WTF Is Happening To Fast Food

[00:00:00]According to Lending Tree, 62% of Americans are eating less fast food as menu prices have increased by roughly 60% over the last decade, with McDonald's alone doubling their prices.

[00:00:10]And with fast food prices far exceeding the rate of inflation, roughly 80% of Americans now view it as a luxury, raising the question, how did the cheapest meals in the country become just another way to fatten shareholders pockets? While fast food was originally intended to be a quick and affordable alternative for the working class, with McDonald's famously celebrating that a family of four could be served in under a minute for less than a dollar. Decades of extreme consolidation have left many of today's largest chains charging roughly $40 to feed the average family.

[00:00:40]As the industry has fundamentally shifted away from serving customers and towards extracting as much profit as possible from each meal, one of the largest mechanisms behind this consolidation is franchising. As franchise chains now capture roughly 75% of fast food revenue despite operating substantially fewer locations than mom and pop independents. The adoption of this model accelerated after McDonald's unprecedented expansion throughout the 50s and 60s demonstrated how every new location could generate rent reoccurring royalties and franchise fees while shifting most of the cost and operating risk onto the franchisee. creating a financial model that nearly every established chain would eventually adopt as it provided the scale needed to outspend competitors, dominate advertising, secure the most valuable real estate, demand enormous volumes of food at prices smaller operators can never negotiate, and offset declining sales in one market through revenue generated across thousands of global locations. Meaning that instead of local hamburger stands and sandwich shops competing for customers through lower prices and better value, more than 14,000 McDonald's, 7,000 Burger Kings, 6,000 Wendy's, and thousands of Subways, Jersey Mike's, and Jimmy John locations now shape what Americans expect to pay across entire categories of fast food.

[00:01:53]Today, among the 20 largest fast food chains in America, just two were founded within the last 50 years, with not a single one founded in the 21st century.

[00:02:02]And even across the nation's 500 largest restaurant chains, these same 10 dominant fast food brands account for roughly 44% of all sales. And after using their scale to essentially eliminate local competition, fast food chains have turned towards loyalty programs designed to disguise higher prices as a great deal. A 2025 analysis found that the top 20% of loyalty users generate roughly 55 to 70% of loyalty revenue, spending two to three times more than the average customer. as every purchase becomes one step closer towards a free reward. In Q1 of 2026, Starbucks announced that reward members generate nearly 60% of all US company operated revenue, even though earning a free drink or breakfast item can require nearly $200 in purchases. Even McDonald's CEO has acknowledged that loyalty adoption increases both customer visits and spending, effectively proving that the value these chains now provide has essentially nothing to do with quick and affordable food and everything to do with making customers pay more for the perception of it. And while these chains have somewhat effectively manufactured the illusion of affordability, their market control also allows them to sell substantially lower quality food. Before rampant consolidation, fast food chains relied far more heavily on regional produce, beef, and dairy suppliers, allowing them to compete through freshness and stronger relationships with the communities they served. Today, however, going out to eat is essentially just figuring out which chain can heat up Cisco food better. While the largest chains negotiate more directly with an already consolidated meat processing industry, most major fast food brands rely on Cisco, US Foods, or Performance Food Group, where yet again, despite thousands of independent distributors still existing, these three corporations alone control roughly 35% of the food service distribution market, while the fifth largest controls only around 1%.

[00:03:55]And because these distributors make more money by purchasing enormous volumes of standardized products that can be sold across thousands of locations, they gain immense influence over what chains pay and which ingredients become financially practical to serve at scale. often favoring products designed around consistent margins rather than freshness or regional quality, leaving much of the industry dependent on frozen, pre-portioned, and heavily processed products designed for longer shelf lives, requiring less labor to prepare, and tasting somewhat the same across thousands of locations. ultimately leaving customers to pay record prices for little more than the chain's branding while receiving the exact same nationally or even globally sourced mystery food engineered to feed the bottom line. And as if the industry were not already consolidated enough, private equity has spent decades absorbing many of the same legacy brands that franchising made nearly impossible to compete with. Roar Capital's restaurant portfolio now includes Subway, Carl's Jr., Hardies, Culver's and the parent companies behind Duncan, Arby's, Sonic, Jimmy John's, Buffalo Wild Wings, BaskinRobins, Cinnabon, and several other major chains. And then Blackstone recently acquired a majority stake in Jersey Mike's through a deal reportedly valued at roughly $8 billion. Blackstone has openly described franchise businesses as attractive investments because of their scalability, low capital requirements, and steady cash flow growth, allowing private equity firms to acquire established chains, place much of the acquisition debt onto the business itself, and extract returns through fees, dividends, or an eventual sale.

[00:05:29]turning brands built over decades into financial assets where the strongest financial incentives no longer come from providing affordable food, but from raising fees, cutting labor, shrinking portions, and replacing ingredients to increase returns. Proving that at this point, deciding which fast food chain to eat at is really just which private equity portfolio you would like to feed.

[00:05:49]And while the industry continues brushing all of this under the rug by insisting that rising food costs and broader economic conditions are the sole reason behind increased menu prices, those pressures do not make charging higher prices, serving lower quality food, or extracting more from workers unavoidable parts of operating a successful fast food chain. To demonstrate that, I spoke with Kathy Terry, the co-founder of Pete Tererry's, an Austinbased hamburger chain now celebrating its 21st anniversary with 37 company-owned and operated locations and more than 1,800 employees, where she explains why so many independent chains eventually sell to private equity, and why Peter's instead chose to establish an employee ownership trust and profit sharing model designed to always give back to the customers and workers responsible for its success. The issue is there's a lot of people that start a business and then they take on investors, right? They take on venture capitalists. Well, venture capitalists want their money back, right? And so, they'll infuse you with a lot of capital to expand, but there's there's a cost with that growth, right? Then all of a sudden, you have to make choices that not necessarily you would have made before, right? And it it really may affect your culture because you're making decisions to grow faster than you normally would or your culture would allow you to grow, right? But you're having to grow because they're an investor. They're a partner now, right?

[00:07:16]And so they're kind of driving driving the train and usually they want out in five to seven years. So they want to expand and build it up and build this asset so they can sell it to the next person. And and you know, and then you get private equity. And private equity, you know, I'm sure I have a lot of friends that work in private equity, but you know, private equity, they really just want to take your asset and they want to just, you know, dump a bunch of debt on it and and they want out in seven years, right? Like it's all about making money for their fund, making money for their investors, right? So, they don't I'm not sure they necessarily care about the culture really. I mean, they'll say it um and they might in their heart believe it, but they're also I mean, you know, I I would question what the intention is. So, an employee ownership trust is something fairly new.

[00:08:08]It came from the UK. They've done it a long time in the UK. It's fairly new in the US, but it's basically a trust that is set up for the benefit of the employees, but they don't really retain the shares. They don't hold the shares.

[00:08:19]It sits in a trust. But what it does and the wonderful thing about it is it protects the culture forever for perpetuity. So basically it's a it's a tool that allows Patrick and I to shares but also share sales I mean allow us to sell shares to the trust. So it allows us to get some equity out. Um, but the the actual document itself, the purpose of the trust is to make sure that we always sell high-quality burgers at affordable price, that we always take care of the employee, that we'll always have interest free loans, profit sharing, that we will take give back to the customer, and that protects it for perpetuity, right? And so when another CEO comes on, right, when Patrick Gars and another CEO comes in, that stewardship committee goes to them and says, "Oh, no, no, no, no. you you can't sell frozen French fries, you can't take away our profit sharing, you can't you know what I mean? Like so it protects the culture. So it's like a total win.

[00:09:19]But the other thing but the thing that we need that we really wanted to do was have a financial benefit for the employees. So that's why we we added the profit sharing cuz the profit sharing is what's the most exciting thing um especially for the employees like you know the trusts are like yeah I kind of understand it don't understand it but I think they understand the profit sharing or they really will understand it come you know February when they start getting a check >> so it allows us to you know give you know let the employees who built Peter's benefit from Peter's and I'm hoping especially when it's at 20% % it will be substantial.

[00:09:57]>> Yeah.

[00:09:57]>> I mean it will, you know, help, you know, definitely buy a car. It'll help them put a down payment on a house.

[00:10:04]It'll help them put their kids through school. It it will be substantial. And while companies such as Peter's prove that a fast food business can support profit sharing, substantially higher wages, interest free employee loans, Christmas bonuses, and even a birthday cake for every worker, all while serving locally sourced food at or below industry prices. Many of the largest fast food chains continue blaming rising menu prices and declining quality on the workers asking for wages that keep up with the cost of living. Despite today's minimum wage worker earning nearly 50% less in inflationadjusted wages than a minimum wage worker did in 1968, fast food giants such as McDonald's continue presenting wages as a leading driver of higher prices, even after raising menu prices by more than 100% over the last decade and spending roughly $2 billion on stock buybacks in 2025. Meanwhile, Starbucks blamed wage pressures for higher prices while awarding its CEO a compensation package worth roughly $96 million after only 4 months on the job. The company also provided him with private jet travel for both business and personal use and paid for his housing in Seattle after he chose not to relocate from California, proving that the industry can always find billions of dollars for shareholders and executives, but somehow treat workers asking for enough to afford rent as the greatest threat to affordability.

[00:11:32]>> When I first started, um, anybody that knew me, I was super super shy. I wouldn't have tried anything new, you know. Um, I gained a lot of confidence working here. Um, it it was really nice to be able to grow within the company within these past 10 years. Um, just starting as a crew member and then becoming a shift fleet and uh, joining the training team and getting to train like 10 people at a time. It really helped me gain confidence and uh just knowing that they like would give me opportunities to grow like that as from 17 to now. It was it's just been truly a blessing. Like I I'm really appreciative of everything that they've done.

[00:12:16]>> And so what I hope that we're beginning to recognize is that maybe beyond like job search platforms, the fast food industry is as greedy as it possibly gets. There is absolutely no reason why fast food companies cannot give us as affordable meals as possible, cannot pay their uh employees fair wages. There's absolutely no reason why we can't get the food in a relatively decent time.

[00:12:43]And more importantly, there's absolutely no reason why the food that we receive, even though it is more on the affordable side of things, isn't decent quality.

[00:12:52]Like I think that if you recognize the fact that your grandparent was able to receive a cheaper meal by people that were paid more in a far quicker time and it was healthier, not the most healthy thing ever, but healthier than what it is that we're receiving now, I don't understand why not every single one of us isn't stopping uh hasn't boycotted or hasn't stopped going to fast food. Like the stat says, 62% of Americans are eating less fast food isn't stopped. So that means that the majority of us are still going at least once or twice a week, probably more.

[00:13:35]And so, you know, I personally do not eat fast food um other than Peter's, but I I don't I've I've only been to McDonald's maybe twice in my life. I will say uh beyond thinking that sandwiches are like nutritionally kind of one of the it doesn't make sense to me. I don't think that you're really getting any value out of a sandwich. I do kind of like Jersey Mike's. But when I found out that uh Jersey Mike's was being acquired by Blackstone, I said I'm never going to eat there again ever.

[00:14:07]Ever. So something that I like I'm saying it's not going to happen because I do not support Blackstone.

[00:14:14]I am not going to pay with my hard-earned dollar. I work very hard for my money. I'm not going to give you my hard-earned dollar and consume greed in return.

[00:14:25]And I think that it's really important that we understand that one, we have so much more power than we may recognize, but also you work very hard for your money.

[00:14:36]And so something that I have mentioned in so many videos about so many different topics, but specifically about the fast food video I did over a year ago and then the restaurant video I did um was that we need to be doing consumer boycots. Like we need to be doing it for so many different things, but most importantly, we need to be doing this.

[00:14:54]Like I do not see the incentive anymore in any regard unless you're in like a fast food de desert and you're starving of why any of us are eating fast food.

[00:15:05]They cannot continue to keep getting away with this if we are buying food from them. It's as simple as that. Now, the unfortunate reality is the economy as a whole is quickly escalating further into this K-shaped economy to where there will be a point where our consumer economy will only depend on the top 10% of Americans. And so, when that point comes, then the majority of us consumers become economically irrelevant. And I don't know, I think it becomes harder for our our dollar to really have a a voting power, but that time hasn't happened yet. And so what we really have to be doing is we have to be thinking, what are ways that I can begin voting with my hard-earned dollar and getting as many people as I can together to do a consumer boycott. Like, imagine the difference that that would make. Imagine how concerned McDonald's and Burger King and Arby's or Wendy's or whatever these companies are if we all decided to actually get together and stop purchasing their products because, you know, I it's the it's the most financially sound business decision to be able to offer.

[00:16:18]Just think about it from a marketing standpoint. If you found out that a customer or that a company was paying their worker substantially above uh industry standard, you were able to get an affordable product in return and it was pretty decent quality and like it was clean and people were nice.

[00:16:37]It's a no-brainer. They would be so busy, like unbelievably busy and they know this, but they know that they don't really have to do that. like we're not demanding it from them, you know. And I I just want to do a message for all the people out there that are I get hit with it so much that are so anti-minimum wage. Um, you know, you are not paid to be these companies accountant. You're not on the payroll.

[00:17:07]So, I I don't understand why you're defending a corporation.

[00:17:14]Like, I think that this AI race has clearly shown that we need to be human first.

[00:17:20]So I don't understand that why whenever it comes to paying people fairly, we never seem to be human first. The reason why we're in this issue broadly speaking and basically every sort of industry you can think of is because we've been corporation first. We've been billionaire first. We haven't been human first.

[00:17:41]And I can guarantee you, Jeff Bezos, Elon Musk, McDonald's, Amazon, whatever you you can think of, they're not going to all of a sudden say, "Let's be human first." That comes from us. So, we have to decide within our own lives, what are the steps that we're going to do to be able to make a difference to pave the path to a better tomorrow. How do we support the companies that are actively doing that? And how do we have hope that it's going to work? like those are the two things that you have to do. Um, but I also want to take this time to be able to just kind of discuss other local companies that or or local institutions that have really been able to kind of help support me and that I feel like I always want to uh to be able to contribute because again I think that we need to stop talking about all of the companies that are doing bad and begin promoting the ones that are doing good.

[00:18:30]Um, obviously Pet Terry's after every one of my videos, uh, I like to go there and I I celebrate as soon as I publish it. Um, when I hit a,000 subscribers, when I hit 100,000 subscribers, 200,000, it would have been 300 if I was here in Austin, uh, is I go to Peter's like a a simple $15 meal, $10 meal. I eat quite a bit, but uh, you know, to me that that is worth celebration. Another place for me personally is Monkey Sea Monkey Do.

[00:19:00]Like if you're an action figure collector here on South Lamar, it is the it is amazing. They have been unbelievably supportive for me on my journey here on YouTube. I've been going there for years. Um but you know, I still have my plaque in the box. So that kind of shows you like I guess what drives me here on the channel, but for every 10,000 subscribers I get, I go to Monkey Se Monkey Do and I get an action figure. And so I have them all over my desk. I have them on the bookshelf. I have them in my apartment. Uh that's a way for me to really kind of see that like you know the the little boy that wanted so badly to make a difference um you know he's able to do it. And you know my childhood through all the different things that happened there was never a time that an action figure wasn't in my hand. And so to me it kind of is like you know while I'm getting hard on myself and stuff I can still see like the the protector.

[00:19:58]Monkey see monkey do is an amazing place. I also want to show like I have a massive veteran community and it was made very apparent from my last video but uh I really want to talk about major talent. So major talent is a resource for veterans and military spouses that provides resume development, interview preparation and feedback, job placement and employer connections and marketplace opportunities. I actually got in contact with Tim, a former veteran and the founder of Major Talent through the Veterans Day documentary I did on my Patreon. And after talking with him and many of the other veterans here on the channel and and through that that uh documentary that I did, it's been made a ve uh very apparent that it is very difficult to be able to like integrate back into society and also have the community of individuals that like understand what it is that you went through. So, Major Talent is a fantastic resource for you to not only find employment that can actually give you a job that matches the the values and the skills that you've developed, but it's also a way to develop a community. And uh you know, here on the channel, that's something that I consistently stress.

[00:21:04]So, I really just kind of wanted to to discuss those things. And um you know, I I think it's really important that in your own life, think about all of the companies that are doing good. You know, like another one here in in Texas would be HB or, you know, even Costco. Like I think Costco is a pretty great example.

[00:21:20]So, let's find ways that we can highlight and support them. Let's find ways that for the entrepreneurs that are watching this video, what are things that we can develop and we can build as a path to a better tomorrow? And how as an overall collection of individuals, can we vote better with our dollar, lead by example, and more importantly, have hope for a better tomorrow? Cuz that's what it is that we're going to have to have. and hopefully with the scale of us then we can fight back with the scale of the the consolidation that's impacted every industry. So I really hope that this was able to provide some value to you. Um I greatly appreciate your time and support as always. I'd greatly appreciate it if you would check to see if you've subscribed and if you haven't already done so to go ahead and do that that if you would want to be a part of the the part of the channel. I would greatly appreciate that and like the video if you haven't already done so. So thank you all so much. I really hope that this was able to give you maybe a little bit more hope than when you you started the video.