McDonald’s faces lawsuit over AI pricing tools for franchises

What the lawsuit alleges

Most McDonald’s restaurants in the United States are independently owned, and company policy says franchisees set their own prices. The lawsuit argues that McDonald’s built and used a platform that processed data from millions of daily purchases to inform menu pricing across thousands of restaurants.

The plaintiffs say that exchanging nonpublic pricing and sales data through the tool amounts to illegal coordination, ultimately pushing prices higher for customers. McDonald’s disputes that account. A company representative called the complaint inaccurate and said McDonald’s would defend itself vigorously. The company says AI does not set restaurant prices: franchise owners do. Its tools, the representative said, help franchisees make decisions for their businesses and customers but do not automate, coordinate or fix prices.

The plaintiff, Illinois resident Michael Thomas, says prices for his usual order—a Royal Cheeseburger, fries and Coca-Cola—varied between nearby restaurants in DeKalb, Illinois. His lawyers proposed bringing the case as a nationwide class action.

A recent Reuters investigation reported that some franchise owners had faced pressure to use AI pricing tools and report when they deviated from recommendations. McDonald’s challenged Reuters’ characterization, calling the report speculative and uninformed.

Different prices, different explanations

Customers have noticed price differences across neighborhoods, though those observations do not establish what causes them.

The case also lands amid broader concern about algorithmic pricing. Experts warn that AI-assisted price-setting could worsen affordability pressures in the United States. Lindsay Owens, head of the left-liberal think tank Groundwork Collaborative, said at least 90 bills targeting algorithmic price-fixing had been introduced nationwide this year. Owens recently published a book on the subject.

The line between advice and coordination

McDonald’s acquired AI company Dynamic Yield in 2019, but has firmly denied using AI to set menu prices. In a statement dated October 1, one day before the lawsuit was filed, it also rejected the idea that it uses dynamic pricing. The company described its tool as a source of information, with franchisees deciding whether to use it.

The dispute connects to earlier scrutiny of McDonald’s prices. In 2023, a $18 Big Mac meal at a Connecticut restaurant drew widespread attention. The franchise owner sued, claiming McDonald’s AI pricing tool had recommended that price. A McDonald’s document published in 2024 said the average menu item price had risen about 40% from 2019 to 2024.

I think the lawsuit’s central question is not whether prices differ from one restaurant to another; the examples show that they do. It is whether a system built to inform independent owners can do so without making their decisions less independent. The complaint alleges coordination, while McDonald’s insists the tool leaves pricing to franchisees. The company’s account of how the tool works will matter more than the label attached to it.