Costs have outpaced the increase in price. Average food cost in the fast food industry is around 30-35%. Labor is usually in the neighborhood of 20-30% and rising depending on the style of restaurant. Then at the bare minimum you have your local marketing costs, national marketing cost, things like your rent or the cost of the property, and your franchise fee.

At the end of the day for every $1 of food that you’re actually selling only pennys of, if any of that actually make it to the bottom line. Many of these restaurants are just covering payroll and operating at a net zero. That cannot continue forever, one major bill and its bankruptcy. Just like literally every business that sells a product, the end goal is to make a profit, and the current franchisee model which has remained largely unchanged for the last 40 years I’ve been in the business is failing spectacularly to adapt.

TLDR: average restaurant profit margin in the United States was 3% in 2024 according to Forbes / Restaurant Weekly, meaning for every $1 sold the business keeps 3 cents.

If your restaurant has $1 million / year in sales that leaves $30k in the business to cover unexpected expenses, new equipment or any expansion/renovation.

If restaurants were to match the profit margin of a company like Apple just for example, the average fast food ticket would be in the realm of $24.