LOS ANGELES - Happy Meals could get pricier next year after McDonald’s decision to end a two-decade-old deal with its franchisees that has subsidized the price of Happy Meal toys for customers.
According to an internal memo from the company obtained by FOX TV Stations, the fast-food chain will no longer issue a $300 per month contribution to its 14,000 U.S. restaurants under the “Happy Meal Rent and Service Fee,” which it has been doing for about 20 years.
The company will eliminate the monthly contribution starting in 2021.
A photo illustration of a Happy Meal at McDonald's on November 3, 2010 in San Francisco, California. (Photo by David Paul Morris/Getty Images)
“We recognize this subsidy has been in place for many years. However, it is no longer fueling growth in the way it once was,” the memo read. “To maximize our Own the Ambition plan, we believe there is an opportunity to instead invest in other areas, such as making bold moves to support our restaurant employees. We will seek owner/operator input on the right ways to invest but will end the Happy Meal Rent & Service Fee subsidy on January 1, 2021.”
A representative for the fast-food giant said that because McDonald’s does not set prices in franchised restaurants, a franchisee is able to adjust pricing.
Franchisees own 95% of McDonald’s locations in the U.S., the spokesperson said.