A note before you read. Everything below is desk research, and every claim is sourced at the bottom. If you find anything that doesn’t match the facts, email us and we’ll correct it quickly and say so in the open — the way we did when we got an Iran claim wrong, when a reader’s Egyptian menu beat our index by 36%, and when a receipt from a French town of 11,000 checked our national figure.

McDonald’s ended 2025 with 45,356 restaurants. About 95% of them are franchised, and the company’s own annual report spells out what that buys the franchisee: control over “marketing and pricing decisions.” Read that again. The company whose burger anchors the most famous price comparison in economics does not, for the most part, set the price of the burger.

I sell a paid app. Apple takes one US number from me and turns it into roughly 175 local prices overnight — I’ve written about how badly that goes. That’s the model most people picture when they think of a global brand: one desk, one spreadsheet, prices flowing downhill. McDonald’s is the mirror image. Forty-five thousand desks, and the one in Chicago mostly isn’t allowed to touch the number.

I had a version of this wrong for years, so this piece is partly me correcting myself. Here’s how the machine actually works, country by country — and then what it does to the index this site is built on.

Three kinds of McDonald’s

The annual report describes three ownership structures, and pricing power sits differently in each.

Conventional franchise — the US and most of Europe. McDonald’s owns or leases the land and building; the franchisee buys the equipment and runs the shop, paying rent plus “royalties based upon a percent of sales.” The franchisee sets menu prices.

Developmental licence — much of Latin America, the Middle East and Asia. McDonald’s puts in no capital at all. A local company is “responsible for operating and managing their businesses, providing capital (including the real estate interest),” and pays a royalty on sales.

Affiliate — “primarily China and Japan.” Same as a developmental licence, except McDonald’s also holds a slice of equity and books its share of the profit.

Notice what the corporation earns in every case: a percentage of sales, plus rent. Not a percentage of margin. That one line explains almost every fight in the rest of this article. Headquarters is paid on volume. The operator is paid on what’s left after beef, wages and rent. When the two disagree about the right price for a burger, nobody’s being difficult — they’re reading different bank statements.

America: the price is the franchisee’s, mostly

In May 2024, after a viral $18 Big Mac meal did the rounds, McDonald’s USA president Joe Erlinger published an open letter. The average Big Mac “in 2019 was $4.39,” he wrote, “compared to $5.29 today, which is an increase of 21%” — not the 100% being repeated online. The $18 meal was real, “even if it was at one location in the U.S. out of more than 13,700.” And the sentence that matters here: “Franchisees set the prices for their menus at their restaurants.”

That isn’t modesty. In the US it’s close to a legal requirement. For nearly a century a franchisor dictating resale prices was automatically illegal under antitrust law. The Supreme Court’s 2007 Leegin decision moved it to a rule-of-reason test — so it’s now possible, and still litigation bait. Franchisors recommend. They don’t order.

So how does a nationwide $5 meal deal happen at all? By vote. Franchisees pay 1.6% of sales into a national advertising fund, OPNAD, run by a committee the operators elect. Any campaign with an advertised national price point “required a vote of the system’s 3,100 franchisees,” and “a vote of the entire system can take 30 to 45 days.” That’s from a 2015 account of the process, and the 2024 $5 Meal Deal went through exactly that gauntlet. The first proposal “did not clear necessary hurdles.” Coca-Cola stepped in with marketing money. Only then did it pass — and the franchisee association still said out loud that “there simply is not enough profit to discount 30% for this model to be sustainable” without corporate help.

That association, the National Owners Association, was itself born from a pricing fight. When it formed in October 2018, founder Blake Casper told the trade press: “Our ability to price our menu boards may be one of the last controls we still have.” Four hundred operators showed up to the founding meeting.

Which brings us to the twist. In December 2025 McDonald’s rewrote its global franchising standards to include “value.” From 1 January 2026 the company will “holistically assess” operators’ pricing decisions — in a system where, as the same report puts it, “value was largely left to individual franchisees and often varied market to market.” Headquarters can’t set your price. It can now grade you on it. Whether that’s a distinction with a difference is what the next couple of years of franchisee grievances will decide.

China: not Yum, and not Chicago either

First, a correction I owe myself. I assumed for a long time that McDonald’s China was run by Yum China, the way KFC and Pizza Hut are. It isn’t. Yum China’s own filings cover KFC, Pizza Hut and Taco Bell. McDonald’s doesn’t appear in them anywhere.

McDonald’s China is Golden Arches China — 金拱门, which is also what the company literally renamed itself in 2017. That year a consortium of CITIC and Carlyle bought 80% of the mainland, Hong Kong and Macau business; McDonald’s kept 20%. In November 2023 McDonald’s bought Carlyle’s 28% back, taking itself to 48%, with “the CITIC Consortium maintain[ing] its controlling 52% stake.” So the largest McDonald’s market outside the US is majority-owned by a Chinese state-linked conglomerate, with McDonald’s as the biggest minority shareholder and the brand licensor.

Who sets the price? Golden Arches does, and it says so in the plainest way possible — by announcing price rises in its own name. In January 2023 the 1+1 combo went from ¥12.9 to ¥13.9, citing “raw material and operating cost changes.” On 27 December 2023 McDonald’s China raised prices again, “an average increase of approximately 3%,” and the statement said it was “taking into account recent changes in operating costs.” Two rises in one year, both explained by the licensee, neither needing a vote in Illinois.

What actually goes into that 3%? Here I have to be honest about the limits of desk research: nobody publishes the spreadsheet. What the ownership structure does tell you is whose margin is being protected. Golden Arches pays McDonald’s a royalty on sales and keeps everything after costs, so its incentive is the same as any US franchisee’s — protect the margin — only with one board instead of 3,100 operators, and no antitrust rule stopping it from setting a single national price. The Chinese model is what the American model would look like if headquarters had won.

Japan: one company, two price lists

Japan is the other affiliate market, and it shows something the US can’t: tiered pricing inside a single operator. McDonald’s Holdings Japan runs roughly 3,000 stores. Its March 2025 price-revision notice states, in its own words, that “of approximately 3,000 stores nationwide, about 580 specific stores (special-location, urban-type and semi-urban-type stores) have different shelf prices and revision ranges,” with the rise attributed to “recent increases in energy costs, logistics costs and labour costs.”

That tier used to be tiny — about 40 airport and motorway sites on “city centre pricing.” It jumped to 184 stores in July 2023 “to cope with the increasing labour and rental costs,” and now sits near 580. The standard-store Big Mac went ¥450 → ¥480 in January 2024 and ¥480 → ¥500 in February 2026, per Nikkei and Japanese trade press. Two lessons. One operator deciding everything still can’t make one price work across Tokyo rents and Tottori rents. And the number The Economist prints for Japan is the standard-store price; the 580 stores where it’s higher aren’t in it.

Latin America and Europe

Arcos Dorados runs McDonald’s in 20 countries and territories across Latin America under a master franchise agreement — 2,428 restaurants at the end of 2024, the largest independent McDonald’s operator on earth. Its filings describe a “pricing strategy” for “inflationary environments” where it “was able to increase average check to keep pace with inflation.” In Argentina, where the peso “depreciated 357.4% in 2023,” keeping pace is not a quarterly exercise. I looked for how often Arcos actually reprices there — weekly, monthly — and couldn’t find a source that says. Anyone with a run of Argentine receipts, my inbox is open.

Europe is conventional franchising, and it produces the widest documented spread I know of. In January 2023 Le Parisien priced the Big Mac across France: €4.45 in Vincennes, €6.90 in Dijon, national average €5.40 — a 55% gap between the cheapest and dearest outlet in one country. Konbini’s one-line explanation: “Each franchisee is therefore free to charge for their Big Mac at whatever price they wish.” Our own French figure is €6.35, built from store-level tracking, and the one physical receipt a reader has sent us — Saint-Martin-Boulogne, August 2026 — came in at €6.40. Germany runs the same way; our Germany page carries a €6.09–€7.79 range by franchise for exactly this reason.

What this does to the index

The Economist says its prices “are from McDonald’s directly and from reporting around the world.” Since July 2022 the US figure is “a McDonalds-provided price” — before that, an average of four cities. Euro-area figures are weighted by Eurostat GDP and population.

Hold those two facts together. McDonald’s does not set US prices. McDonald’s provides the US price. The most-watched number in the index is supplied by a company describing a market it doesn’t control, summarising 13,700 restaurants whose owners went to war with it over a $5 meal. I don’t think that makes the number wrong — Erlinger’s $5.29 was clearly computed from something — but “the price of a Big Mac in America” is a statistical object, not a menu item, and the operator who printed the $18 one would tell you so.

For the other 53 markets, the ownership structure decides what the number even means. In China and Japan there is one operator, so a “national price” is a real decision somebody made — minus Japan’s 580 exceptions. In France, Germany, the US and the UK there is no such person. The national price is an average over a 55% spread, and whether the person collecting it priced Vincennes or Dijon is a €2.45 question the index doesn’t answer. That’s why this site keeps city-level figures where we can defend them, and why the methodology page treats a single receipt as a data point rather than a correction.

There’s a Chinese saying for all of this: 县官不如现管 — the county magistrate outranks the man on the spot, but it’s the man on the spot who decides. McDonald’s is the magistrate. Forty-odd thousand operators are 现管. The index measures what the man on the spot charged, and since January 2026 the magistrate has started grading him on it. Watch what happens to the spread.

Sources