McDonald’s Corporation announced a new set of franchising standards that will take effect on January 1 2026. The memo, issued by Senior Vice President Andrew Gregory, requires franchisees to align their menu pricing with the company’s value‑leadership goals and subjects them to a holistic assessment of pricing decisions.
Under the revised framework, franchisees who fail to meet the new criteria may face penalties that include denial of permission to open additional restaurants or termination of existing franchise agreements. The policy is designed to ensure that each of the company’s 44,000‑plus locations delivers consistent, reliable value to customers while protecting McDonald’s royalty and rent streams.
The move reflects a broader strategy to counter declining traffic from low‑income consumers, a segment that has been hit hard by inflation and rising living costs. By tightening pricing oversight, McDonald’s aims to win back price‑sensitive customers and maintain its competitive edge in a market where value propositions are increasingly scrutinized.
With approximately 95 % of its restaurants owned and operated by independent franchisees, the new standards will affect the vast majority of the network. Franchisees will need to demonstrate that their local pricing strategies are in line with corporate value goals, a requirement that could create friction but also encourages tighter alignment between corporate objectives and local execution.
Industry analysts note that McDonald’s is not alone in grappling with price sensitivity; competitors are also revisiting value menus and pricing strategies. The new policy positions McDonald’s to better manage the “K‑shaped” economy, where lower‑income consumers are pulling back while higher‑income consumers continue to spend.
Chief Executive Officer Chris Kempczinski has previously acknowledged the pressure on low‑income consumers and emphasized the need to balance passing on higher costs with retaining these customers. Andrew Gregory, SVP of Global Franchising, Development and Delivery, will lead the rollout of the new standards, drawing on his experience in engaging with franchisees and understanding their operations.
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