In the food service industry, you would think labor costs would rank the highest on our list of financial worries, and yet food costs can rise unexpectedly and without much warning. That’s what we’re facing right now in the U.S. as droughts and other issues drive up the costs of various commodities. I recently had the chance to speak with the Wall Street Journal (subscription required) about how the rising cost of food is impacting our Fatburger franchises nationwide.
Fatburger North America Inc., which has 150 restaurants globally, likely will increase its burger prices by 5% next month to reflect higher beef costs. The prices will stay up for a year and come down in the middle of next year when supply catches up with demand.”
In case you are unable to view the entire article at the WSJ, I’ve provided a clip, below. While everyone will feel the pinch of higher food costs, including American families shopping at the grocery store, but fast food and fast casual franchisees will have to decide whether to absorb these costs, or far more likely, whether they will pass them onto consumers.