McDonald's has another pricing-related headache

McDonald’s has another pricing problem. Or maybe it’s a semantics problem.

Earlier this week, Reuters published an extensively reported story on the fast-food chain's pricing, titled “Inside McDonald’s push to have AI price your Big Mac.”

The story provided deep details on how the company’s pricing engine works, how that engine leads to sometimes-significant pricing differences from store to store, and some tension with franchisees.

Reuters’ social media account said that McDonald's uses “artificial intelligence to help set menu prices across the U.S. and some global markets.”

Reaction on social media was unsurprising, with various accounts effectively saying that the fast-food giant has started using AI to set prices. Some noted one of the story’s biggest reveals, that it’s all based on how much the local restaurant’s customers are willing to pay.

> 🦔McDonald's is using AI to set menu prices at individual restaurants based on "customer willingness to pay" in each area, per Reuters. A Big Mac costs $5.69 at one Fresno store and $6.89 two miles down the road. Franchisees say corporate pressures them to follow the AI's… pic.twitter.com/0Dpis58jps— Hedgie (@HedgieMarkets) September 30, 2026

> JUST IN: McDonald’s begins using AI to calculate how much customers are willing to pay for Big Macs & other menu items at individual restaurants.— Polymarket (@Polymarket) September 29, 2026

McDonald’s did not like it. Jon Banner, McDonald’s global chief impact officer, went so far as to go on the social media site X to say that “Reuters got it wrong” and to make clear that McDonald’s does not automate pricing.

> For the record: AI does not set Big Mac prices, make automatic price changes, or determine what individual customers pay. @Reuters got it wrong. @McDonalds provides tools and recommendations, not automatic pricing. Franchisees set menu prices. We provide insights that help…— Jon Banner (@jon_banner1) September 30, 2026

In a statement, McDonald’s said that AI does not set the prices of its menu items. “These speculative an uninformed claims attempt to recast a standard business practice as something controversial. AI does not set the price of a Big Mac or any other menu item. The use of pricing recommendation tools and analytics is widespread across industries.”

The issue isn’t whether McDonald’s uses AI or machine learning to help with prices. It almost certainly does. But AI doesn’t set the prices. That may sound like semantics, but the difference is crucial for the company and its operators and for regulators.

Franchisees set prices for McDonald’s. The company recommends that operators use a pricing portal. But that is not strictly required. And those prices must be inputted by a human being. The company does not do dynamic pricing. Nor does it price for individual consumers.

Franchisees set the prices because costs can vary from one location to the next, even within markets. Labor costs more in, say, Seattle than it does in rural Alabama. Food costs are higher in Hawaii than they may in Illinois. And rent can vary from one store to the next, based on location or the age of the restaurant or the franchise agreement.

The result can lead to wide differences in prices from one location to the next. We wrote about this variation back in 2021.

In our own market, for instance, we have three McDonald’s locations within three miles of us, and all three price their Big Macs differently, a 40-cent gap.

But this is not remotely new. Franchisees have set prices for decades, which is a key component of their individual ownership.

That the recommendation tools the company provides its franchisees use machine learning and AI is neither new nor particularly surprising. Deloitte built McDonald’s pricing portal and has used AI and machine learning in its pricing products for years.

Everything uses AI these days. Pricing decisions can be complex and time-consuming and software-heavy, making it a natural for the technology tool. That technology has added more sophistication to the pricing recommendations that may well make the differences more noticeable.

What may be particularly frustrating, for franchisees, is the reaction to the pricing portal and the tension around pricing.

Consumers are worried that the AI will push prices higher. And they worry about the potential use of dynamic pricing at a fast-food chain, something Wendy's found out in 2024. That fear is natural and understandable, given the use of AI and dynamic pricing in other industries, such as airlines.

The pricing report will thus keep alive, if not intensify, a belief that McDonald’s and other fast-food chains are looking for more ways to gouge customers. Yet corporate pressure on franchisees is just the opposite.

McDonald’s in recent years has put more pressure on franchisees to keep prices down. As we reported last year, the company made value a bigger part of the franchising standards. So while operators aren’t required to use the pricing portal, they will be rated on whether their prices provide good value for their consumers.

In other words, whatever AI is of use in McDonald’s pricing recommendations, these days it would likely be designed to keep prices lower, not higher.