Why Your Local McDonald’s Might Not Have A $3 Menu

Times are tough. Prices are up, salaries are down, and it’s just damn hard to make ends meet. So forgive me for believing McDonald’s when they said they’d have 10 items available for under $3 at my local McDonald’s. It in fact was not within their power to make that call―an interesting development but one we have to dig into.

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Franchisees Have The Power

When McDonald’s creates a promo, it’s not as easy as just sending out a memo to all their franchise owners. Operators of individual McDonald’s locations actually have more say in the changes at their restaurants than one might imagine. It seems that with the $3 menu, more owners are pushing back than usual.

Most promotional deals go off fairly smoothly. Some individual franchise owners in expensive markets (airports, larger cities, etc.) might pass on the average deal that’s handed down from corporate but the vast majority usually go along with it. The adoption rate for the $3 menu is significantly lower than the average.

On McDonald’s Q2 earnings call, CEO Christopher Kempczinski (you know, the Big Arch guy) explained the main issue with McDonald’s $3 menu. “Part of that was due to the fact that we’re getting really inconsistent execution. Only about, call it, 60% to 65% of our system is currently executing the recommended pricing architecture with the 10 items for under $3.”

Corporate Greed Or Unreasonable Expectations?

It’s easy to get jaded when you walk into your local McDonald’s and don’t see the prices that were advertised to you. You could just walk out and boycott your neighborhood location entirely. In reality, it’s not that cut and dry.

McDonald’s franchise operators don’t have an exact say in the promotions that McDonald’s put out. They also don’t have to implement the promotions if they’re not feasible for their operation. McDonald’s own website shares “McDonald’s prices vary by location. Ninety-five percent of McDonald’s restaurants are independently owned and operated by franchisees, who have the ability to set their own prices.” Just because someone in an office decided a McChicken should be sold for a dollar doesn’t make it work for every market.

A Downfall Of The Franchise Model.

Franchising has done a lot of wonder for the restaurant industry. It allows a mom and pop team to open up a business that has shown to be profitable on their own. They hire local people, serve local people, under a model that can expand into nearly any market.

Those markets that actually happen to put strain on things when you start to get your orders from a singular entity. McDonald’s corporate office can send out a promotion but the local business owners who have to fight the many factors of operating a restaurant have the final call when it comes to how much a product rings up for.