McDonald’s $3 Value Menu Stalls as Franchise Execution Falls Short
CEO Christopher Kempczinski attributes weak second-quarter sales to inconsistent pricing by independent operators and the removal of digital loyalty offers.
McDonald’s new $3 Value Menu has failed to meet corporate expectations, with the company’s chief executive citing inconsistent execution by franchise operators as a primary driver of underperformance. During the second-quarter earnings call, CEO Christopher Kempczinski revealed that only 60% to 65% of US locations are currently implementing the recommended pricing architecture for the 10 items priced under $3.
The promotion, known internally as the Every Day Affordable Price or EDAP menu, was launched in mid-April with what CFO Ian Borden described as unanimous approval through franchisee field votes. Despite this initial consensus, the rollout has faced significant friction. Kempczinski noted that the menu “has not delivered against our expectation,” pointing to the gap between advertised deals and the reality in-store.
The issue stems from the fact that approximately 95% of McDonald’s restaurants in the United States are independently owned and operated by franchisees who retain the ability to set their own prices. While most operators generally adopt national promotions, many opt out of low-margin deals to protect their unit economics, particularly in high-cost real estate areas such as airports and rest stops.
Compounding the problem, McDonald’s removed digital offers and the Buy One, Add One program to clear the way for the new value menu. Kempczinski described this move as a “bad trade,” noting that digital offers are core to the company’s loyalty program and highly valued by its most loyal customers. He stated that the combination of the underperforming EDAP program and the loss of digital promotions accounted for two-thirds of the company’s quarterly sales miss.
As a result, McDonald’s reported weak 0.8% same-store sales growth in the US for the second quarter. The disconnect between corporate strategy and local execution has created confusion for consumers, who may see national advertising for dollar deals but encounter different pricing at the register.
RTM Nexus CEO Dominick Miserandino highlighted the structural challenge, noting that while corporate can spend millions on national ad campaigns, the franchisee owns the register. “When a franchisee looks at a low-margin national promo and realises it eats into their bottom line, they simply opt out or jack up prices elsewhere on the menu to offset it,” Miserandino said.
