All articles tagged with #franchisees
A federal lawsuit filed in Illinois alleges that McDonald's AI-enhanced pricing system violates antitrust laws by sharing nonpublic data with competing franchisees. The suit claims this coordination raises prices for consumers, while McDonald's maintains that franchisees retain final control over menu pricing.
A proposed class-action lawsuit in Chicago alleges that McDonald's uses artificial intelligence to coordinate menu prices across its U.S. franchise network, violating antitrust laws. The suit claims the company's pricing engine reduces competition among independently owned restaurants. McDonald's disputes the allegations, stating that franchisees retain final control over pricing and that the AI tool is merely a recommendation system. The case follows a Reuters investigation revealing that the pricing engine analyzes transaction data to suggest optimal prices, leading to significant price variations between nearby locations.
McDonald's has launched 'McDonald's > NEXT,' a multi-year strategy to reverse sales declines by investing $8.5 billion through 2036 in AI-driven operations, hand-breaded chicken, and nostalgic restaurant designs. The plan aims to outperform Burger King, which recently posted significantly higher sales growth.
McDonald's launched a multi-year strategy to reverse sales declines by investing $8.5 billion through 2036 in AI-driven operations, hand-breaded chicken, and nostalgic restaurant designs. The plan aims to outperform Burger King, which recently posted significantly higher sales growth.
McDonald's is counting on its September investor day to lay out a credible path to reaccelerate U.S. same‑store sales and margins, with management expected to signal quicker menu and marketing tweaks, potential SG&A leverage next year, and renewed unit growth despite a challenging macro environment; analysts say investors want a clear fix for the slowdown and a believable long‑term growth plan as franchisee discussions and digital initiatives take center stage.
Wendy's is grappling with a turnaround, reporting 289 US restaurant closures in the first half and a 7% drop in US same-store sales in Q2. CEO Bob Wright says the chain will take a more targeted approach to closures to strengthen franchise health, amid ongoing leadership turnover and stiff competition from McDonald’s, Burger King, and others. Analysts expect a clearer plan and don’t foresee a meaningful turnaround before 2027, with the stock having fallen sharply over the past several years.
Papa John’s is accelerating a plan to close about 300 underperforming restaurants by end-2027, with 44 locations shut in Q1 2026 across 17 states (mostly franchised and more than a decade old) to boost profitability and franchisee health. Management says closures target restaurants averaging under $600,000 in annual sales and will be offset by cost savings and a stronger supply chain, with roughly 200 closings expected in 2026 to concentrate resources in priority markets.
Wendy's plans to close 5%-6% of its U.S. restaurants (about 28 closed in Q4; remaining cuts expected in H1 2026) after an 11.3% drop in Q4 same-store sales and a 5.2% decline for the year, as it navigates value competition and leadership changes; franchisees may drop breakfast, and the company will roll out new chicken sandwiches and a cheesy bacon cheeseburger later this year.
Budget hotels across the U.S. have become a frontline in protests against ICE, with activists staging late-night noise and last-minute bookings to pressure hotels to refuse service to federal agents. Chains face a dilemma between non-discrimination policies and potential backlash, as incidents such as Hilton dropping a Lakeville, Minn. Hampton Inn after a clerk was filmed allegedly refusing to rent to agents illustrate. The actions highlight tensions affecting immigrant-owned franchises and hotel workers during the immigration crackdown, with more protests anticipated in other cities.
Dickey's Barbecue Pit, once rapidly expanding, is now facing significant decline with closures and legal disputes, largely due to franchisee dissatisfaction and allegations of misrepresentation, highlighting the importance of strong parent-franchise relationships for success.
McDonald's is launching a new McValue menu on January 7, offering customers more savings options, including a buy one, add one for $1 deal and $5 meal deals. The menu will feature breakfast and lunch items like Sausage McMuffins, McNuggets, and McChickens, allowing customers to mix and match their favorites. The initiative aims to provide personalized value options in collaboration with franchisees.
McDonald's is set to launch its new McValue platform across U.S. restaurants on January 7, 2025, offering a range of value deals including the $5 Meal Deal, exclusive in-app offers, and a new Buy One, Add One for $1 offer on popular items. The initiative aims to provide customers with more affordable options and customizable deals, reflecting feedback from franchisees and customers nationwide.
Fast-food chains like McDonald's, Wendy's, and Burger King are temporarily reintroducing value meals to attract inflation-weary customers, despite the financial strain on franchisees. These value meals are often break-even propositions, relying on customers to purchase additional items to maintain profitability. Franchisees are feeling the pinch from rising costs, including higher wages and ingredient prices, but see value meals as a strategy to increase market share and customer traffic amidst economic pressures.
McDonald's U.S. President Joe Erlinger refutes claims that the company has significantly raised prices beyond inflationary rates, addressing concerns over reports of an $18 Big Mac meal. He clarifies that the average price of a Big Mac has only increased by 21% since 2019, from $4.39 to $5.29, due to inflationary pressures. Franchisees, who set their own prices, reflect the increased costs of running their businesses. McDonald's is planning promotions to counteract flat or declining traffic in its top markets.
McDonald's USA President Joe Erlinger addressed concerns over reports of high Big Mac prices, emphasizing that such instances are exceptions and not the norm. He noted that the average price of a Big Mac has risen by 21% since 2019, not the 100% suggested by some reports. McDonald's profits have surged by nearly a third since 2019, and the company plans to introduce $5 combo meals to reinforce its value brand image amidst inflation and "greedflation" criticisms. Pricing is set by franchisees, with the $18 Big Mac being an outlier in a high-income area.