mac priced at $5.69 in one store and $6.89 in the other.
Franchise owners under pressure
McDonald’s has used algorithm-supported pricing in some form since 2019. The company told the outlet that franchisees remain free to set their own prices, while describing the report as inaccurate and uninformed. However, the company appears to have increased its efforts to encourage restaurants to adopt the newer AI tools.
Five franchise owners reportedly said they felt pressure to use the system. McDonald’s headquarters is also said to monitor restaurants that move away from recommended prices, creating occasional friction between corporate management and franchisees.
That disagreement is not limited to price increases. Some owners are resisting reported requests to reduce prices on items that cost less to produce, with the aim of attracting more customers to their restaurants.
Legal concerns around coordinated pricing
New rules introduced in January reportedly required franchise owners to “constructively engage with McDonald’s approved Pricing Consultant and Tools”. At the same time, the company is aware that automated pricing can create legal and reputational risks.
Nearby McDonald’s restaurants may be treated as competitors. If owners change prices as part of a coordinated arrangement with surrounding stores, they could face legal problems. The pricing software reportedly warns owners that nearby restaurants “may be competitors” and recommends consulting their own lawyers about possible concerns.
Why algorithmic pricing matters beyond fast food
The dispute illustrates how data-driven recommendations can affect independent operators while leaving customers with less obvious pricing consistency. For businesses with franchisees, venues or separately managed locations, a centralised tool can create tension between corporate strategy and local decision-making.
For more coverage of technology, operators and changing business models, explore the RETROCADE Arcade Blog. Readers considering the economics of owning a cabinet can also consult the Arcade Machine Buying Guide or browse available arcade machines.
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