McDonald’s Happy Meals is expected to get pricier next year after McDonald’s decided 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 issued by the company, 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,” the act that the company is doing for last 20 years.
The company will eliminate the monthly contribution starting in 2021.
The memorandum said, “We recognize this subsidy has been in place for many years. However, it is no longer fueling growth in the way it once was.”
“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.”
One of the representatives for the fast-food giant said that because McDonald’s does not set prices in franchised restaurants, a franchisee is able to adjust pricing.
The spokesperson said Franchisees own 95% of McDonald’s locations in the U.S.