Comment Re:Technically, I think its "price experimentation (Score 1) 161
Most McDonalds locations, they are franchised by individual franchisees. A franchisee can own multiple restaurants, but many don't because the buy-in is so insanely expensive.
What the tool here is doing is comparing pricing in your area compared with franchisees near you and across the country to estimate a price sensitivity of your customers, then suggest higher prices. So if you are charging $2 for a hash brown and a nearby different franchisee is charging $2.89 and people are largely still buying it, it can "suggest" you raise the hash brown price to $2.49 or $2.59 or $2.89.
The legal argument falls on what RealPage is arguing about YieldStar, that the tool provides advice, the franchisees aren't officially all agreeing to set prices, and it's "just a suggestion", when in reality the end goal of the tool is to help franchisees understand the maximum price the market can bear by collaborating via a dataset McDonalds owns. The legal argument is that the franchisees are not sitting down together to price fix, they are all "talking to a guy named Bob" (the points of sale reporting the sales and menu item prices per location to McD corporate in this tool) and the "guy named bob is merely suggesting prices" (Bob knows information that would not be trivial to gather and provides a recommendation).
McDonalds wants to make it attractive to be a franchisee so they're providing this tool to help franchisee profits. They're attempting to abandon liability by putting in the fine print it's just a suggestion bro, if you get sued it isn't our fault.
God bless corporate America!
What the tool here is doing is comparing pricing in your area compared with franchisees near you and across the country to estimate a price sensitivity of your customers, then suggest higher prices. So if you are charging $2 for a hash brown and a nearby different franchisee is charging $2.89 and people are largely still buying it, it can "suggest" you raise the hash brown price to $2.49 or $2.59 or $2.89.
The legal argument falls on what RealPage is arguing about YieldStar, that the tool provides advice, the franchisees aren't officially all agreeing to set prices, and it's "just a suggestion", when in reality the end goal of the tool is to help franchisees understand the maximum price the market can bear by collaborating via a dataset McDonalds owns. The legal argument is that the franchisees are not sitting down together to price fix, they are all "talking to a guy named Bob" (the points of sale reporting the sales and menu item prices per location to McD corporate in this tool) and the "guy named bob is merely suggesting prices" (Bob knows information that would not be trivial to gather and provides a recommendation).
McDonalds wants to make it attractive to be a franchisee so they're providing this tool to help franchisee profits. They're attempting to abandon liability by putting in the fine print it's just a suggestion bro, if you get sued it isn't our fault.
God bless corporate America!