A decision by McDonald’s to change the way it subsidizes franchisees could lead to an increase in the price of a Happy Meal.
The fast food chain is reportedly getting rid of a decades-old deal with franchise owners that helps cover the cost of those Happy Meal toys.
Starting in 2021, McDonald’s will stop sending the roughly $300 monthly contribution, called the “Happy Meal rent and service fee,” to it’s U.S. restaurants, according to an internal message.
"We recognize this subsidy has been in place for many years," reads the memo viewed by Business Insider. "However, it is no longer fueling growth in the way it once was."
Franchisees will be able to increase the price of a Happy Meal by 20 cents to offset the difference. McDonald’s doesn’t set menu item prices, and lets franchisees decide depending on location.
Franchisees are reportedly not happy about the subsidy being eliminated, and other new fees that will start next year.
"COVID is surging, and they're worried about taking our Happy Meal subsidy?" a franchisee told Business Insider. "It's not something that families in America want. They want a value-priced Happy Meal."
McDonald’s told CNN they are finding ways to provide other subsidies.
McDonald’s only owns about 5% of their restaurant locations in the U.S., the other 95% are owned and operated by independent franchisees.