McDonald's is surrendering control of its dollar menu to franchisees as fast-food chains battle for budget shoppers

Hollis JohnsonMcDonald’s $US1 $US2 $US3 menu.
  • McDonald’s is making changes to win over budget shoppers with adjustments to its $US1 $US2 $US3 menu and the return of the 2 for $US5 Mix and Match deal.
  • Franchisees will have more control over the $US1 $US2 $US3 menu starting in January, meaning that the new year could bring fewer – or more – items on your local value menu.
  • On Friday, the 2 for $US5 Mix and Match deal returns, now offering the fresh-beef Quarter Pounder as an option.

McDonald’s is making some changes to win over budget-conscious shoppers.

On Thursday, the fast-food chain announced it is bringing back the 2 for $US5 Mix and Match Deal, as well as revamping its $US1 $US2 $US3 menu.

McDonald’s is revamping its $US1 $US2 $US3 menu in early January, allowing local franchisees to have more flexibility regarding what is and is not on the menu. For some customers, that could mean fewer – or more – items on the value menu.

“Local markets and owner/operators will have the opportunity to offer delicious food and beverages at a great value on the $US1 $US2 $US3 Dollar Menu, while also meeting the tastes and preferences of their local customers,” McDonald’s representative Andrea Abate told Business Insider in an email. “Because the enhancements to the $US1 $US2 $US3 Dollar Menu are more locally driven, the number of items may vary by market.”

All McDonald’s locations will continue to offer $US1 soft drinks and $US2 small McCafĂ© beverages. Beyond that, it will be up to local franchisees to decide what items make the menu.

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The dollar menu is dead

Additionally, starting Friday, McDonald’s 2 for $US5 deal returns for a limited time. The deal allows customers to order two menu items – including the Big Mac, Filet-O-Fish, and 10-piece McNuggets – for $US5. This time around, McDonald’s is adding the Quarter Pounder with Cheese, made with fresh beef, as a new option.

McDonald's Meal Deal 5Hollis Johnson/Business InsiderMcDonald’s classic $US6 meal deal.

With the return of the 2 for $US5 deal, the classic $US6 Meal Deal will come to an end.

McDonald’s has spent the last year grappling with how to win over budget shoppers. The $US1 $US2 $US3 menu, launched in early January 2018, was supposed to fill the hole that the death of the Dollar Menu left in 2013.

However, the $US1 $US2 $US3 menu did not become the silver bullet that some had hoped. Franchisees said the menu didn’t live up to the hype. One day in March, the company’s shares fell 4.8%, marking the worst dollar decline in history, following a RBC Capital Markets note that said the menu had failed to resonate with customers. In October, the chain cut the Happy Meal from the menu.

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McDonald’s quietly killed its best deal as fast-food chains battle to win over budget shoppers

The chain has struggled to use the $US1 $US2 $US3 menu to drive traffic, which is typically the point of value menus. Neil Saunders, the managing director of GlobalData Retail, wrote in a note in October that McDonald’s “has focused too strongly on the Dollar Menu.”

At the same time, McDonald’s has also been facing backlash from franchisees.

In October, franchisees formed the chain’s first-ever independent franchise association in order to push back on some corporate practices and initatives. As franchisees say they struggle to grow traffic and margins, turning over greater control of the value menu could be one way in which the company’s corporate leadership hopes to make peace.

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