Take a look at publicly traded companies post pandemic to see this effect.
Take McDonalds for an example, they are running around 30% margins and you see on social media customers complaining about prices.
Why don't those customers seek an alternative business?
The rest of them also follow pricing "best practices" so you have no where to run to.
Yum Brands is at ~20% profit margins, Shake Shack is at 3% or less profit margins, and QSR is at 10% to 15% profit margins.
There must be a reason McDonalds earns so much more. As far as I understand, McDonald’s has a significant real estate component to its business (which is technically selling its brand/real estate to franchisors, not selling food), bolstered by its very strong brand with loyal customers (that the others don’t).
https://www.mashed.com/178309/how-much-mcdonalds-franchise-o...
> The cost of running a business, especially a restaurant, can really eat into its profits. At the end of the day, McDonald's only keeps around 16 percent of the revenue its company-owned stores make, but it keeps 82 percent of the revenue franchisees pay out to it.
That’s what excellence looks like. I think chik-fil-a has similar net margins. QSR is more typical for their industry. I think Starbucks is down around 10-12% net margins too.
20% used to be considered a high margin business, like luxury vehicles. That's a shockingly high margin in food.
Because the margin isn’t in food. It’s in franchising (selling a platform and brand) and real estate.