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McDonald's $5 meal deal causes outrage among restaurant owners - as they write a damning letter to HQ
An independent group of McDonald's franchise owners have spoken out about the the chain's $5 meal bundle planned for this summer.
The US's biggest fast food chain is trying to lure back customers fed up with its price hikes.
Customers will get a total of four items - either a McDouble or McChicken sandwich, small fries, small soft drink and four McNuggets - for $5.
'The fact remains that in order to provide the consumer with more affordable options, they must be affordable for the owner/operators,' the board of the National Owners Association wrote in a letter to membership.
'McDonald's vast resources and financial investment are essential to any sustainable affordable strategy.'
McDonald's is doing a $5 meal deal bundle across restaurants nationally. This is the poster from the same deal in 2023 when it was run at selected local outlets
The letter says that McDonald's restaurants have small profit margins - of '10 to 15 per cent' - which makes it hard for them to run offers like the $5 meal bundle without help from head office.
'There simply is not enough profit to discount 30% for this model to be sustainable. It necessitates a financial contribution by McDonald's,' the letter says, according to CNBC.
DailyMail.com reported last week that not every restaurant will offer the deal - with those that have higher labor and rent costs opting out.
We also told how the deal will only last for a month from June 25 - rather than all summer.
Despite McDonald's making $14.5 billion profit last year, the deal is being subsidized by its drinks supplier Coca Cola and its franchisees, who run nine in ten restaurants.
A chunk of the funding for the promotion is coming from McDonald's longtime drinks provider Coca Cola - which will provide $4.6 million, according to the Wall Street Journal.
'McDonalds gross profit for twelve months ending in 2023 was $14.5 billion... maybe if they lowered the cost of their food, people would eat there again,' one person wrote on X about the the chain's recent profits.
Social media users aimed their anger at the McDonald's parent company, rather than the franchisees who - in many cases - are small business owners.
The new $5 meal bundle will the first meal deal with the same price nationally in decades. Most McDonald's are run by franchisees who set their own prices based on their costs - with labor and rent is much higher in some areas.
The franchisees voted to approve the deal last week. They are keen to lure customers back, even if they will have to subsize some of the cost of the deal.
It is not clear if McDonald's is stumping up some money too.
A McDonald's spokesman said last week: 'We know how much it means to our customers when McDonald's offers meaningful value and communicates it through national advertising.
'That's been true since our very beginning and never more important than it is today.'
The new deal an attempt to draw back customers who have been priced out by the chain's soaring menu prices, which now see a Big Mac meal priced as high as $19.
Over the last decade, the average cost of an assortment of typical menu items at McDonald's has doubled. Pictured are items to have increased in price the most
CEO Chris Kempczinski has stressed the need for affordability amid rising costs and inflation
In one location of the popular fast food chain, a Double Quarter Pounder meal was priced at $18.99 which would have been well above the $20 mark after tax was added
More upmarket outlets are trying to woo fast food customers. Chili's and Applebee's both have bruger meal deals for around $10.
Receent research also showed the extent McDonald's prices had risen in the past ten years - with many menu items doubling.
In one location of the popular fast food chain, a Big Mac meal was priced at $17.59 which would have been well above the $19 mark after tax was added.
McDonald's points out that franchises set their own prices.