With restaurant sales down, Burger King, McDonald's, and Wendy's are all responding to price-weary consumers with value menus.Franchisees say the new promotions bring relief to inflation-squeezed customers, though margins may shrink if they aren't able to lure customers into the purchase of additional ticket items or gain market share on competitors.
Scott Rodrick, who owns 18 McDonald's in Northern California, recently told CNBC it's been"quite a rollercoaster" since the new minimum wage went into effect on April 1."The impact of this inflation on the customer is the most clear and present concern I have as a franchisee today," he said."It has impacted margins."
He is trying to throw a lifeline to customers in other ways too, using the latitude and independence he has as a franchise owner. "We make less margin than we normally make. But we don't lose money," Dhanani said. "They are coming in less; we want people to come in more; everyone is feeling the traffic slow down," he said.
"Because of inflation, wages, and insurance going up, we have to raise our prices accordingly to stay in business. When we pass it on, a lot of consumers get a sticker shock," Dhanani said.