McDonald’s is reportedly using AI to “dynamically” price its burgers
McDonald's has implemented artificial intelligence technology to dynamically price menu items across its US restaurants and some international markets, with prices varying by location based on algorithms that estimate "customer willingness to pay." The system has drawn scrutiny over whether franchisees genuinely have pricing freedom, as internal documents reveal McDonald's tracks compliance with AI recommendations and corporate communications indicate pressure on store owners to follow the pricing suggestions or face potential consequences during contract renewals.
The AI pricing variations can be substantial: a Big Mac cost £4.45 at one Fresno, California location but £5.38 at another branch just three kilometres away—a 21 per cent difference. McDonald's corporate requires franchisees to "constructively engage" with approved pricing consultants and sends pricing guidance at least three times annually, whilst the company's terms of service acknowledge potential antitrust concerns and recommend franchisees seek independent legal counsel. A Connecticut franchisee received a suggestion to charge £13.95 for a single Big Mac, which sparked public backlash and legal action. Former store owner Karen King stated franchisees effectively have no choice in the matter, and McDonald's CEO has indicated that pricing non-compliance factors into licensing decisions.
- McDonald's uses AI to charge different prices for identical menu items at different locations
- Franchisees report pressure to comply despite claims pricing remains optional
- Big Mac prices vary 21% between stores just miles apart in the same city