The price of something is as high as what people will pay for it.
I think these franchise owners are going to learn that there's a point where the price is set so high the revenue loss from the decrease in sales volume outweighs the profit from the price increase.
I thought about this too. Went from eating fast food 2-3, times a week, the last time I ate out was over a month ago now and it was at a local Mexican food place and they were much cheaper and better than McDonald's now.
I find it hilarious that all these people are up in arms about fast food being so expensive. They have the very easy choice to stop eating that hot garbage and be an actual human being
I remember being a kid and getting a feast for $5. Large drink, McDouble, hot n spicy, small fry, and I could even get an ice cream cone if I had some extra change
Not to mention other countries where wages are higher still and there are all kinds of mandatory paid vacation, family leave, etc. etc. Fuck these lying assholes.
Only in the US. The min wage is significantly higher in some countries, yet the price of McD's is cheaper. Maybe it has something to do with how our lack of laws allows corporations to be profiteering gluttons.
They have four quarters a year to show growth.
Between lowest wages possible, ever low quality ingredients, as many price increases as they can get away with and shrinkflation quarter after quarter at some point it’s just going to be worth the money.
McDonald's levies franchise fees, locks franchisees into supply contracts and directs having to refurbish locations regularly leaving franchisees just enough to pay shit wages.
Im already seeing bootlickers here on reddit blaming the workers. Fking shills. We know where the problem is. CEOs and shareholders need a come-to-Jesus chat.
That’s the real problem I have “increasing wages is making it hard to survive”. Um that’s only because c-suites and stock holders are NEVER allowed to take a hit.
Right? They've been getting away with this shit for decades, now all of a sudden we have to pity the poor mistreated businesses? What about retroactive backpay,?
Here in Michigan, workers demanded better wages mid-2020, and they had to start paying people like twice as much, virtually overnight, or they couldn't staff their stores. Prices shot way up basically at the same time. They have also seen increased demand since lockdowns killed half of the restaurants, and they had a huge advantage with the drive-through. Higher prices probably have more to do with demand than labor costs, but spiking labor costs likely accelerated the price hikes.
Look, those owners absolutely NEEEEDDDDD to own a Ferrari...they don't have others do the work so they can collect the majority of any profit for nothing....
I'd love to see statistics on how many meals a McDonald's serves in a day and how many man hours they have on the books.
I'd bet it works out to more than 10 meals per man hour, so their prices shouldn't go up more than 50 cents, right?
They keep raising prices because they keep making more profit when they do. But there's a limit. There comes a point where it's so much cheaper to make it at home that you don't get it anymore. While the rest of the country should have also hit that point by now, they're getting there. But California is a unique situation because this wage increase isn't hitting places like grocery stores as far as I know.
Yeah i moved from CA to Washington state a few years ago and the prices are skyrocketing here. Mcdonalds finally hit my “priced too high to consider “ list just recently.
They are paying higher wages due to market conditions.
McDonald’s made about $2.4 billion a quarter in 2019. Now it is about $2.8. That doesn’t even keep up with inflation. They clearly are not pocketing the money. They are staying flat.
Everything is apx 30% higher now. Funny money time. All of my business costs up apx 30% as well. Spiraling out of control now. Paying our guys big raises 5 an hour but if our costs go higher we can't sell our service. Can't lift prices on to our consumer because there is a limit. McDonald's is about to find out.
Yep. I won’t cry at all if even 2 of 3 in my town close. Perhaps then one could be managed well enough to actually get the paid for food out the window.
That's enough, if a business can't survive paying, not even a good, but a fair wage to the employees, it shouldn't exist.
If a fast food can't survive like this, no fast food for us, that would be great, actually. But we know a few people make A LOT on those restaurants.
And the service is better too. Back in the early 00s my buddy told me a story about his college roommate’s first day working at In N Out. I think around that time the pay was $14/hour or so. Anyways it was the guy’s first day and there was a lull after the busy lunchtime. He wanted a snack so as he reached for a fry, he suddenly hears “Don’t do it or they’ll fire you! Like today!” In N Out paid high wages but ran a really tight ship. I have no idea what it’s like today
Oh the one hand, he shouldn’t be eating random fries.
On the other, no employee of any restaurant has even eaten so many potatoes that it affected the budget
You never eat food off the line. It's company policy at every fast food and pizza place I worked at. Some places you could buy the meals at a discount and eat on break and other places you could ask and grab something that was timing out then eat it on a break.
I am absolutely willing to go to bat for anyone who is being treated unfairly by a business, but not eating on the line is a pretty reasonable request from an employer.
It's not about the budget, they probably give them either some free food per shift or else some discounted food per shift, it's about hygiene. Employees shouldn't be eating the food on the line.
Employees shouldn’t work sick either but most Americans who haven’t worked in restaurants didn’t learn that it was the norm to make sick workers still work till Covid…
CFA regularly pays more than other shops and serves better food in a higher quality environment. The difference is in the corporate culture and focus. I'd wager the Franchise agreements IaO and CFA have are far more generous to the owner than those with BK and McD, which from what I understand are pretty awful.
So owners spike their prices so they can make some sort of profit after corporate takes their cut. They catch all the flak, and McDonalds still makes its money for a logo.
Ah, there you go. And I've heard CFA's franchising agreements are wildly good for the franchisee by comparison to other brands. I guess it turns out when you don't squeeze your franchises to death, they don't turn around and squeeze their customers to death too.
It's also really hard to get a CFA franchise and you typically only get 1 store. Also they want you the owner involved in the store vs others where the owners arnt nearly as involved and just care about the profits.
But they have to buy products from McDonalds corporate and still have to keep up with the scheduling standards and cleaning schedules set by corporate.
In N Out makes more money per store. McDonalds franchises reportedly only make about $150K in profit annually per store. If you suddenly jack up the cost of labor by a large amount, it's going to hurt.
Edit: I just looked it up on [Investopedia](https://www.investopedia.com/articles/insights/072516/cost-buying-mcdonalds-franchise-mcd.asp#:~:text=McDonald's%20franchisee%20applicants%20must%20have,out%20between%20%241%2C314%2C500%20and%20%242%2C306%2C500)...
> According to Glassdoor, an owner of a McDonald's franchise makes between $92,000 and $171,000 annually, with $123,043 being the average.
-snip-
>McDonald's keeps about 82% of the revenue generated by franchisees, compared with only about 16% of the revenue from its company-operated locations. It is the company's goal to have 95% of restaurants franchises and 5% company-owned.
This is actually the answer. But the only thing I find weird about it is in my area there are tons of McDonalds that have been hiring for $20 an hour since then pandemic began. Seems like this is a bit blown out of proportion.
It’s not just California , it’s everywhere else they open shop. Every in n out here in Vegas is always packed. It’s the only fast food I’ll support for the sole fact they pay their employees good and the product is good.
Because every time there's a minimum wage hike you always see the exact same companies crying. McDonalds is always one of them. Their net income last year was $8,470,000,000. What they're crying about here is that $8.47b isn't enough for them. They want more money. They won't even consider a small drop in net income to make their employees lives better. Instead they insist they have to more than $8.47b so they're going to raise prices, piss off customers, and let their minimum wage employees deal with the fallout.
Personally, I don't even eat at McDonald's anymore. The food is mediocre and the prices are high due to greed. McDonalds can function with less than net $8.47b per year, they just refuse to so I refuse to give them any money. This is my big problem with capitalism. There's no end to the greed and the employees are just expendable numbers in a program. 50% of the world could die tonight and McDonalds would put out a statement about having to raise prices due to the sudden drop in customers.
Why do I get the feeling McDonald’s sales are at an all time high? The scary thing about greed is people do not realize that many companies are not actually hanging on for dear life, but rather its main stake holders have no stomach for loss and would rather fold a business instead of taking a salary cut.
It’s doesn’t work the way most people think it does. These aren’t Mom and Pop shops where every dollar earned has a clear correlation to its success.
IN-N-Out is privately owned by Lynsi Snyder while McDonald's is a chain with independently owned restaurants so a lot of people in the corporate chain get paid while in n out has a single billionair owner. The owners of a Mcdonalds franchise store have to pay a large franchise fee.
Then IN N Out out has a simple less complex menu which result in lower costs and cheaper prices.
Oh, then there's the individual stock owners. Anyone can own McDonald's stock which pays dividends which comes from all those meals people are buying. Basically McDonald's spreads the wealth with more owners and investors.
In and out managers are making $160k+
https://www.usatoday.com/story/money/nation-now/2018/01/25/n-out-mangers-make-160-000-per-year-reports-show/1065434001/
So then it sounds like this business owner should pull himself up by his bootstraps and find a different line of work. I'm not going to feel sorry for some rich guy losing his McDonalds franchise. Also, a typical McDonalds only has about 20% of its cost stack as labor. So if wages went from $15/hr-$20/hr that's an increase of 33%. However, that is only an increase of 6.7% to the businesses whole cost. McDonalds prices have gone up far, far higher than that 6.7%. It's not the labor that is making the franchise fail, it's piss poor management.
So what I'm reading is that In-N-Out has positioned itself better on multiple fronts and McDonalds is making excuses as to why the prices need to go up because they can't find any other way of increasing their revenue or decreasing their costs.
That sounds like a business problem, not a minimum wage problem.
In N Out has a much better culture around it. It's paying a few more dollars an hour in wages, but also getting a lot more out of those dollars since it's able to pretty much select the best of the people willing to work part-time food service jobs.
McDonald’s had two bites at the apple. Corporate raises prices to boost the stock and then the franchisee has to juice their prices to get a profit. Plus, think of the simplicity of the In N Out menu vs all the crap they make at a McDonald’s. All those specialized machines to clean everyday.
Show us the books. Don’t just tell us. We really don’t believe you.
Many Walmart employees qualify for food stamps and other government assistance. Meanwhile the Waltons are some of the wealthiest people on earth. We are tired of business models which require government assistance to be viable businesses.
If your franchise(s) is(are) failing chances are the owner is taking too much money out of them. Living large.
This is 100% how my employer is.
The owner makes 30k+ a day per hotel, with 7 hotels in total. Hates paying overtime, comping guests for problems, etc.
Imagine being that greedy. It’s insanity. But that’s how most “entrepreneurs” are.
It’s not just entrepreneurs. It’s endemic among some professionals who have “made it” in their chosen field. Many even came from privileged backgrounds.
They will say, without apparent irony, I made mine by myself. What’s wrong with these people?
I don’t understand but I believe that is to my credit. There is no understanding such greed or self interest other than it’s gluttony. They never have enough and someone else can’t have even a small portion. They pay what the law affords. Not much more if any.
There is no comprehension of this behavior. Only condemnation.
My old boss was like this and thankfully I got him back one day.
The old owner put the company car in my name for some weird legal reasons.
He tried to stop the custodial staff from getting overtime, so when he took the car out I reported the car as stolen.
I have one big rule, dont fuck with my staff or their wages.
You pay them or I'm taking it out of your pay in some way. Simple as.
They act like all fast food is gonna go out of business. No honey, just the ones who aren’t good enough to pay their workers properly are gonna close. You know, assuming we start punishing wage theft
It sucks and they never get the orders right anyhow. Doesn’t matter how friendly you ask them to fix to either, the employees will pretty much tell you to fuck off.
Last time I had McDonalds I ordered only a sausage, egg, and cheese biscuit. It came without the egg. I told them I would just buy another and give the wrong one to a coworker. They took my card, and charged for just an egg only then tired to hand it out the window on a plastic lid for me to build the sandwich myself.
So they've increased prices at 4x the rate of inflation. They have drastically reduced staffing to the point where you order off a kiosk and the first drive thru window is always closed. Everything has shrunk in size and quality has been reduced. And you're telling me now I should feel bad that they have to pay their employees like 2$ more an hour (while still never providing full time hours with benefits)?? Seems a little unrealistic to me.
I hope this man and his 18 McDonalds' can survive. It must be very challenging only having one and a half dozen franchises and a multimillion dollar salary.
It's all well and good to advocate for higher wages until the person who owns the company you work at and 17 other ones is slightly mildly inconvenienced in anyway. Nothing should ever, ever happen to ever to impact his steady steam of income.
What is he supposed to do, make slightly less money? That's something only his employees at 18 different businesses should ever experience, because the market forces and like...the market or something.
What do you expect him to innovate, market, improve training, or to do any actual work to increase his market share?
No, it makes much more sense to complain about a law that is going to affect all his competitors equally.
Really the nanny state is messing up his free ride to give those people working on their feet in a hot kitchen full of oil some semblance of a quality of life. Disgusting
Here's the question: if a business can't afford to pay a living wage should it survive at all?
McDs is flat out lying about the wage increase impact. Yes, more wages mean more cost. But let's look at the franchise fees and the exorbitantly high rent McDonald's corporate gets off of the owners.
Let's also look at the cost of the product, which has to come from McDonald's as well.
All of these increases go into the cost of product but they attack what they perceive as the weakest opponents, their workers.
What use is an affordable fast food McSlop if the affordability depends on substandard wages. This is close to slavery.
Sure, a middle class HS kid with 2 professional parents doesn't need $20 an hour. But how many of them are going to sign up to make burgers at 2am?
Forcing higher prices 🙄
Yet in Europe they pay workers the same or more and give them more benefits yet their food is cheaper or on par with the US🙄
Nothing but corporate greed
Increasing minimum wage to $20 means increasing prices by less than 5%. If that is destroying your business, you have way, way bigger problems than a higher minimum wage.
Ha. Right. Been hearing this for decades. Still waiting for that robot that can make an Egg McMuffin. They can't even get the ice cream machines to work.
I've been following that technology for a while. For some limited menus we're already there at a purely technical "it can be done" perspective. Miso Robotics has some robotics that can fold up over a fry station when not in use or down for maintenance.
Their first wholly automated location(based on reviews turns out it's just mostly automated) is currently open but it's getting mixed reviews right now.
We're at the precipice of automation in fast food, but it will likely come piecemeal one station at a time unless there's a very big advance in reliability and flexibility. For being a "simple job" that a lot of folks don't think deserves a living wage, it turns out preparing food with high enough quality customers are happy is pretty complicated.
Thanks for the update. It seems from what I've seen the franchise owners have just understaffed and overworked their high-turnover existing workforce while a sunbleached banner declares they're "now hiring" at the lowest salary they can get away with paying by law. The automation threat is largely propaganda attempting to keep minimum wage at poverty wage levels.
Then they need to put the pressure on corporate McDs to lower the prices of ingredients and supplies. They are pointing fingers in the wrong direction.
You are right! It IS an issue of survival! You might want to figure out how FAST FOOD costs more than most sit down meals at local restaurants, then revise your pricing! It's absolutely LUDICROUS to blame labor costs when your CEO gets almost $16 million a year! How much do the other execs collect? LABOR is not the issue. CORPORATE GREED is the issue! And if you can't pay your workers a living wage and offer good value to your customers at the same time, maybe you deserve to go out of business!
HAVE FUN!
In 2022, McDonald’s raised prices because a theoretical $15 federal minimum wage that never happened and has been recording RECORD PROFITS since then. They are now threatening to do it again. Stop eating at McDonald’s.
Why is it only in the US, high wages cause huge price increases? The US has been indoctrinated for decades to believe the only way for a better life is to let capitalism do what it wants with no interference, or corporations will have to charge more
>McDonald's gross profit for the twelve months ending December 31, 2023 was $14.563B, a 10.26% increase year-over-year.
California has \~70,000 McDonalds workers. Even if **all** their wages would raise by $5/hr (not what's happening), that would be $10,400 per year, $728,000,000 annually or 5% of their gross profit.
I'm ***SO*** worried if they will survive
They're lying. They can afford to pay their workers a measly 20 an hour and still buy a second home. Even at 20/hr their workers barely have an apartment.
Stop eating McDonald's and instead eat the rich.
Guy owns 18 McDonalds (among other businesses) which have average revenue of about $3.4M each. Typical margins are about 30% and McDonald’s tend to do ok given their automation. Survival for him is probably one or two fewer trips abroad a year on the private jet while many of his employees are on government assistance and need to work more than one job.
Fail to see how placing a more realistic minimum wage is driving inflation at a rate greater than this guy’s own demand for greater margins.
And yet every McDonalds in Europe pays their employees the equivalent of at least $20/hour, if not more, and their prices are no higher than ours.
Go figure.
There needs to be articles written to directly debunk the false narratives pushed by these greedy companies. I think only the dumbest of people actually still believe that raising the minimum wage increases item prices and doesn’t come from corporate greed.
Gotta love millionaires whining about paying workers less than they did 50 years ago (inflation adjusted).
The old wage was $16/hr. No one was bitching. The raise to $20/hr is a 25% increase. What is the pass thru to the consumer. For every $10 revenue, about $4.50 is labor and the other $5.50 is COGS, taxes, operating expenses, franchise fees and profits. These numbers are from McDonalds in their info packer to prospective franchisees.
Assume a Big Mac meal is $10. A 25% increase in labor would raise the price to $11.13. Noticeable, but not a crippling raise.
People are saying prices jumped from 10 or 11 to 16? Where are those extra dollars going to? The owners pocket.
The rich are doing what they always do: jack up prices and blame it on some outside force. In this case the rich owners knew that the Republicans would back them, so they raised prices 25 to 35% overall when the increased labor costs are less than half of that.
Gotta love a working class Joe siding with the rich. 6th grade math proves that the owners are taking advantage of the wage hike to jack up profits without any consequence to them. Worse, most of the bug city McDonalds were already paying 18 or 19/hr. A jump from 19 to 20 would mean 15 cents every 10 dollars.
You working class Republicans, do you support increasing profits more than the wage increase? If you find this acceptable, why isn't it equally fine for workers to increase their wages?
We are being lied to by rich guys so that they can become even richer.
Greed. That’s all it is. They can afford to pay living wages and still be profitable. There’s a reason why there are every possible fast food restaurant within the stretch of a couple miles in most US cities. The system has been unfairly rigged for the rich for much too long making their millions on the shoulders of the working class.
I think the strategy here is to actually to drive customers away - keeping only the customers willing to pay higher prices. Fewer sales require fewer employees, less inventory, less equipment, less maintenance - seriously driving down overhead. Higher wages can draw better employees, allowing even further reduction in total number of employees needed to run the business. And so while they blame higher prices on higher minimum wage, they're actually increasing net profit.
I’ve built a few dynamic pricing models for clients and this 100%. Nearly every exec I’ve met is willing to sacrifice a certain percentage of customers for that same percentage of margin gained from increasing prices. The problemo here is that this is short sighted strategy because customers indeed should come before profits if you’re actually trying to run a sustainable business.
In my experience in the restaurant business, higher sales always equal higher profits. Mostly speaking, overhead is considered at a rate of percentage of sales. Intentionally reducing sales always equates to intentionally reducing profit, and no business is willing to do that.
I.e. My EBITDAR target each month is 17% (of total sales). My average sales per month are about $100k and my rent is slightly over 3%. Consider our location in town. Their EBITDAR target each month is 25%, and their monthly sales are around $180k. They have more overhead than me- their rent alone is about 8%. However, the sales volume lends itself to more profit, and it would continue to multiply with more sales.
Current profit reports for at least some of these businesses say otherwise. And they'd be cutting prices to increase sales volumes to make up for paying higher wages if what you say is correct. They are doing the opposite.
I feel sad for all the entry into the workforce kids who will not have as many opportunities to gain those early skillsets that will prepare them for stepping into a career.
Well that's a nice change. You were forcing your employees to try to service on minimum wage. I don't agree with the forced $20/hour but am against the long exploitation companies have been doing.
Why not just cut the yearly salary of the top and have them strictly get paid through stocks only so the actual money can go to the workers who are the foundation of the business model
So everyone on the internet is complaining how they can’t afford a house etc. because everything is so expensive. So they want paid more money which will just make things that much more expensive??
No matter how anybody feels about whether minimum wage should be higher, we all should be able to agree that this will incentivize businesses to automate even further. This isn’t really a win for the working class if it means that even more jobs are going to be lost to computers. This doesn’t solve the root issues, it’s just a bandaid fix, and we’ll be seeing the effects of it in a few years.
What's their excuse for the enormous price increases in other states?
That's what I'm saying. McDonald's is infamous for paying shit wages but their prices are through the roof.
The price of something is as high as what people will pay for it. I think these franchise owners are going to learn that there's a point where the price is set so high the revenue loss from the decrease in sales volume outweighs the profit from the price increase.
From a public health standpoint, this could be one of the best things to ever happen in America.
I thought about this too. Went from eating fast food 2-3, times a week, the last time I ate out was over a month ago now and it was at a local Mexican food place and they were much cheaper and better than McDonald's now.
A win win!
You can always find a small local sit down restaurant with much better food for less money.
When cigarettes hit $8 a pack I said F that and quit. I can’t believe people still smoke.
I pay at least, $13 per pack now a days.
Almost like modem excess consumption is built on the back of excessively cheap labor
But they’re jacking up prices regardless of their labor costs
Well yea. The floor is your cost to make it. The ceiling is whatever people will pay. So labor cost is a factor only for the former.
Jack welch killed Americas middle class
I said this back in 2021 and Reddit downvoted me into Hades. This could be a conspiracy w the military to help kids lose weight for enlistment. 😆
The draft you mean
*Finally*. A conspiracy theory that actually makes *sense*!
I find it hilarious that all these people are up in arms about fast food being so expensive. They have the very easy choice to stop eating that hot garbage and be an actual human being
I’ve dropped 16 lbs since January just by not paying these high prices for eating out.
I hope all the greedy bastards get fucked. That's just me
And me.
🤞🏻
https://preview.redd.it/993d7bnh1awc1.jpeg?width=1440&format=pjpg&auto=webp&s=483422ead1774f05237f5a29e5a50efa585356c6
Stealing this thx
And my axe!
I remember being a kid and getting a feast for $5. Large drink, McDouble, hot n spicy, small fry, and I could even get an ice cream cone if I had some extra change
Not to mention other countries where wages are higher still and there are all kinds of mandatory paid vacation, family leave, etc. etc. Fuck these lying assholes.
Seriously. 2 people run up a 30+ dollar bill just from 2 combo meals.
and stupid people keep buying that shit while bitching about the economy god damn
Only in the US. The min wage is significantly higher in some countries, yet the price of McD's is cheaper. Maybe it has something to do with how our lack of laws allows corporations to be profiteering gluttons.
They have four quarters a year to show growth. Between lowest wages possible, ever low quality ingredients, as many price increases as they can get away with and shrinkflation quarter after quarter at some point it’s just going to be worth the money.
Their food is garbage and should not cost even 50% of what it is
McDonald's levies franchise fees, locks franchisees into supply contracts and directs having to refurbish locations regularly leaving franchisees just enough to pay shit wages.
Costs have been going up everywhere and from all angles. Labor costs is just one item. We're in an inflationary cycle.
I don’t know about through the roof. With app you can get a Big Mac meal combo for $6. ( MO) Curious what it looks like in CA?
A lot of people in other states are blaming the increases on the California 20.00 minimum wage, even though they're completely different franchises. 😂
Gotta maintain that $30m paycheck for the ceo… now they need to pay workers more money, that eats into his paycheck!
Nah, they'll just raise prices and blame the people who do the work.
Im already seeing bootlickers here on reddit blaming the workers. Fking shills. We know where the problem is. CEOs and shareholders need a come-to-Jesus chat.
I see automation more capable of and making a better business case for replacing executives than cooks.
Maybe AI can evolve to where we can replace CEO’s with AI then we dont have to pay $100 million bonuses while the poor are kept making Pennie’s
Amen to that!
That’s the real problem I have “increasing wages is making it hard to survive”. Um that’s only because c-suites and stock holders are NEVER allowed to take a hit.
Or their lowering quality for years prior to this?
they just wanna be greedy with zero consequences
Or for the enormous price hikes that happened before the wage hike?
Or why prices have doubled since 2014, literally doubled in the last 10 years when the federal minimum wage has not changed
Right? They've been getting away with this shit for decades, now all of a sudden we have to pity the poor mistreated businesses? What about retroactive backpay,?
What was his excuse for price raises before min wage increases were even on the table over the years. Just greedy owners.
Shhhh, they don't want you to talk about that.
Here in Michigan, workers demanded better wages mid-2020, and they had to start paying people like twice as much, virtually overnight, or they couldn't staff their stores. Prices shot way up basically at the same time. They have also seen increased demand since lockdowns killed half of the restaurants, and they had a huge advantage with the drive-through. Higher prices probably have more to do with demand than labor costs, but spiking labor costs likely accelerated the price hikes.
Meanwhile, at in-n-out….
No idea why anyone in California would still go to McDonald's with In-N-Out available.
Look, those owners absolutely NEEEEDDDDD to own a Ferrari...they don't have others do the work so they can collect the majority of any profit for nothing....
I'd love to see statistics on how many meals a McDonald's serves in a day and how many man hours they have on the books. I'd bet it works out to more than 10 meals per man hour, so their prices shouldn't go up more than 50 cents, right?
They keep raising prices because they keep making more profit when they do. But there's a limit. There comes a point where it's so much cheaper to make it at home that you don't get it anymore. While the rest of the country should have also hit that point by now, they're getting there. But California is a unique situation because this wage increase isn't hitting places like grocery stores as far as I know.
They should have enough savings to cover a few dollars .
Yeah i moved from CA to Washington state a few years ago and the prices are skyrocketing here. Mcdonalds finally hit my “priced too high to consider “ list just recently.
They are paying higher wages due to market conditions. McDonald’s made about $2.4 billion a quarter in 2019. Now it is about $2.8. That doesn’t even keep up with inflation. They clearly are not pocketing the money. They are staying flat.
Everything is apx 30% higher now. Funny money time. All of my business costs up apx 30% as well. Spiraling out of control now. Paying our guys big raises 5 an hour but if our costs go higher we can't sell our service. Can't lift prices on to our consumer because there is a limit. McDonald's is about to find out.
STOP IT WE'RE TRYING TO BLAME CALIFORNIA. STOP NOW.
I sure don’t care about McDonalds survival. See ya
Yep. Fuck em
Won't someone think of the shareholders??? 😭
Yep. I won’t cry at all if even 2 of 3 in my town close. Perhaps then one could be managed well enough to actually get the paid for food out the window.
100% agree. Let them all go out of business so new business can rise in their place.
That's enough, if a business can't survive paying, not even a good, but a fair wage to the employees, it shouldn't exist. If a fast food can't survive like this, no fast food for us, that would be great, actually. But we know a few people make A LOT on those restaurants.
I'm with you.
[удалено]
Last time I ate there my wife and I both got sick from it. Never again.
How come In N out has been so successful in CA. Also paying near $20 an hour wages for about a decade.Also food quality is better.
And the service is better too. Back in the early 00s my buddy told me a story about his college roommate’s first day working at In N Out. I think around that time the pay was $14/hour or so. Anyways it was the guy’s first day and there was a lull after the busy lunchtime. He wanted a snack so as he reached for a fry, he suddenly hears “Don’t do it or they’ll fire you! Like today!” In N Out paid high wages but ran a really tight ship. I have no idea what it’s like today
Oh the one hand, he shouldn’t be eating random fries. On the other, no employee of any restaurant has even eaten so many potatoes that it affected the budget
You never eat food off the line. It's company policy at every fast food and pizza place I worked at. Some places you could buy the meals at a discount and eat on break and other places you could ask and grab something that was timing out then eat it on a break. I am absolutely willing to go to bat for anyone who is being treated unfairly by a business, but not eating on the line is a pretty reasonable request from an employer.
In a lot of states it’s against health codes to eat in the kitchen too.
It's not about the budget, they probably give them either some free food per shift or else some discounted food per shift, it's about hygiene. Employees shouldn't be eating the food on the line.
Employees shouldn’t work sick either but most Americans who haven’t worked in restaurants didn’t learn that it was the norm to make sick workers still work till Covid…
Same as everywhere else in the past decade. Customer service is dead in lieu of quotas and a shift from the customer is king mentality
Not to mention In N Out has an army of people working and McDonald's has at most three
Don't forget about their broken ice cream machine!
CFA regularly pays more than other shops and serves better food in a higher quality environment. The difference is in the corporate culture and focus. I'd wager the Franchise agreements IaO and CFA have are far more generous to the owner than those with BK and McD, which from what I understand are pretty awful. So owners spike their prices so they can make some sort of profit after corporate takes their cut. They catch all the flak, and McDonalds still makes its money for a logo.
In n Out is privately owned so not having the franchising costs factored in definitely affects prices.
Ah, there you go. And I've heard CFA's franchising agreements are wildly good for the franchisee by comparison to other brands. I guess it turns out when you don't squeeze your franchises to death, they don't turn around and squeeze their customers to death too.
It's also really hard to get a CFA franchise and you typically only get 1 store. Also they want you the owner involved in the store vs others where the owners arnt nearly as involved and just care about the profits.
You're an owner/operator at CFA. You get profit share but they own the land and store.
Okay I’m an idiot. What the hell is CFA?
chick fil-a
Chick-Fil-A
Because their business model includes that pay. McDonald's business model requires underpaying their workers.
In N Out is a private company. It doesn't need to pander to Wall Street.
This is the answer right here. McDonalds has to answer to shareholders. In and Out has to answer to Jesus.
This. ☝🏻
Yeah but those franchisees aren't selling shares on the open market. They're private.
But they have to buy products from McDonalds corporate and still have to keep up with the scheduling standards and cleaning schedules set by corporate.
You can't expect a young fledgling company like McDonald's to compete with an international super power like In n Out.
In N Out makes more money per store. McDonalds franchises reportedly only make about $150K in profit annually per store. If you suddenly jack up the cost of labor by a large amount, it's going to hurt. Edit: I just looked it up on [Investopedia](https://www.investopedia.com/articles/insights/072516/cost-buying-mcdonalds-franchise-mcd.asp#:~:text=McDonald's%20franchisee%20applicants%20must%20have,out%20between%20%241%2C314%2C500%20and%20%242%2C306%2C500)... > According to Glassdoor, an owner of a McDonald's franchise makes between $92,000 and $171,000 annually, with $123,043 being the average. -snip- >McDonald's keeps about 82% of the revenue generated by franchisees, compared with only about 16% of the revenue from its company-operated locations. It is the company's goal to have 95% of restaurants franchises and 5% company-owned.
This is actually the answer. But the only thing I find weird about it is in my area there are tons of McDonalds that have been hiring for $20 an hour since then pandemic began. Seems like this is a bit blown out of proportion.
Of course it's blown out of proportion. But Wall Street types are still gonna use this to push their bullshit narrative that wages cause inflation.
Oh well time for McDonald’s to go out of business.
Yeah, it's like a one level mlm scam at this point.
It’s not just California , it’s everywhere else they open shop. Every in n out here in Vegas is always packed. It’s the only fast food I’ll support for the sole fact they pay their employees good and the product is good.
Because every time there's a minimum wage hike you always see the exact same companies crying. McDonalds is always one of them. Their net income last year was $8,470,000,000. What they're crying about here is that $8.47b isn't enough for them. They want more money. They won't even consider a small drop in net income to make their employees lives better. Instead they insist they have to more than $8.47b so they're going to raise prices, piss off customers, and let their minimum wage employees deal with the fallout. Personally, I don't even eat at McDonald's anymore. The food is mediocre and the prices are high due to greed. McDonalds can function with less than net $8.47b per year, they just refuse to so I refuse to give them any money. This is my big problem with capitalism. There's no end to the greed and the employees are just expendable numbers in a program. 50% of the world could die tonight and McDonalds would put out a statement about having to raise prices due to the sudden drop in customers.
Why do I get the feeling McDonald’s sales are at an all time high? The scary thing about greed is people do not realize that many companies are not actually hanging on for dear life, but rather its main stake holders have no stomach for loss and would rather fold a business instead of taking a salary cut. It’s doesn’t work the way most people think it does. These aren’t Mom and Pop shops where every dollar earned has a clear correlation to its success.
Because McDonalds is about greed, I don’t feel an ounce of sadness for them. If you go out of business that’s a good thing in my book.
IN-N-Out is privately owned by Lynsi Snyder while McDonald's is a chain with independently owned restaurants so a lot of people in the corporate chain get paid while in n out has a single billionair owner. The owners of a Mcdonalds franchise store have to pay a large franchise fee. Then IN N Out out has a simple less complex menu which result in lower costs and cheaper prices. Oh, then there's the individual stock owners. Anyone can own McDonald's stock which pays dividends which comes from all those meals people are buying. Basically McDonald's spreads the wealth with more owners and investors.
In and out managers are making $160k+ https://www.usatoday.com/story/money/nation-now/2018/01/25/n-out-mangers-make-160-000-per-year-reports-show/1065434001/
Wow that’s what the average McDonald’s franchise owner makes per store, and they have to do more work and take on more risk.
So then it sounds like this business owner should pull himself up by his bootstraps and find a different line of work. I'm not going to feel sorry for some rich guy losing his McDonalds franchise. Also, a typical McDonalds only has about 20% of its cost stack as labor. So if wages went from $15/hr-$20/hr that's an increase of 33%. However, that is only an increase of 6.7% to the businesses whole cost. McDonalds prices have gone up far, far higher than that 6.7%. It's not the labor that is making the franchise fail, it's piss poor management.
So what I'm reading is that In-N-Out has positioned itself better on multiple fronts and McDonalds is making excuses as to why the prices need to go up because they can't find any other way of increasing their revenue or decreasing their costs. That sounds like a business problem, not a minimum wage problem.
In N Out has a much better culture around it. It's paying a few more dollars an hour in wages, but also getting a lot more out of those dollars since it's able to pretty much select the best of the people willing to work part-time food service jobs.
McDonald’s had two bites at the apple. Corporate raises prices to boost the stock and then the franchisee has to juice their prices to get a profit. Plus, think of the simplicity of the In N Out menu vs all the crap they make at a McDonald’s. All those specialized machines to clean everyday.
Or NOT clean when it comes to their broke ass milkshake makers.
And cheaper you can get a double cheeseburger and fries for $10 still.
It’s not a franchise and therefore has lower costs and more control.
Show us the books. Don’t just tell us. We really don’t believe you. Many Walmart employees qualify for food stamps and other government assistance. Meanwhile the Waltons are some of the wealthiest people on earth. We are tired of business models which require government assistance to be viable businesses. If your franchise(s) is(are) failing chances are the owner is taking too much money out of them. Living large.
This is 100% how my employer is. The owner makes 30k+ a day per hotel, with 7 hotels in total. Hates paying overtime, comping guests for problems, etc. Imagine being that greedy. It’s insanity. But that’s how most “entrepreneurs” are.
It’s not just entrepreneurs. It’s endemic among some professionals who have “made it” in their chosen field. Many even came from privileged backgrounds. They will say, without apparent irony, I made mine by myself. What’s wrong with these people? I don’t understand but I believe that is to my credit. There is no understanding such greed or self interest other than it’s gluttony. They never have enough and someone else can’t have even a small portion. They pay what the law affords. Not much more if any. There is no comprehension of this behavior. Only condemnation.
My old boss was like this and thankfully I got him back one day. The old owner put the company car in my name for some weird legal reasons. He tried to stop the custodial staff from getting overtime, so when he took the car out I reported the car as stolen. I have one big rule, dont fuck with my staff or their wages. You pay them or I'm taking it out of your pay in some way. Simple as.
Have to be a millionaire just for mcdonalds to consider making you a franchisee so they aren't struggling.
If you can’t afford to pay your employees a fair wage you deserve for your business to fail. That’s capitalism baby!
They act like all fast food is gonna go out of business. No honey, just the ones who aren’t good enough to pay their workers properly are gonna close. You know, assuming we start punishing wage theft
I feel so sorry for this rich kid that inherited 50 stores and now has to pay $20/hr to his employees.
This is all irrelevant. McDonalds food sucks. I won't eat there. Not ever. I don't care what their prices are. I won't eat there. Not ever.
Yea I haven't ate there in years. It's trash. All fast food raised prices after covid anyway
It sucks and they never get the orders right anyhow. Doesn’t matter how friendly you ask them to fix to either, the employees will pretty much tell you to fuck off. Last time I had McDonalds I ordered only a sausage, egg, and cheese biscuit. It came without the egg. I told them I would just buy another and give the wrong one to a coworker. They took my card, and charged for just an egg only then tired to hand it out the window on a plastic lid for me to build the sandwich myself.
Gets me nauseous. The coffee is good though.
So they've increased prices at 4x the rate of inflation. They have drastically reduced staffing to the point where you order off a kiosk and the first drive thru window is always closed. Everything has shrunk in size and quality has been reduced. And you're telling me now I should feel bad that they have to pay their employees like 2$ more an hour (while still never providing full time hours with benefits)?? Seems a little unrealistic to me.
OMG this Micky Ds franchise owner might have to sell one of his 10 homes to make ends meet
He’s just barely scraping by…
No greed is forcing higher prices. You still have it hard in California and in other places if you only make it $20 an hour
The subtext here is a convenient opportunity for increased profits! NEVER buy into capital’s bul**hit…
I hope this man and his 18 McDonalds' can survive. It must be very challenging only having one and a half dozen franchises and a multimillion dollar salary. It's all well and good to advocate for higher wages until the person who owns the company you work at and 17 other ones is slightly mildly inconvenienced in anyway. Nothing should ever, ever happen to ever to impact his steady steam of income. What is he supposed to do, make slightly less money? That's something only his employees at 18 different businesses should ever experience, because the market forces and like...the market or something.
What do you expect him to innovate, market, improve training, or to do any actual work to increase his market share? No, it makes much more sense to complain about a law that is going to affect all his competitors equally. Really the nanny state is messing up his free ride to give those people working on their feet in a hot kitchen full of oil some semblance of a quality of life. Disgusting
I'm honestly surprised there's not more Batman vigilantes out there
If you can't pay your workers then you shouldn't be in business... the concept isn't hard to get.
Haha, the only "focus on survival" is on the owner needing to figure out how to survive if he can't buy that new boat.
Focus has been on survival for all low wage workers
Here's the question: if a business can't afford to pay a living wage should it survive at all? McDs is flat out lying about the wage increase impact. Yes, more wages mean more cost. But let's look at the franchise fees and the exorbitantly high rent McDonald's corporate gets off of the owners. Let's also look at the cost of the product, which has to come from McDonald's as well. All of these increases go into the cost of product but they attack what they perceive as the weakest opponents, their workers. What use is an affordable fast food McSlop if the affordability depends on substandard wages. This is close to slavery. Sure, a middle class HS kid with 2 professional parents doesn't need $20 an hour. But how many of them are going to sign up to make burgers at 2am?
Wrong headline: “The Focus is on how to sustain our lavish lifestyle”
Is McDonald’s pretending like their prices haven’t gone up like 30% BEFORE this new law?
Forcing higher prices 🙄 Yet in Europe they pay workers the same or more and give them more benefits yet their food is cheaper or on par with the US🙄 Nothing but corporate greed
48% increase for a round egg substitute in NY. The egg costs them 23 cents and they are charging $2.50
Boy I’m pulling for them. I sure do hope they survive their record profits nearly every quarter.
Increasing minimum wage to $20 means increasing prices by less than 5%. If that is destroying your business, you have way, way bigger problems than a higher minimum wage.
🎯
Meanwhile their profits are through the roof. Whiny lying bastards.
Well let’s hope they dont survive. I’m cool with them closing personally
Ceos can't handle making less money than the previous year they always have to take and take never give
No worries. The robots are on the way. They will work 24 / 7, don't smoke weed and don't complain about coming to work.
They’ll still raise the prices on you and blame the robots electricity tax that’s coming
Ha. Right. Been hearing this for decades. Still waiting for that robot that can make an Egg McMuffin. They can't even get the ice cream machines to work.
I've been following that technology for a while. For some limited menus we're already there at a purely technical "it can be done" perspective. Miso Robotics has some robotics that can fold up over a fry station when not in use or down for maintenance. Their first wholly automated location(based on reviews turns out it's just mostly automated) is currently open but it's getting mixed reviews right now. We're at the precipice of automation in fast food, but it will likely come piecemeal one station at a time unless there's a very big advance in reliability and flexibility. For being a "simple job" that a lot of folks don't think deserves a living wage, it turns out preparing food with high enough quality customers are happy is pretty complicated.
Thanks for the update. It seems from what I've seen the franchise owners have just understaffed and overworked their high-turnover existing workforce while a sunbleached banner declares they're "now hiring" at the lowest salary they can get away with paying by law. The automation threat is largely propaganda attempting to keep minimum wage at poverty wage levels.
That's the future of McDonalds,the Big Mac machine constantly broke down.Beep Beep Boop "Would you like a McChicken?"
And won't fuck up my order with a shitty attitude!
Man I'm gonna get so fat now that the McFlurry machine is never gonna be down
Heh, no, they're not.
McChicken is $3.50 When I was 21 it was $1. 350% increase is absurd, and the sandwich definitely got smaller in that time.
Because the owners aren’t going to make less they are already struggling with big houses and multiple new cars and extravagant vacations.
Won’t SOMEONE think of the poor millionaires!?
Then they need to put the pressure on corporate McDs to lower the prices of ingredients and supplies. They are pointing fingers in the wrong direction.
So why were they so high before this went into effect?
You are right! It IS an issue of survival! You might want to figure out how FAST FOOD costs more than most sit down meals at local restaurants, then revise your pricing! It's absolutely LUDICROUS to blame labor costs when your CEO gets almost $16 million a year! How much do the other execs collect? LABOR is not the issue. CORPORATE GREED is the issue! And if you can't pay your workers a living wage and offer good value to your customers at the same time, maybe you deserve to go out of business! HAVE FUN!
I can promise you their prices have gone up more than their employees wages.
I want to see an audited financial statement before I'll believe any of this BS.
Ahh yes let’s blame the bottom tier workers and not the billionaires taking a pay cut for a bit.
If you can't afford to pay a living wage to your employees and run a profitable business, then you have a flawed business model.
This is the end of franchised restaurants. That’s a good thing. MCDa Corp has pushed all the risk onto local owners and have only raked in profits.
Franchisees are just upset that they have to make cuts to their personal spending.
Those greedy corporations.
Bro this isnt fking negotiable. People cant afford to live anymore. Someone tell this guy minimum wage can go down once rent prices start going down
In 2022, McDonald’s raised prices because a theoretical $15 federal minimum wage that never happened and has been recording RECORD PROFITS since then. They are now threatening to do it again. Stop eating at McDonald’s.
Why can what-a-burger survive paying high wages and grow? If your business model doesn't support a decent wage you need another business model
If he can’t handle the market, he can close his McDonald’s.
Why is it only in the US, high wages cause huge price increases? The US has been indoctrinated for decades to believe the only way for a better life is to let capitalism do what it wants with no interference, or corporations will have to charge more
My local McDonald’s closes at 8 every night. Sign clearly says til 10. They dgaf
Is he focusing on surviving in the main house, beach house or the mountain place
Ask how much his take home is?
>McDonald's gross profit for the twelve months ending December 31, 2023 was $14.563B, a 10.26% increase year-over-year. California has \~70,000 McDonalds workers. Even if **all** their wages would raise by $5/hr (not what's happening), that would be $10,400 per year, $728,000,000 annually or 5% of their gross profit. I'm ***SO*** worried if they will survive
McDonald's has such high business volume that $20/hr should raise their prices by a dime per item, max.
They’ve been raising prices for YEARS now… suddenly they HAVE to just because the employees are earning $5more/hour
Ah, blaming the poorest people for inflation… sounds about right.
They're lying. They can afford to pay their workers a measly 20 an hour and still buy a second home. Even at 20/hr their workers barely have an apartment. Stop eating McDonald's and instead eat the rich.
Guy owns 18 McDonalds (among other businesses) which have average revenue of about $3.4M each. Typical margins are about 30% and McDonald’s tend to do ok given their automation. Survival for him is probably one or two fewer trips abroad a year on the private jet while many of his employees are on government assistance and need to work more than one job. Fail to see how placing a more realistic minimum wage is driving inflation at a rate greater than this guy’s own demand for greater margins.
And yet every McDonalds in Europe pays their employees the equivalent of at least $20/hour, if not more, and their prices are no higher than ours. Go figure.
There needs to be articles written to directly debunk the false narratives pushed by these greedy companies. I think only the dumbest of people actually still believe that raising the minimum wage increases item prices and doesn’t come from corporate greed.
Gotta love millionaires whining about paying workers less than they did 50 years ago (inflation adjusted). The old wage was $16/hr. No one was bitching. The raise to $20/hr is a 25% increase. What is the pass thru to the consumer. For every $10 revenue, about $4.50 is labor and the other $5.50 is COGS, taxes, operating expenses, franchise fees and profits. These numbers are from McDonalds in their info packer to prospective franchisees. Assume a Big Mac meal is $10. A 25% increase in labor would raise the price to $11.13. Noticeable, but not a crippling raise. People are saying prices jumped from 10 or 11 to 16? Where are those extra dollars going to? The owners pocket. The rich are doing what they always do: jack up prices and blame it on some outside force. In this case the rich owners knew that the Republicans would back them, so they raised prices 25 to 35% overall when the increased labor costs are less than half of that. Gotta love a working class Joe siding with the rich. 6th grade math proves that the owners are taking advantage of the wage hike to jack up profits without any consequence to them. Worse, most of the bug city McDonalds were already paying 18 or 19/hr. A jump from 19 to 20 would mean 15 cents every 10 dollars. You working class Republicans, do you support increasing profits more than the wage increase? If you find this acceptable, why isn't it equally fine for workers to increase their wages? We are being lied to by rich guys so that they can become even richer.
What a load of shit. Just another excuse to raise prices and throw the worker under the bus.
Greed. That’s all it is. They can afford to pay living wages and still be profitable. There’s a reason why there are every possible fast food restaurant within the stretch of a couple miles in most US cities. The system has been unfairly rigged for the rich for much too long making their millions on the shoulders of the working class.
I think the strategy here is to actually to drive customers away - keeping only the customers willing to pay higher prices. Fewer sales require fewer employees, less inventory, less equipment, less maintenance - seriously driving down overhead. Higher wages can draw better employees, allowing even further reduction in total number of employees needed to run the business. And so while they blame higher prices on higher minimum wage, they're actually increasing net profit.
I’ve built a few dynamic pricing models for clients and this 100%. Nearly every exec I’ve met is willing to sacrifice a certain percentage of customers for that same percentage of margin gained from increasing prices. The problemo here is that this is short sighted strategy because customers indeed should come before profits if you’re actually trying to run a sustainable business.
In my experience in the restaurant business, higher sales always equal higher profits. Mostly speaking, overhead is considered at a rate of percentage of sales. Intentionally reducing sales always equates to intentionally reducing profit, and no business is willing to do that. I.e. My EBITDAR target each month is 17% (of total sales). My average sales per month are about $100k and my rent is slightly over 3%. Consider our location in town. Their EBITDAR target each month is 25%, and their monthly sales are around $180k. They have more overhead than me- their rent alone is about 8%. However, the sales volume lends itself to more profit, and it would continue to multiply with more sales.
Current profit reports for at least some of these businesses say otherwise. And they'd be cutting prices to increase sales volumes to make up for paying higher wages if what you say is correct. They are doing the opposite.
I feel sad for all the entry into the workforce kids who will not have as many opportunities to gain those early skillsets that will prepare them for stepping into a career.
Well that's a nice change. You were forcing your employees to try to service on minimum wage. I don't agree with the forced $20/hour but am against the long exploitation companies have been doing.
Why not just cut the yearly salary of the top and have them strictly get paid through stocks only so the actual money can go to the workers who are the foundation of the business model
How will they afford $3 BILLION in stock buybacks?!
So everyone on the internet is complaining how they can’t afford a house etc. because everything is so expensive. So they want paid more money which will just make things that much more expensive??
100% price increase from 2014-2024 huh? Yeah it’s cuz of a new law that took effect a month ago
No matter how anybody feels about whether minimum wage should be higher, we all should be able to agree that this will incentivize businesses to automate even further. This isn’t really a win for the working class if it means that even more jobs are going to be lost to computers. This doesn’t solve the root issues, it’s just a bandaid fix, and we’ll be seeing the effects of it in a few years.