Why does McDonalds charge so much for extra condiments?

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This is actually the first time I’ve heard of McDonalds charging for extra pickles. I don’t crave Mickey D’s very often, but when I do, nothing else satisfies. I’ve had UberEats deliver McDonalds to me, the delivery fees were more than the food cost.

The thing most people don’t realize about McDonalds is that at the corporate level, the company resembles a real estate agency more than a restaurant chain. They have corporate owned stores and franchises. The corporate-owned stores support the costs of running the corporate infrastructure. The franchises are what provide McDonalds with its profits.

But the profits don’t come in the form of restaurant sales. No, McDonalds owns the land and the building and the equipment, the franchisees rent it from them.

What this means is that when McDonalds has a good sales year, it’s not the corporation that’s capturing the bulk of those profits. It’s the franchisees. The flip side of it is that when McDonalds has a bad year, it’s not the corporation that takes the hit. McDonalds is thus shielded from the volatility of the fast food market, and instead is exposed to the real estate market. As you can imagine, it’s a lot less volatile than the restaurant biz.

Contrast this to Burger King, which collects franchise fees and takes a chunk of the revenue. Burger King’s fortunes rise and fall with the market, but more importantly, the franchisees can agglomerate and get big enough to challenge Burger King. Most recently this happened over pricing. Franchisees were claiming in court that Burger King was being forced to serve Value Meal sandwiches at a loss. They eventually earned the right to add 30c to the price of Buck Doubles.

So I searched for “McDonalds charging for extra pickles” and I found this article. If you notice it happens to be in the UK. The fast food biz, the acronym being QSR for quick service restaurants, needs to keep a tight leash on their American stores. The franchise legal contracts are extensive and McDonalds won’t even let you sign one and hand over half a million dollars to run a Mickey D’s until you’ve graduated an entire college course on the ins and outs of operating a McDonalds restaurant.

But this model doesn’t translate well overseas, so they often have to bend it. When I was living in Hawaii, I absolutely loved the Portuguese sausage, eggs and rice they served for breakfast. Overseas restaurants need to be able to respond to local tastes so they’re allowed a sometimes shocking degree of latitude. I saw a McDonalds in Aruba that was just horrible, looked like a Burger King, and not even a nice one.