Case Study:
Went by a burger king today, viewed their order menu. Whopper meal, fries and soda about $9. But wait I viewed a value meal consisting of 2 whoppers, 2 fries and 2 drinks for $6. How could that be?
I started thinking on the $9 meal their cost is probably $2 but then you add in expenses. Employees, utilities, rent or if it's not run by a franchisee their acquisition costs of land, permits, impact fees, development costs etc.
At $9 dollars I see a profit and a future
At the 2 for $6 not really much profits, maybe a break even. They are hoping for additional ancillary sales like milk shakes, pastries, ice cream or what ever they have to pull that tickets dollar amount up.
But heck now you throw on employees at $20-25 per hour it is truly a challenging time for all quick serve restaurants