Posted on 10/04/2025 6:42:14 AM PDT by CIB-173RDABN
For decades, mid-tier casual dining chains have occupied a comfortable place in American life: a step above fast food, offering consistent menus, a sit-down experience, and a sense of convenience. Yet a closer look at the economics of these franchises reveals a system that inflates prices for consumers while funneling the bulk of profits to the parent corporation. Combined with changing consumer habits, mounting economic pressures, and reliance on consumer credit, this model may be approaching a breaking point.
At first glance, the price of a breakfast plate—eggs, bacon, pancakes—seems far above the cost of raw ingredients. Yet most people don’t see the layers of expense embedded in every menu item. While the franchise buys food in bulk, often securing eggs, flour, and dairy at deeply discounted wholesale prices, those costs represent only a fraction of the total. Labor, utilities, insurance, and equipment maintenance often account for the majority of expenses. Add in commercial rent—frequently paid to the corporate entity that owns the land—and royalties on sales, and the cost of delivering a single meal rises dramatically. In many cases, the corporation profits far more from these structural fees than from food itself, leaving franchise operators to pass the costs to the consumer.
Corporate management may provide centralized services, maintenance, or marketing, but these come with back charges to the franchisee. Every layer of corporate involvement—necessary or not—translates into higher menu prices. Even hedging commodity costs or buying in bulk cannot offset the cumulative effect of rent, labor, royalties, and corporate fees. Consumers, especially those living paycheck to paycheck, end up paying not only for the food but for the corporate infrastructure that surrounds it.
A hidden factor that keeps these chains afloat today is consumer debt. Many customers rely on credit cards or BNPL (Buy Now, Pay Later) programs to pay for meals, temporarily masking the fact that prices may be unaffordable. For debt-fueled spending, the immediate cost feels irrelevant; consumers are effectively borrowing their way to convenience. But this is a fragile foundation. If the credit bubble bursts—or if interest rates rise, limits are reduced, or defaults increase—customers will have far less discretionary spending available. Fewer people dining out will directly hit revenue, exposing how dependent the casual dining model has become on borrowed money.
History offers lessons on the danger of failing to adapt. Sears, once America’s retail giant, ignored the rise of online commerce and lost to Amazon. Kodak, which invented digital photography, clung to film and missed the digital revolution. Detroit automakers, heavily invested in fuel-inefficient vehicles, ceded market share to nimble foreign competitors. These examples illustrate a broader principle: even dominant business models can falter if they fail to evolve with the market.
Casual dining franchises face a similar inflection point. Inflation, higher labor costs, and rising rents are pushing prices beyond what many Americans are willing—or able—to pay. Meanwhile, the convenience of dining out is challenged by the simplicity and affordability of home cooking. Small, owner-operated restaurants offer competitive pricing, freshness, and flexibility that corporate chains struggle to match. As the debt-driven consumer bubble is tested, the fragility of the casual dining model will be exposed. If enough people reduce spending, the chain model—built on corporate overhead, fees, and high prices—may collapse under its own weight.
In the end, high menu prices at mid-tier casual dining restaurants reflect a combination of corporate greed, structural overhead, and reliance on consumer credit. Without fundamental changes—simplifying operations, reducing unnecessary corporate layers, or adapting to the real spending power of consumers—these chains risk irrelevance. Like the retail giants and industrial powerhouses of the past, decades of success offer no guarantee of survival in a rapidly changing economic landscape.
Love a lentil soup!
She’s right, you know. Better food at home. My daughter used to waitress and much prefers small locally owned places. Hubs uses the pick up truck and work truck indicator. If that’s where the farmers and truckers are eating, must be good.
If you and AI are doing the editing you should consider using a different AI program.
I go to a sort of deli occasionally for coffee. It costs $1.00. This is in a smaller midwest (i don’t mean Illinois either) town.....west of the Mississippi.
The portion size is also shrinking dramatically. That’s probably a good thing in this country...lol. BUT, don’t both raise prices and shrink portions. Sheesh.
Anyone with an IQ of fifty knows that the price of a restaurant meal includes a hundred factors besides the price of the uncooked ingredients.
I think it is a lot to expect restaurants to worry about whether the patron is dumb enough to eat out on a credit card without paying for last month’s eats.
One thing I’m noticing is that grocery and convenience stores are becoming more like restaurants. Meals ready to nuke and chow down. Just as easy as pie.
Oh, and eligible for SNAP. See, SNAP is a real contributor to food inflation, IMHO.
Reading lots about ridiculous prices at restaurants. It is higher here where I live, too, but maybe not quite as ridiculous as at many places. I am reluctant to say exactly where I live as as I am concerned that every cheapskate liberal in the country might want to move here. Of course, you must consider that wages here are not the best either.
It's the new normal. Click a random news article—you can notice it is written by AI.
Thanks for your thoughts—I understand your points about restaurant pricing, convenience foods, and SNAP. However, the focus of the essay wasn’t on those factors individually. The main point was that franchise casual dining chains risk decline if they refuse to adapt their business model to current economic realities and changing consumer behavior.
When I car travel, I take a small cooler and make a couple of sandwiches and drinks.
As kids, my parents would stop at a grocery store, get bread cheese and some sandwich meat and have chips and we would eat at a park along the way. (rural towns). People will go back to that.
As much as we conservatives tend to be hostile to inflation, we commonly do not recognize that hard money, deflationary policies tip the balance toward those with money and financial power.
Which one do you recommend?
The AI and I are still very much in a learning mode together. Any errors are on me if I don’t catch them—that’s my role in this process. Thank you for your comment; all criticism is appreciated and helps me improve my writing.
When they drive new expensive vehicles, that’s what gets me.
deflationary policies tip the balance toward those with money and financial power.
However, inflation such as practiced by the Biden administration is not arbitrary. Those who benefit the most are those the government gives the extra money to. That money mostly went to leftist organizations.
I could’t recommend any programs. I don’t use them for my writing. The kind of writing I do requires a lot of proofing. AI isn’t up to that task yet.
I once got curious about the cost of having a cup of coffee at home versus getting it to go. I ran a simple experiment.
I have my regular morning routine, like most people. I opened a fresh can of coffee and noted the date on my calendar. I kept to my standard three mugs of coffee every morning.
When the can was empty it was simple math to add up the number of 16 ounce cups of coffee (about 40) and divide by the price of the can.
It came out to about 12 cents per 16 ounces. Since then I never get coffee to go unless I am on the road.
PS: I drink my coffee black so I didn’t have to factor in milk or sugar.
“Sears, once America’s retail giant, ignored the rise of online commerce and lost to Amazon.”
Historically false. When Martinez came to Sears, a team of IT employees and consultants advised Martinez to put the Sears Catalog on-line on the internet, which was just emerging commercially. But Assistant VPs who had green screen 3270 monitors could not understand how a Sears catalog could be online and vetoed the idea.
Sears middle management vetoed all good ideas ...both those that came from the bottom and those that came from the top.
It came out to about 12 cents per 16 ounces. Since then I never get coffee to go unless I am on the road.
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I had a similar problem while working out of the house, I would make a pot of coffee when I got up and by mid morning I sill had half a pot and would make a new pot. Then I got smart and bought one of those coffee makers that use the K cups. They are little more expensive then your cup of coffee but there is not waste and every cup is fresh.
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