McDonald’s has introduced an artificial intelligence system to estimate how much customers at each of its restaurants are willing to pay, and it provides franchisees with recommended prices for menu items. This has resulted in varying prices for the same products at nearby locations, such as a Big Mac costing $5.69 in one Fresno, California, restaurant and $6.89 in another just 3 kilometers away. Reuters investigated this pricing strategy and found a 21 percent difference in prices, though it could not confirm whether the AI was solely responsible for the variation. McDonald’s has used this tool since at least 2019 in the United States and some international markets. The company claims franchisees are free to set prices, but some report pressure to follow the AI’s recommendations. The AI system analyzes millions of daily transactions across McDonald’s approximately 14,000 U.S. locations. It considers factors such as sales data, local prices, and prices of competing chains to calculate an "optimal price" for each product based on the location's customer base and local market conditions. Some restaurants are labeled as having "AVERAGE PRICE SENSITIVITY," which is determined by the willingness of customers in the area to pay. The platform is managed by data analysis consulting company Tiger Analytics, which former employees stated McDonald’s provided specific rules for implementing price changes. Franchisees have reported receiving strong price increase recommendations, with some, like George Michell in Connecticut, receiving advice to charge about $18 for a Big Mac meal. Michell disputed this, claiming it was an attempt to evict him from the network, though his restaurant reportedly did not suffer a loss in sales. In recent months, the AI has made more cautious recommendations, including occasional price reductions. McDonald’s has increased its control over pricing, requiring franchisees to "collaborate constructively" with the pricing tools and consultants approved by the company. In January 2026, new business standards mandated that franchisees adhere to these guidelines. Karen King, a former franchisee, stated that franchisees no longer have much choice in pricing due to pressure from McDonald’s headquarters. CEO Chris Kempczinski warned that non-compliance with pricing policies could affect franchisee evaluations, which influence growth projects and new location launches. McDonald’s asserts that its pricing tool is "a tool, not an obligation," and that restaurants located a few kilometers apart may have different costs. However, the tool warns franchisees that they "may be competitors" and to "fully comply with antitrust and competition laws." Legal experts, such as William Kovacic from George Washington University, note that this warning indicates a potential antitrust issue, though others argue the risk is low, as U.S. courts have allowed brands to set pricing guidelines for franchisees for decades. McDonald’s receives most of its revenue as a percentage of franchisees’ sales, meaning lower prices at restaurants can increase the company’s earnings. Franchisees, however, face rising operating costs, with estimates from the National Restaurant Association indicating a 36 percent increase since 2019. While some franchisees oppose price increases, others may face pressure to lower prices on certain products to attract customers. The AI-driven pricing model is not unique to McDonald’s, as similar practices are emerging in other industries, such as the airline sector. However, these practices raise concerns about privacy, individual pricing, and the ability of regulators to effectively address these issues. The use of AI in pricing strategies continues to be a topic of debate, with franchisees and customers expressing mixed reactions to the approach.