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McDonald's Will Raise the Price of This Item for the First Time in Decades

The company is cutting a long-standing subsidy program, so customers will be picking up the tab.

McDonald's recently announced several internal changes to its relationship with franchisees. And while most of them won't affect you, one will certainly impact the price of one of McDonald's most popular menu offerings: the Happy Meal.

The company said it would be cutting off a long-standing subsidy program for Happy Meals, which awarded franchisees an additional $300 a month to keep the popular children's meals as cheap as possible, according to Business Insider. Without the program, the prices of Happy Meals will likely go up for the first time in decades, and the change is likely to take effect as early as Jan. 1. (Related: McDonald's Is Making These 8 Major Upgrades.)

This is the latest in a string of announcements that will shift additional costs to McDonald's franchisees, and operators are not happy. Several of them have spoken out in frustration over the announcement, reports Business Insider, with one of them stating "COVID is surging, and they're worried about taking our Happy Meal subsidy? It's not something that families in America want. They want a value-priced Happy Meal."

The fast-food giant commented on the news by stating that franchised locations set their own prices for each menu item, implying they could still keep the prices of Happy Meals the same and "eat" the additional cost themselves. However, one disgruntled operator said of the idea, "If McDonald's doesn't want to eat it, why would I?" So it looks like the additional cost will be felt by customers instead.

It's no secret that McDonald's franchisees, who operate 95% of the brand's locations in the United States, don't always see eye-to-eye with corporate leadership. For example, the operators had been dismayed by having to serve All Day Breakfast for years, claiming their process is slower and they are less profitable due to the full-day extended menu. And while McDonald's finally listened and indefinitely discontinued the All Day Breakfast amid the pandemic, it seems that tensions are still running high as corporate leadership announced it will be cutting several corporate contribution programs in the coming year.

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Mura Dominko
Mura is a Deputy Editor leading ETNT's coverage of America's favorite fast foods and restaurant chains. Read more