Separating Fact from Fiction: AI Does Not Set Prices at McDonald’s

FICTION: AI sets menu prices at McDonald's.

FACT: It does not.

McDonald's pricing recommendation tool provides restaurant-specific recommendations. It does not set or change prices. Franchisees decide what prices to charge and whether to use the recommendations available to them.

The bottom line: The tool provides information. People make the final pricing decisions.

FICTION: McDonald's uses technology to determine how much an individual customer is willing to pay.

FACT: We do not.

McDonald's pricing recommendation tool does not set prices based on an individual customer's willingness to pay and does not set prices for individual customers. The tool focuses on restaurant level market dynamics that change by geographic location and other conditions.

FICTION: McDonald's uses dynamic pricing.

FACT: We do not.

McDonald's pricing recommendation tool does not set prices based on an individual customer's willingness to pay and does not set prices for individual customers. It does not change prices in real-time or at different hours during the day.

FICTION: Using data and analytics to inform pricing is unusual or controversial.

FACT: It is a standard business practice.

Businesses have long considered factors such as local costs, customer demand, competition and economic conditions when making pricing decisions. Pricing recommendation tools and analytics have been used across industries for decades to help businesses make more informed decisions.

That matters at McDonald's because local conditions can vary significantly across our global network of over 46,000 restaurants. A restaurant at a major transportation hub can operate in a very different environment from one in a suburban neighborhood or small town. Even restaurants only a few miles apart can face different local market conditions.

FICTION: McDonald's dictates the prices franchisees must charge.

FACT: Franchisees independently set their menu prices.

McDonald's can provide franchisees with tools, resources, research and recommendations, and we encourage them to focus on delivering value for customers. But a recommendation is exactly that: a recommendation, not a mandate. Franchisees are not required to accept a pricing recommendation.

FICTION: McDonald's franchisee value standards are simply about policing prices.

FACT: Value is about much more than price.

McDonald's has a value standard for franchisees that is designed to reinforce accountability for delivering the experience and value customers expect from McDonald's. The assessments are holistic. Price is one consideration among many aspects of the customer experience that shape whether customers believe they received good value.

What hasn't changed

McDonald's has been helping franchisees build successful businesses for more than 70 years. We provide our franchisees with tools and insights that can help them make informed business decisions, while they independently determine their menu prices.

AI does not set McDonald's menu prices. People do.

And our shared focus remains straightforward: deliver great value for customers and operate successful restaurants.