McDonald's is using machine-learning models to guide what it charges for menu items across nearly 14,000 restaurants, with one of the system's inputs being an estimate of how much customers at each individual location will tolerate paying, according to an investigation by the Reuters news agency published on September 29.

The system analyzes millions of daily transactions and produces what the company calls an "optimal price" for every menu item at every location. Screenshots of the interface that franchisees use, reviewed by the agency, include messages telling an owner that their restaurant is showing "MEDIUM SENSITIVITY to price," based partly on "customer willingness to pay in your area."

The platform also ingests competitors' published menu prices, pulled from the online listings of nearby outlets such as Wendy's and Burger King. Both chains told Reuters they do not use AI in their pricing decisions.

Three franchisees said the engine has widened price gaps between restaurants selling the same product, including between neighborhoods in the same area. A Reuters check of the McDonald's app in September found a company-run store in Fresno, California, selling a Big Mac for $5.69, while another company-run restaurant two miles away charged $6.89, a 21% premium. The agency could not confirm whether the engine caused the difference. Whatever the explanation, the example illustrates the report's consumer-facing bottom line: identical menu items can carry noticeably different price tags within a single city.

The AI platform is run by Tiger Analytics, according to two former employees of the firm, with McDonald's supplying the rules and corporate targets. Those parameters have included concentrating increases on items whose prices have not risen in two years, and keeping ice cream and soft drinks out of price increases over the summer. Tiger declined to comment to Reuters.

Officially, franchisees set their own prices. Five owners said the company pressures them to follow its recommendations, however, and a document from June shows that McDonald's records deviations from suggested prices in detail. Since January, franchisees have been required to engage "constructively" with the company's approved pricing consultant and tools. Chief executive Chris Kempczinski reportedly told investors in August that "pricing non-compliance in certain cases" forms part of franchisee business reviews. The tension cuts to a defining question for the franchise model: how much pricing independence an owner truly retains when corporate software logs and reviews their decisions in detail.

The legal terms of the pricing portal warn owners that they "may be competitors" of one another and should comply with antitrust law.

Similar systems have drawn consumer backlash before, even as algorithmic, demand-based pricing has become a fixture of industries such as airlines, hotels and ride-hailing. Wendy's faced criticism in 2024 over reports that it intended to charge more at busy times. The company said those reports had misconstrued an earnings update about digital menuboards, which it said would allow it to vary menu displays and offer discounts more easily, and that it "would not raise prices when our customers are visiting us most." Separately, Instacart ended a limited test of AI tools that showed different grocery prices to different shoppers in December.

McDonald's described the portal as "a tool, not a mandate," designed to provide restaurant-specific recommendations, and said costs vary between stores that can sit in distinct markets even a few miles apart. The company called Reuters' reporting "speculative and uninformed" and said it takes antitrust compliance seriously. Whether the antitrust language built into the portal's own terms, or the franchisees' accounts of pressure, prompts any formal scrutiny is one of the open questions the report leaves behind.