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.
There is nothing wrong with AI writing.
You will be assimilated into the Borg.
Resistance is futile.
All of my illegible and unintelligible writing is done by myself. I write my comments, read over them to check spelling and make corrections, check sources for factuality to make sure I am not laying down bull excrement, then post. Then I reread to find where the errors are which I will be unable to correct so I will permanently be looked at as illiterate. I make sure not to abbreviate anything or put commas or dashes in places that they don’t belong.
I don’t ever use AI. I’m not going to help AI to get better. Stay away from it. Do your research w/o it.
BNPL for a restaurant meal? I didn’t even know that was a thing, that there was a way to do that other than with a credit card. Through PayPal and the like?
I went to a college located in Appalachia in the ‘70s. I can remember being in the grocery store and seeing people who would use food stamps for their groceries, taking them out to the car, then peeling off some twenties from a roll of cash and buying alcohol and lottery tickets. Gaming the system has been going on for decades.
Of course, if you provide the location and the prep, cooking, serving and cleanup.
My favorites are Chili’s and Olive Garden.
Good food, pleasant atmosphere, affordable, good count (good size portions).
Tips.
Don’t order beverages, water is still free, even with lemon. (AND refills are FREE)
Don’t order appetizers, now cost almost as much as entrees.
Don’t order dessert. (Get an ice cream cone on the way home)
Don’t over tip. No one is worth over $10 for dinner for 2.
The franchises that are pricing themselves out of business are the “Fast Food” franchises.
K cups are the most convenient way to make coffee. They can be economical as well. The individual pods can be as much as a dollar each if you buy Starbucks. The cheapest ones are the Costco brand, which they have 3 different varieties in a box of 120 that cost about 33 cents a pod but I don’t think they taste that good, or good enough to drink every day. I usually pay 25 to 41 cents for pods by shopping the discount rack at the back of the store. This way I can get a variety of flavors. I also buy a lot.
At home I use about 5 of them every morning. I’m on my third one right now. I also use them in the RV with a giant power station. I have taken my Keurig to the beach just so I could drink a few cups of coffee at the beach.
The franchises that are pricing themselves out of business are the “Fast Food” franchises.
It is said that McDonald’s corporation is not in the food business, they are in the real estate business. The corporation (for most locations) own the land and building, they then charge the franchise holder rent. They also provide maintenance, which they charge for. There is a whole list of charges that the corporation expect the franchise to pay.
If they wanted to lower the price of their food they could lower the amount they expect the store to pay.
Is this smart business, only the customers will decide.
I don’t think that has anything to do with them being franchises. Non-franchise mid level restaurants are getting more expensive too. And low level. And high level. #$%^s gettin more expensive across the board.
“We too have noticed the high cost of eating out for breakfast”
Me too. I’ve never been big on eating out for breakfast. In a typical year, I’ve probably averaged 3 or fewer restaurant breakfasts. However, circumstances this past June caused me to eat a couple of breakfasts at “Black Bear Diner,” a California-centric chain along the lines of Denny’s/IHOP. An eggs/bacon/french toast type combo runs $18-ish. Throw in a $5 coffee and a $6 orange juice, you’re pushing $30. With tax and tip you’re pushing $40. For a basic breakfast? That’s insane. Seems to me that restaurant breakfasts like this are a very poor value and something that I intend to avoid going forward. Lunch and dinner, by comparison, don’t seem quite so crazy. There are lot of sit-down places where I can get a burger, fries and a beer for like $20.
BNPL for a restaurant meal? I didn’t even know that was a thing, that there was a way to do that other than with a credit card. Through PayPal and the like?
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Yes, BNPL (Buy Now, Pay Later) is real—and it’s not just for retail purchases. People are now using it to order restaurant meals and even have them delivered. For example, a $10 burrito plus delivery can quickly reach $20, and if a payment is missed, the high interest can make that burrito essentially never paid off.
The total outstanding BNPL debt is approaching the level of credit card debt, which is concerning. Unlike credit cards or banks, BNPL companies are largely unregulated and often don’t require much credit history to sign up. It’s convenient, but it can be very risky.
I don’t ever use AI. I’m not going to help AI to get better. Stay away from it. Do your research w/o it.
Yowser! It looks like interest rates up to 36% are the norm!
https://www.forbes.com/advisor/personal-loans/best-buy-now-pay-later-apps/
PayPal indeed by far the largest in the space:
https://www.oberlo.com/statistics/top-bnpl-companies-in-usa
You think having AI write your articles is the same as working with a team of editors?
Wow. That’s sad.
AI is useful. But only lazy people use it to write their articles.
Again, sad.
“I could write a article without AI editing but it would not be as good.”
Up your game. And do not trust AI for research. It’s liberal.
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