McDonald's was hit with a proposed nationwide class action in federal court in Chicago on Friday, alleging the chain illegally coordinates menu prices across franchised and company-owned restaurants through an AI-powered pricing system covering nearly 14,000 US locations.

The complaint, filed under US antitrust law, accuses McDonald's of conspiring with independent franchisees to fix prices using algorithms trained on nonpublic data. It cites a Reuters report that the company's pricing engine uses machine learning to continually analyze data from millions of daily transactions across its US footprint.

Reuters reported last week that the system suggests prices for items such as the Big Mac based on customer willingness to pay, and that other fast-food companies are also adopting AI for pricing and operations.

"Independent businesses must set their prices independently," the lawsuit states.

How has McDonald's responded?

The company dismissed the allegations in a Monday statement, calling them speculative and uninformed.

"AI does not set the price of a Big Mac or any other menu item," McDonald's said. The company maintains that franchisees make their own pricing decisions and noted that pricing recommendation tools and analytics are widespread across industries.

The suit lands days after McDonald's publicly brushed off earlier reports about its AI pricing practices as overblown.

Who is behind the case?

The plaintiff is an Illinois resident seeking to represent a class of potentially millions of McDonald's customers. Lark Turner, a lawyer for the plaintiff, said McDonald's is "leveraging its troves of data and its franchised system to nickel-and-dime consumers down to the last French fry."

The case adds McDonald's to a growing wave of US class actions alleging that companies used algorithms or AI to illegally coordinate prices for hotel rooms, apartment rentals and other consumer purchases.

What's at stake for the franchise model?

The legal theory cuts at the structure of the franchise system itself. If a franchisor's algorithm effectively aligns pricing decisions across thousands of independently owned operators, plaintiffs argue, the traditional legal separation between brand and franchisee no longer insulates the pricing process from antitrust scrutiny.

For McDonald's, the suit threatens the data infrastructure behind its revenue management at a time when the company has positioned machine-learning tools as central to operations across its system.

A court's answer to whether algorithmic price recommendations constitute unlawful coordination could shape how every major franchised chain deploys AI pricing tools going forward.