A 40% menu climb, and a lawsuit blaming the algorithm

McDonald's menu prices climbed 40% between 2019 and 2024, and now a DeKalb, Illinois, customer wants a federal court to declare that climb the product of algorithmic price-fixing.

Michael Thomas filed a potential class action in Illinois alleging that McDonald's AI-driven pricing recommendation platform — built with longtime consultant Deloitte — violates federal antitrust law by colluding with the chain's thousands of franchisees on menu prices.

The complaint leans on a Reuters report from the previous week that described McDonald's pricing tool as using AI to set prices. The company has called that report "wrong" and moved quickly to defend the system as advisory, not mandatory.

What does the lawsuit actually allege?

Thomas's complaint characterizes the pricing tool as a centralized "information-sharing" platform that pulls from millions of daily transactions to recommend menu prices across thousands of U.S. restaurants. The filing claims the system forces consistency in franchisee pricing decisions that franchisees should be making as independent competitors.

The lawsuit's core accusations:

• McDonald's pricing tool constitutes "algorithmic price-fixing aimed at customers who are already stretched thin"
• Franchisees are "competitors with one another," yet the platform coordinates their menu pricing
• The chain's own internal materials warn that the pricing portal "could run afoul of antitrust laws"
• Consumers "have paid on average higher prices over time" because of the system

The chain does not grant exclusive franchise territories, which it has historically defended as store-to-store competition. That overlap makes the antitrust argument more aggressive, since competing operators receive coordinated price signals.

How does McDonald's answer?

McDonald's fired back the same week with a fact sheet rejecting the AI-set characterization. The company stated that its pricing tool "provides restaurant-specific recommendations. It does not set or change prices. Franchisees decide what prices to charge and whether to use the recommendations available to them."

CEO Chris Kempczinski has publicly complained that franchisees already ignore the tool far too often. On McDonald's most recent earnings call, he noted that only 60% to 65% of operators followed pricing recommendations on a $3 and Under value menu. The lawsuit seizes on that gap, arguing that recent franchising standard changes now pressure adoption.

McDonald's argument, in its own words: "A recommendation is exactly that: a recommendation, not a mandate. Franchisees are not required to accept a pricing recommendation."

The company also calls the approach "standard business practice," noting that businesses have long weighed local costs, customer demand, competition, and economic conditions. Deloitte remains McDonald's named pricing consultant, providing recommendations to individual restaurants.

Why does this year matter for franchisees?

In 2025, McDonald's built a larger value component into its franchising standards. Operators now receive ratings based on whether they effectively used the chain's tools to deliver value to consumers. The lawsuit claims franchisees are effectively required to use the consultant and tools, with adherence tracked internally.

That change tightened the leash on franchisees who had been resisting the recommendations. It also thickened the antitrust exposure: the more closely operators hew to a centralized recommendation, the more the system resembles the coordinated conduct the Sherman Act targets.

Price dispersion across the system underscores how variable operator-level pricing can be. McDonald's acknowledged that menu prices in some high-cost cities run roughly double those in low-cost markets, evidence of franchisee discretion the lawsuit argues is being eroded.

What happens next?

The Illinois court will need to clear class certification before the suit reaches the merits. McDonald's will likely move to dismiss on the grounds that the pricing platform is advisory and that franchisees retain final pricing authority. The plaintiffs will press for discovery on adoption metrics, internal communications about antitrust risk, and the Deloitte engagement.

The litigation lands as McDonald's leans harder into value-tier menuing in a year when overall chain sales growth has slowed. How a federal judge parses "recommendation" versus "mandate" — and whether 2025's franchising standard revisions become exhibit A — will shape pricing autonomy for the chain's U.S. operators for years to come.