FINANCE
WITH ITS NEW VALUE STANDARD, MCDONALD’S MAKES ANOTHER BIG CHANGE TO ITS FRANCHISE RELATIONSHIP The Bottom Line: The fast-food giant wants to ensure that its prices represent a good value. But in doing so, it is toying with a key tenet of being a franchisee: The ability to set prices.
M cDonald’s early this year will start grading franchisees based on the value they provide at their restaurants, yet that push could infringe on operators’ right to set their own prices and may diminish their profitabil - ity. That, at least, is the view of some opera- tors that worry that McDonald’s new value standard will ultimately damage the value of their restaurants. “One of the long-time shared principles in the partnership between the franchisee and franchisor has been the agreement that [owner/operators] maintain the ability to de- termine and set their own pricing, outside of national promotions, based on the dynamics of the local market,” the National Owners Association, an independent group of McDon- ald’s owners, wrote in a message to members, seen by Restaurant Business. “It is imperative that [owner/operators’] price independence continues.” McDonald’s announced a new value pro- vision to its global franchising standards in December. The goal is to ensure that its stores provide a good value based on local market conditions. Starting in January, McDonald’s will as- sess the outcomes of franchisees’ pricing de- cision in relation to providing value to cus- tomers. McDonald’s will assess operators’ use of pricing tools the company has available, their work with pricing consultants, support for system promotions and business perfor- mance. The company also said it would con-
sider local circumstances that affect individ- ual restaurants. In the process, the company stressed that franchisees would continue to set their own prices. McDonald’s reiterated that in a state- ment to Restaurant Business on Monday, while noting the need to ensure the chain’s value proposition. “Showing up for customers with great val- ue is just as important today as when we first opened our doors 70 years ago, and our fran- chisees understand that,” the company said in a statement to Restaurant Business. “As the new standards take effect next month, the tools and resources provided to franchisees will help them make informed decisions that enhance the overall customer experience while continuing to grow their businesses.” Yet McDonald’s value standards repre- sent the latest in an ongoing evolution of the franchise relationship under CEO Chris Kempczinski. Over the past several years the company has pushed aggressive remodels, changed its field operations team, toughened ownership standards and made it harder for relatives of franchisees to take over stores. All of that was done to speed decision-mak- ing, ensure consistent operating standards and give the company more control over the system. Its latest effort gets into a crucial part of being a franchisee: The ability to set prices based on local market conditions. Labor costs vary from city to city and state to state. Rent costs also vary. McDonald’s controls the real estate and charges franchisees rent based on
JONATHAN MAZE
JONATHAN.MAZE@INFORMA.COM
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RESTAURANT BUSINESS JANUARY 2026
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