A Big Mac costs $5.69 at one McDonald's in Fresno, Calif., and $6.89 at a location two miles down the road. Reuters highlighted that gap this week in an extensively reported story on the chain's pricing engine, and the ensuing social media reaction forced McDonald's top communications executive to issue a public denial.

Reuters' social media accounts said McDonald's "uses artificial intelligence to help set menu prices across the U.S. and some global markets," based on what local customers are willing to pay. Jon Banner, McDonald's global chief impact officer, responded directly on X: "Reuters got it wrong."

"AI does not set Big Mac prices, make automatic price changes, or determine what individual customers pay," Banner wrote. "McDonald's provides tools and recommendations, not automatic pricing. Franchisees set menu prices."

In a statement, the company said the claims "attempt to recast a standard business practice as something controversial. AI does not set the price of a Big Mac or any other menu item. The use of pricing recommendation tools and analytics is widespread across industries."

The distinction may sound like semantics, but it matters to operators and regulators alike. The mechanics work this way: McDonald's recommends that its franchisees use a pricing portal built by Deloitte, which has used AI and machine learning in its pricing products for years. Operators are not strictly required to use it. Every price must be input by a human being. The company does no dynamic pricing, and it does not price for individual consumers.

Franchisees have set their own prices for decades, a key component of their individual ownership. The reason is cost structure. Labor runs more in Seattle than in rural Alabama. Food costs more in Hawaii than in Illinois. Rent varies from store to store depending on location, the age of the restaurant, and the franchise agreement. The result: wide price variation even within tight geography — three McDonald's locations within a three-mile radius in one market priced Big Macs with a 40-cent spread, a variation documented as far back as 2021.

What is new is the sophistication of the recommendation engine, which may make those differences more noticeable. Pricing decisions have become complex, time-consuming, and software-heavy, making them a natural fit for machine learning tools.

For franchisees, the frustrating part may be the public reaction rather than the technology itself. Consumers worry AI will push prices higher and fear the arrival of dynamic pricing at fast food — the same fear Wendy's confronted in 2024. That anxiety is understandable given how airlines and other industries use similar systems.

Yet corporate pressure on franchisees runs in the opposite direction. McDonald's has pushed operators to keep prices down in recent years, and the company made value a bigger part of its franchising standards. Operators are not required to use the pricing portal, but they are rated on whether their prices deliver good value to consumers.

In other words, whatever AI sits inside McDonald's pricing recommendations today, the company's current incentives would likely push it to keep prices lower, not higher. Whether that reassures consumers — or regulators watching algorithmic pricing across the industry — is the question the Reuters report has now put on the table.