McDonald’s to emphasize value by updating franchising standards

McDonald’s It will soon evaluate franchisees on how their prices provide value as the company updates its franchising standards as part of a larger bid to win over cash-strapped customers.

“Effective January 1, 2026, we are enhancing our global franchising standards across all Segments to strengthen accountability for value leadership,” Andrew Gregory, McDonald’s senior vice president of global franchising, development and distribution, said in a memo published Monday and obtained by CNBC. he wrote. “With enhanced standards, we aim to provide greater clarity to the System to ensure every restaurant delivers consistent, reliable value across the full customer experience.”

Franchising standards are policies that define how McDonald’s operators must operate their restaurants. Continued failure to comply with these standards may result in penalties such as not being allowed to open another restaurant or even termination of the franchise.

Franchisees operate approximately 95% of McDonald’s restaurants worldwide and set their restaurants’ prices with input from third-party pricing consultants. Under the new standard, the company will “holistically evaluate” pricing decisions on how good value they offer, Gregory wrote in the memo.

“This approach allows franchisees to bring local understanding of how value is delivered in their restaurants,” he said.

The change comes after McDonald’s U.S. President Joe Erlinger told owners last month they needed to keep stepping on the gas and move forward with promoting the chain’s value proposition.

In the restaurant industry, restaurants focus on value and believe deals will attract cash-strapped customers. But discounts that are too high can cut into profits, and operators must strike a delicate balance to maintain both traffic and long-term profitability.

For more than a year, McDonald’s has reported that low-income consumers are spending less and visiting less often. To bring customers back to its restaurants, it began offering value menus in the U.S. and other key markets such as France and Germany. The efforts have paid off so far, with the company reversing same-store sales declines and attracting more high-income shoppers who are turning to fast food.

Still, McDonald’s CEO Chris Kempczinski said he expects the pressure on consumers won’t go away anytime soon.

“We remain cautious about consumer health in the U.S. and our major international markets and believe pressures will continue into 2026,” Kempczinski said on the company’s earnings conference call last month. he said.

The company’s change in standards is likely to anger some McDonald’s U.S. franchisees who already have a contentious relationship with their franchisors. An independent advocacy group of McDonald’s operators has pressed for the company to contribute financially to make discounts more sustainable for franchisees in the long term. A few years ago, a new rating system for franchisees drew the ire of some operators, who at the time said it would alienate workers in a tight work environment.

In addition to updating its franchising standards, McDonald’s has also invested in tools to help franchisees determine how to value value in their local markets.

“As Owners/Operators continue to set their own prices and make decisions that reflect local market nuances, we have now strengthened individual accountability for value leadership by equipping you with certified pricing advisors, tools, and other levels that support informed choices and elevate the overall guest experience at all ordering points,” McDonald’s U.S. Chief Restaurant Officer Mason Smoot wrote in a separate memo sent to U.S. franchisees on Monday and obtained by CNBC.