McDonald’s to Evaluate Franchisee Pricing for Customer Value Under Revised Standards

McDonald’s will begin evaluating franchisees on how effectively their pricing delivers customer value as part of an update to its global franchising standards aimed at appealing to budget‑conscious diners.

Effective January 1, 2026, the company is strengthening franchising requirements across all segments to increase accountability for value leadership, Andrew Gregory, senior vice president of global franchising, development and delivery, wrote in a memo obtained by CNBC. “With enhanced standards, we aim to provide greater clarity to the System to ensure every restaurant delivers consistent, reliable value across the full customer experience,” he added.

Franchising standards define operational expectations for McDonald’s operators, and repeated noncompliance can result in sanctions such as limits on opening new restaurants or termination of franchise agreements. Franchisees, who operate about 95% of McDonald’s restaurants worldwide, set local prices—typically with input from third‑party pricing consultants. Under the revised policy, McDonald’s will holistically assess pricing decisions to judge how well they deliver value, Gregory wrote, noting this allows franchisees to apply local market insight to value delivery.

The update follows remarks from McDonald’s U.S. President Joe Erlinger urging owners to sustain efforts to promote the chain’s value propositions. Across the restaurant industry, operators have emphasized value offerings to attract consumers under financial strain, though steep discounts can compress margins and require a balance between driving traffic and preserving long‑term profitability.

McDonald’s has reported reduced spending and fewer visits from lower‑income customers for more than a year. To encourage repeat visits, the company introduced value menus in the U.S. and other key markets such as France and Germany—moves that have helped reverse same‑store sales declines and attracted higher‑income customers trading down to fast food.

Despite these measures, CEO Chris Kempczinski warned that consumer pressures are likely to continue. “We continue to remain cautious about the health of the consumer in the U.S. and our top international markets and believe the pressures will continue well into 2026,” he said on the company’s recent earnings call.

The revised standards could face pushback from some U.S. franchisees amid an already strained relationship. An independent advocacy group representing operators has urged McDonald’s to provide financial support to help make discounts sustainable. A previous franchisee grading system also drew criticism from some operators who argued it risked alienating staff in a tight labor market.

Alongside the standards update, McDonald’s has invested in tools to help franchisees develop local value strategies. In a separate memo to U.S. franchisees, McDonald’s USA Chief Restaurant Officer Mason Smoot emphasized that owner/operators will continue to set their own prices while noting the company has “strengthened individual accountability for value leadership – equipping you with approved pricing consultants, tools, and other levers that support informed choices and elevate the overall guest experience across all order points.”