Facebook is rumoured to be in talks with McDonald’s to allow customers of the fast food restaurant chain to ‘sign in’ to show friends where they are eating.

The tie-up between the two brands would use the much-anticipated Facebook location updates, which were first suggested in March. These would work in a similar way to Foursquare or Gowilla.

American publication AdAge has reported that McDonald’s is in talk with the social networking giant to create an app which will give users an exclusive deal when they ‘check-in’ at one of its restaurants. The article also suggests that such an app would also be able to show what Facebook users are eating, as well as where.

Looking at the enthusiasm with which Foursquare has been welcomed by marketers in the UK, it seems likely that this McDonald’s app would be the first of many. In the UK FourSquare has yet to see the number of brand collaborations that it enjoys in the states. However this is changing as brands and agencies wake up to the popularity of several recent high profile campaigns. These have included a free pizza deal with Domino’s and the still continuing (at time of writing) Jimmy Choo Treasure Hunt.

In the Jimmy Choo Treasure Hunt, a pair of Jimmy Choo’s new trainers ‘check-in’ on FourSquare to some of the most exclusive and fashionable places in London, but only for a few minutes. Foursquare users can track the trainers and if they can catch them while still checked in at a venue, then they get to keep them. The idea was conceived by social media agency FreshNetworks and it is the first time Jimmy Choo has used a social media tool.

One question that arises from Facebook’s locating tool will be whether it will hinder FourSquare’s growth and potential to marketers. The move would also place Facebook in direct competition with location-targeted mobile advertising from AdMob and Apple’s iAd scheme.

Another question would centre on whether the UK is ready to share so much information online. Concerns over privacy on Facebook are mounting and while many users don’t seem to mind that much about sharing their pictures or bugs that allow their conversations to be seen by others, perhaps geo-locating will be a step too far. Brands would need to be wary about hitching themselves to a wagon that is perceived as unsafe, perhaps even sinister.

However this does not seem to be the case in the US. Kevin Barenblat, the CEO of San Francisco digital marketing firm Context Optional, told Ad Age that his clients are already preparing for the Facebook location function, even though it has not yet been announced. He says: “It’s supposed to come out this month. So we’re getting ready to incorporate it.”