As rising fast food prices hit consumers' wallets, you may notice that some McDonald's restaurants charge more for their food than other locations. And we're not talking about the difference between, say, New York and Los Angeles prices compared to the rural Midwest; but a difference is possible only over a city or neighborhood.
As it turns out, there's a pretty straightforward reason for this, as explained by former McDonald's corporate chef Mike Haracz in a recent video posted to his popular TikTok account, where he regularly shares tips, tricks and insider secrets about the leading fast-food chain.
Haracz was responding to a user comment asking how much autonomy franchise owners have in setting menu prices. The user said they noticed “small but noticeable differences” in the Minnesota Twin Cities area with different owners.
“Actually, the owner-operators determine their own prices, McDonald's cannot necessarily dictate the prices,” explained Haracz. “However, they're proposing what we think the price should be. So they've put together a business case and say, 'We think this is the price because of XYZ factors.'
@chefmikeharacz In response to @Todd Former #McDonalds corporate chef talks pricing. #mcdonaldshacks #mcdonaldtitok
♬ original sound – chef Mike Haracz
“Now owner-operators set the price themselves, but they have to take into account rent, employee turnover, minimum wage and all of that to really set prices based on information about referrals,” he continued. that there are many things that owners want to raise, such as if they are located in an airport or in a high-rent area, or if they are simply “greedy”.
“These things change the price of McDonald's, and therefore if one location is owned by someone and another location is across the street, the food prices can be different,” Haracz concluded.
That's exactly why many franchise owners initially balked and said they would ditch the $5 meal deal that McDonald's launched earlier this year. Still, despite protests from the owner-operator, the promotion proved popular with the chain, so much so that the company extended it through the end of the year.