Did you know that McDonalds don’t set the prices in their franchised restaurants, the franchisees do.

Technically, you could walk (or drive!) into several McDonalds and they could all have different pricing.

I suspect that the reasoning behind this approach is that they want the franchisee to operate as independently as possible, while applying their local market knowledge.

However, McDonalds wants to see this independence reflected in performance.

They want to see the most effective balance between pricing, and what the market will pay. Too cheap and you’re flushing profit down the toilet. Too expensive and you lose sales.

The result, especially in population dense areas with multiple outlets, is that most franchisees are copying each other, and pricing becomes highly standardised anyway.

But there have been the odd few getting it wrong, and McDonalds have come down on them hard, retaining and enforcing their right to dictate pricing if the franchisee can’t.

Some people within franchising don’t like this. They think that McDonalds are strangling the very autonomy that they claim to want their franchisees to have as independent business owners.

"How much of this is actually mine to run?" is the question that prospective McDonalds franchisees should be asking themselves, according to one commentator.

He went on to cite examples of other franchises (which he referred to as ‘brands’ - see below), who allow their franchisees much more freedom and control.

Here’s what he misses though, and what it teaches us about branding;

Unlike the vast majority of franchised 'brands', the McDonalds brand ACTUALLY means something.

I often wonder why people think that a ‘brand’ is a tangible thing that can be superficially ‘created’.

Many think of a ‘brand’ as a logo, a colour scheme, or a punchy tagline. There is also currently a very odd and inaccurate trend of referring to businesses, of all shapes and sizes, as ‘brands’.

As I’m constantly saying, a brand is NOT a business. Businesses HAVE brands. You can not start a ‘brand’, you start a BUSINESS, and then build the brand.

What a brand actually is, as I’ve also said many times, is the reputation of your business. Or as I saw it very eloquently put recently, your brand is ‘accumulated trust’.

You have to earn it. And McDonalds have spent multiple decades building that accumulated trust.

So their franchisee's job effectively, becomes simply to see that everything runs smoothly and not screw up.

That is not the case in other franchises. No matter how much they, or anyone else, calls them 'brands', the vast majority of the time, the value of their brand exists only in the heads of the people incentivised to believe in it.

Eg - the people who are paid to sell it.

In the marketplace, where customers live, it usually means squat.

So because there is no brand value, the franchisee ACTUALLY has to build a business and a local brand from scratch.

The only value that the franchise offers to the franchisee are the systems and the support. The ‘brand’ is usually of no value whatsoever.

It is usually just a name and a logo. It doesn’t have decades of ‘accumulated trust’.

So when talking about McDonalds relative to other franchises, you're talking apples and oranges.

Pricing, like anything else, is strategy. It should be measured on performance. If franchisees get it wrong consistently, there is absolutely nothing wrong with McDonalds correcting, or even punishing them for it. As long as they're fair when doing so.