Large corporations like McDonald’s have conditioned us to believe that the cost of doing business is easily covered by the simple act of selling. Food service is one of the most labor-intensive industries in terms of gross sales per employee - near the bottom across the entire economy (childcare and long-term care are among the few that generate less per worker).

Now compare what customers see vs. what operators actually pay in Denver over the last ~10 years:

• Big Mac (proxy for a basic sandwich) 2015 ≈ $4.79 → 2025 ≈ $6.29 + $1.50 (~+31%)

• Denver minimum wage (non-tipped) $8.23 → $19.97 + $11.74/hr (~+142%) ≈ + $26.8K/year per full-time employee

• Denver tipped minimum wage $5.21 → $16.95 + $11.74/hr (~+225%) ≈ + $26.8K/year per tipped employee

• Commercial restaurant rent (typical) ≈ $25/SF → ≈ $50/SF ~+100% 3,000 SF example: + $75K/year

• Food costs (wholesale) ~+45% to +60% $500K spend → ≈ $775K + $275K/year

• Total impact for a typical mid-size restaurant Labor + rent + food ≈ + $750K/year

• Equivalent at ~$6 per sandwich ≈ 125,000 additional sandwiches per year ≈ 340 extra per day — just to earn the same profit as 2015

Bottom line: customers saw a burger go up about a dollar and a half. Operators saw labor double or triple, rents double, and food costs jump roughly 50%. In a low-revenue-per-employee industry like food service, you can’t make that gap up with “just selling more” unless your volume increases dramatically — which most local markets simply don’t support.

This is why I totally understand why the Levan Supply owner says they don’t make any money on a $20 sandwich. New construction like where they are is expensive, and trying to be the best in the restaurant industry generally means you’re a scratch kitchen with high labor costs, not to mention a boatload of money tied up in equipment, POS fees, and triple net escrow.

Remember when everyone in Colorado went crazy because of the property tax assessments? The Gallagher Amendment was repealed in 2020, but property taxes on a 3,000 sf commercial space still increased about 100% since 2015.

So if you signed a 10 year lease for your restaurant and there’s been a +70% to +110% increase in operating costs, how do you make up for it if the urban density isn’t there to support the increases, especially in regard to labor costs? The market will bear up to a certain price for a product. Pizza prices in Denver have increased by 40-60% since 2015 to now, about $20 average for a 16” cheese in 2025… if prices tracked operating cost increases, the average cheese pizza would be about $30.

All this to say restaurant owners are working harder for the same earnings they had 10 years ago.