McDonald’s faces proposed class action over AI-assisted franchise pricing

McDonald’s faces a proposed class action in federal court in Illinois over an AI-assisted tool that recommends menu prices to US franchisees. Filed on October 2 and reported by the Guardian on October 7, the suit alleges that the platform lets independently owned restaurants share sensitive pricing and sales information, potentially raising what customers pay. McDonald’s denies that its tools coordinate or fix prices; the allegations have not been decided by a court.

The plaintiff, Michael Thomas of DeKalb, Illinois, sued McDonald’s USA and McDonald’s Corporation in the US District Court for the Northern District of Illinois. The docket lists the case as an antitrust action. Thomas is seeking to represent a wider group of customers, but the proposed class has not been certified.

What the McDonald’s lawsuit alleges

The complaint says McDonald’s draws on store-level sales information from millions of transactions to produce menu-price recommendations across thousands of US restaurants. Because independently owned franchise locations may compete with one another, Thomas argues that feeding their nonpublic information into a shared pricing platform amounts to unlawful coordination. The complaint calls the alleged practice algorithmic price-fixing and says it has inflated prices. Those are the plaintiff’s claims, not established findings.

Thomas says he regularly buys a Quarter Pounder with cheese, fries and a Coke and noticed different prices at nearby McDonald’s locations. His suit seeks class certification, damages and an order barring agreements that he says restrict competition. A difference between restaurant prices, however, does not by itself show that a pricing tool caused it or that competing stores agreed on prices.

McDonald’s says franchisees make the final decision

In an October 1 statement, issued the day before the suit was filed, McDonald’s said its tool makes recommendations specific to each restaurant. It said the tool neither sets nor changes prices, does not adjust prices in real time and does not use an individual customer’s willingness to pay. The company says franchisees can reject a recommendation and independently choose their menu prices.

McDonald’s told the Associated Press that it has used an AI-enhanced pricing tool for more than a decade. AP reported that, according to the company, its recommendations account for factors including sales, location and competitors’ prices. That account describes how McDonald’s says the system works; it does not resolve the complaint’s claim about information shared between competing franchisees.

What independent reporting found about the pricing tool

Before the lawsuit, Reuters reviewed screenshots of the pricing engine and interviewed nine people with firsthand knowledge of it. Reuters reported that the system analyses millions of daily transactions across nearly 14,000 US restaurants and produces what McDonald’s calls an optimal price for items at each location. Its reporting gives a closer look at the tool, while the legal question of whether it enables unlawful coordination remains open.

Five store owners told Reuters they felt pressured to use the pricing tools. The news agency also reviewed a June franchisee document that recorded departures from recommendations and reported that a January 2026 internal communication urged franchisees to engage constructively with approved pricing consultants and tools. McDonald’s disputed Reuters’ characterization as speculative and uninformed and maintained that franchisees are free to set their own prices.

Reuters also reported that chief executive Chris Kempczinski told investors in August that pricing non-compliance was discussed in some franchisee business reviews. Separately, AP reported that he said only 60% of US restaurants offered a proposed menu of 10 items priced below $3. Those details show why the practical independence of franchisees’ decisions is disputed; they do not establish that any particular menu price was fixed.

What remains uncertain for customers

Prices can vary substantially between McDonald’s locations. Reuters found a Big Mac priced at $5.69 at one company-run restaurant in Fresno and $6.89 at another two miles away, a 21% difference, but said it could not establish whether the tool caused the gap. The Guardian also reported one customer’s account of a smoothie value meal costing about $15 in Manhattan and closer to $9 in Brooklyn. Neither comparison identifies the cause of the difference.

The Guardian reported that McDonald’s put the average increase in its menu-item prices between 2019 and 2024 at about 40% in a 2024 fact sheet. That company-wide figure does not establish that the pricing tool caused the increase. The case will turn on evidence about how the system handles franchisees’ information and recommendations, rather than on price increases alone.

The reviewed docket listing records the complaint and a jury demand, but says its information was last retrieved on October 3 and directs readers to PACER for newer entries. Later filings or rulings are therefore not established by that listing. For now, the suit remains a challenge to McDonald’s pricing practices, and the company contests its central allegations.