Basically the market sets the price. If you pay your employees $8 per hour and your competition hires away your trained employees you either raise the wages you pay or your competition will out sell you.
If you have a franchise, your franchise fees remain the same no matter what you pay, your rent remains the same, your utilities remain the same. Sooner or later you raise your prices and the people who used to buy from you 5 days a week can’t afford you so they only come 2 times a week. How do you continue to pay those fixed fees?
The basic issue for any small business is can they increase revenue enough to cover increased expenses.
If they cannot they are done.
A one time big wage hit is disastrous.
The total amount customers will spend on eating out is not going to immediately rise.
Did those people stop eating?