‘Optimal Price’: McDonald’s Pushes Franchisees Toward A.I. Pricing

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What a Big Mac costs at McDonald’s is increasingly decided by a machine, based on how much customers in the area are willing to pay. According to an investigation by Reuters, the fast-food chain relies on a machine-learning pricing system that analyzes data from millions of daily transactions at nearly 14,000 restaurants and calculates “the optimal price” for every item at every location. It also factors in menu prices at rivals Wendy’s and Burger King.

Two Restaurants, Two Prices

An example from Fresno, Calif., shows how large the differences can be: a Big Mac costs $5.69 (about 4.86 euros) at one restaurant and $6.89 (about 5.89 euros) at another about two miles away, a 21 percent markup. The franchisee portal includes labels such as “MEDIUM SENSITIVITY to Price,” based on “customer willingness to pay in your area,” according to Engadget.

McDonald’s has used an A.I. pricing tool since at least 2019, in the United States and “some global markets,” according to Reuters. What is new is the pressure: since January, franchisees have been required to engage “constructively” with the company’s pricing consultant and tools. Five operators said they had been pushed to use them and that the system had widened existing price gaps. McDonald’s disputes this, calling the portal “a tool, not a mandate,” and saying franchisees “are always free to determine the final price.” The company called the Reuters account “speculative and uninformed.”

One important point: prices vary by location, not by person. The reports contain no indication that McDonald’s shows individual customers personalized prices, for example through its app.

From Wendy’s to Delta: More Examples

McDonald’s is not alone. Dynamic and algorithmic pricing is spreading across many industries, and almost every time, a backlash follows:

• Wendy’s: The rival announced more flexible pricing on digital menu boards in 2024. After fierce criticism, the chain backtracked: “To clarify, Wendy’s will not implement surge pricing,” the company said, according to Axios.
• Delta Air Lines: The airline uses A.I. from the Israeli start-up Fetcherr for part of its domestic fares. Three U.S. senators warned in a letter that this could push fares up to “each individual consumer’s personal ‘pain point.’” Delta denies using individualized prices based on personal data.
• Instacart: A study by Groundwork Collaborative and Consumer Reports found that for nearly three-quarters of the products tested, different customers saw different prices, with gaps of up to 23 percent. That could cost a family about $1,200 (about 1,030 euros) a year. After the Federal Trade Commission began investigating, Instacart ended all price tests.
• Uber and Lyft: For identical trips, Consumer Reports found a median gap of 50 percent between the lowest and highest fares, according to Quartz. Both companies point to real-time supply and demand.
• JetBlue: A class action accuses the airline of feeding browser tracking data into dynamic fares. It was triggered by a viral post about a $230 fare jump, after which JetBlue advised clearing cookies.

First Bans in the United States

Policymakers are responding. In early 2025, an FTC study found that retailers use personal data, down to mouse movements on a web page, to tailor prices. The agency recently proposed a policy statement under which undisclosed personalized prices can violate the law. “When consumers see a listed price, they expect it to be same price that everyone else sees, not the retailer’s estimate of how much they are willing to pay based on their personal data,” said Andrew Ferguson, the F.T.C. chairman.

In New York, retailers have had to disclose since November 2025 when a price was “set by an algorithm using your personal data.” Maryland bans personalized prices at large grocery stores and delivery services starting in October, and Connecticut and New Jersey will follow in 2027, according to an overview by the law firm Greenberg Traurig. Just last week, Seattle became the first U.S. city to ban A.I. pricing based on personal data in grocery stores.

In the European Union, personalized prices are allowed but must be disclosed online. That could change with the Digital Fairness Act, which the European Commission is expected to propose this year. The European consumer organization BEUC is calling in a position paper to “prevent pricing based on tracking and/or profiling, except for price reductions.”

The Other View: Not Every Price Change Is a Rip-Off

Supporters consider some of the alarm overblown. A study by the University of California, San Diego, the University of Texas at Austin and Northwestern University analyzed 180 million price observations at 114 supermarkets and found no evidence that electronic shelf labels lead to surge pricing. “If digital labels were causing surge pricing, you’d expect a visible spike in price changes… Instead, we saw no meaningful difference before and after installation,” said Robert Sanders, one of the authors. Automatic markdowns on perishable goods could even reduce food waste.

Aradhna Krishna, a marketing professor at the University of Michigan, even sees personalized pricing as a form of redistribution. It means that “wealthy customers pay more for identical goods, while lower-income customers pay less,” she wrote in an essay.