McDonald’s emphasizes value by updating franchise standards

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

“Effective January 1, 2026, we are strengthening our global franchise standards across all segments to enhance accountability for driving value,” Andrew Gregory, McDonald’s senior vice president of global franchise, development and delivery, wrote in a memo issued Monday and obtained by CNBC. “With the enhanced standards, we aim to provide greater clarity to the system to ensure every restaurant delivers consistent, reliable value across the entire customer experience.”

Franchise Standards are policies that determine how McDonald’s operators operate their restaurants. Continued non-compliance with these standards may result in sanctions, 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 restaurant prices, with input from third-party pricing consultants. Under the new standard, the company will “thoroughly evaluate” pricing decisions for how well they deliver value, Gregory wrote in the memo.

“This approach enables franchisees to provide local insight into how they deliver value in their restaurants,” he said.

The change comes after McDonald’s US president Joe Erlinger told owners last month that they needed to stay on their feet and push ahead with promoting the chain’s value proposition.

Throughout the restaurant industry, restaurants have been leaning toward value, betting that deals will attract cash-strapped customers. But discounts that are too big can lead to lower profits, and operators have to strike a careful balance to maintain traffic and profitability over the long term.

For more than a year, McDonald’s has reported that low-income consumers spend less money and visit restaurants less frequently. To bring diners back to its restaurants, it has rolled out value menus in the US and other key markets such as France and Germany. The efforts have paid off so far, as the company has been able to reverse the decline in same-store sales and attract more high-income fast-casual diners.

However, McDonald’s CEO Chris Kempczinski said he expects the pressure on consumers will not go away anytime soon.

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

The company’s change in standards is likely to anger some U.S. McDonald’s franchisees who already have a contentious relationship with the franchisor. An independent advocacy group of McDonald’s operators has pressured the company to contribute financially to make discounts more sustainable for franchisees in the long term. Several years ago, a new classification system for franchisees angered some operators, who said at the time that it would alienate workers in a cramped work environment.

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

“While owner/operators continue to set their own prices and make decisions that reflect the nuances of the local market, we have now enhanced individual accountability to drive value — providing you with certified pricing advisors, tools and other levels that support informed choices and elevate the overall guest experience across all points of order,” Mason Smoot, McDonald’s USA’s chief restaurant officer, wrote in a separate memo sent to U.S. franchisees on Monday and obtained by CNBC.