McDonald's runs a machine-learning system that studies millions of transactions across its nearly 14,000 US restaurants and produces what it calls the "optimal price" for every menu item, at every single location. The tool factors in how price-sensitive a store's customers are, and even pulls in prices from Wendy's and Burger King nearby. That is why a Big Mac in one Fresno, California restaurant recently cost 5.69 dollars, while another restaurant two miles away, run by the same company, charged 6.89 dollars for the exact same sandwich.
McDonald's insists franchisees can set their own prices and that the tool is just a recommendation. But several current and former franchisees describe a different reality: corporate tracks who deviates from the suggested price, calls them about it, and since January has required owners to stay "constructively engaging" with the pricing tool as part of the standards used to decide whether their contracts get renewed. Since McDonald's controls whether an owner can renew a license or open a new store, "recommendation" carries more weight than the word suggests.
This has happened before, and it went badly. The same kind of pricing tool once suggested a Connecticut franchisee charge 18 dollars for a single Big Mac, which became a public embarrassment and turned into an ongoing lawsuit. The pattern repeats because the system is built to find the highest price people will tolerate, and McDonald's takes a cut of every store's total sales, so a higher menu price means more money for headquarters no matter what it does to the franchisee's standing with customers.
There's a legal shadow hanging over all of this. A former federal antitrust regulator pointed out that the pricing tool's own terms of service warn franchisees they "may be competitors of each other" and need to follow antitrust law, which is corporate's way of covering itself while still pushing everyone toward the same algorithm. That warning echoes a real case: a rent-pricing company called RealPage was sued by the Department of Justice and eight states for using an algorithm to help apartment landlords raise rents in a coordinated way, even though each landlord technically kept the final say. Whether McDonald's setup crosses that same line is now a live question, not a hypothetical one.
The wider industry has already tested this water and mostly retreated. Wendy's floated the idea of "dynamic pricing" in 2024, got hit with public backlash, and walked it back within days, insisting it would never charge based on personal customer data. Instacart tried showing different grocery prices to different shoppers and dropped the practice after an outcry. Walmart's move toward digital price tags drew the same suspicion, forcing its CEO to publicly promise not to raise prices based on who is buying or when.
McDonald's seems to be betting that fast food customers won't notice or care the way grocery and retail shoppers did, since these price gaps show up quietly between locations rather than changing minute to minute like a rideshare app. That bet is unfolding while McDonald's stock has dropped 30 percent since February, and the company's own CEO admits low-income customers are disappearing fast. Squeezing more revenue from each remaining customer is a short-term fix for a problem that is really about affordability, not algorithms.
For any business running multiple locations, this is worth watching. Dynamic pricing based on local demand is not new or scandalous by itself. What makes it risky here is combining it with pressure to comply, plus language that has franchisees seeking legal advice just to use a tool their own parent company built for them.