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In Lisbon, Portugal, on January 12, 2025, people sit by a McDonald's storefront. McDonald's rolls out new value deals, like the McValue Menu, to combat economic challenges and attract budget-conscious customers, as global sales face pressure amid shifting consumer trends.
Luis Boza | Nurphoto | Getty Images
McDonald's will soon assess its franchisees on how their prices deliver value as the company updates its franchising standards as part of a larger bid to win over cash-strapped diners.
"Effective January 1, 2026, we are enhancing our global franchising standards across all Segments to reinforce accountability for value leadership," Andrew Gregory, McDonald's senior vice president of global franchising, development and delivery, wrote in a memo issued Monday and obtained by CNBC. "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 the policies that define how McDonald's operators should run their restaurants. Continued noncompliance with those standards could result in penalties, like not being permitted to open another restaurant, or even the termination of the franchise.
Franchisees run about 95% of McDonald's restaurants worldwide and set their restaurants' prices, with input from third-party pricing advisors. Under the new standard, the company will "holistically assess" pricing decisions for how well they offer value, Gregory wrote in the memo.
"This approach enables franchisees to bring local insight to how value is delivered in their restaurants," he said.
The change comes after McDonald's U.S. President Joe Erlinger told owners last month that they needed to keep their foot on the gas and stay the course on promoting the chain's value offerings.
Across the restaurant industry, eateries have been leaning into value, betting that deals will attract cash-strapped customers. But discounts that are too steep can cut into profits, and operators have to strike a delicate balance to preserve both traffic and long-term profitability.
For more than a year, McDonald's has reported that low-income consumers have been spending less money and visiting less frequently. To bring diners back to its restaurants, it has rolled out value menus in the U.S. and other key markets like France and Germany. The efforts have so far paid off, as the company has reversed same-store sales declines and attracted more high-income diners who are trading down to fast food.
Still, McDonald's CEO Chris Kempczinski said he expects that the pressure on the consumer isn't going away anytime soon.
"We continue to remain cautious about the health of the consumer in the U.S. and our top international markets and believe the pressures will continue well into 2026," Kempczinski said on the company's earnings conference call last month.
The company's change in standards is likely to rile some McDonald's U.S. franchisees who already have a contentious relationship with their franchisor. An independent advocacy group of McDonald's operators has pushed for the company to contribute financially to make discounts more sustainable for franchisees in the long run. Several years ago, a new grading system for franchisees drew the ire of some operators, who said at the time that it would alienate workers in a tight labor environment.
In addition to updating the franchising standards, McDonald's has also invested in tools to help franchisees determine how to address value in their local markets.
"While Owner/Operators continue to set their own prices and make decisions that reflect local market nuances, we've now strengthened individual accountability for value leadership – equipping you with approved pricing consultants, tools, and other levels that support informed choices and elevate the overall guest experience across all order points," McDonald's USA Chief Restaurant Officer Mason Smoot wrote in a separate memo sent to U.S. franchisees Monday and obtained by CNBC.
