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The labor shortage in the restaurant industry is a familiar issue by now, but the long term implications of it may be more widespread than anticipated. According to the latest available job report from May, there are still <a href="https://www.qsrmagazine.com/employee-management/inside-restaurant-industrys-critical-labor-shortage?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">1.5 million</a> job openings in the food and beverage sector, leaving restaurants scrambling to serve the record number of customers returning to dining out post-pandemic.<h4>Why Restaurant Workers Aren’t Returning to Work</h4>Many members of the public and employers assume that restaurant workers aren’t returning to work because they can make more money staying at home with unemployment benefits. While that is partially true, there are many other reasons as well that point to a larger shift in the industry’s culture and expectations.Snagajob released the top reasons why hourly workers are not actively looking for work in its <a href="https://www.snagajob.com/blog/employers/c/summer-hiring-report?x=lShoXb&utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">2021 Summer Hiring Report</a>:<ul><li>Want to work but unable due to family obligations (like taking care of children) or schedule: 38%</li><li>Burn out from long-term unemployment: 33%</li><li>Want to work but waiting for more people to be vaccinated: 16%</li><li>No jobs that fill their skill set: 12%</li><li>Waiting for unemployment benefits to expire: 4%</li></ul>In addition to these factors, many people are trying to find more flexible and satisfying work than they had previously, which means&nbsp;the labor shortage may not entirely go away once unemployment benefits expire.&nbsp;According to a <a href="https://www.qsrmagazine.com/employee-management/higher-wages-higher-menu-prices-realities-post-covid-restaurant-world?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">survey</a> from BTIG Analyst Peter Saleh of 300 unemployed people from the restaurant, manufacturing and transportation industries, 45%&nbsp; were waiting to return to work to try and seek out something with more flexibility. 18% were interested in pursuing the gig economy now that remote and online work is so readily available. Only 3% of them said they were making enough on unemployment to stay out of the workforce.<h4>What This Means for the Restaurant Industry Long Term</h4>The pandemic undoubtedly served as a bit of a wake up call for the restaurant industry. It’s <a href="https://www.washingtonpost.com/opinions/2021/05/31/those-300-pandemic-checks-arent-only-reason-restaurant-employees-might-not-want-go-back-work/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">dawned on many workers and employers</a> that the way these businesses are structured may not be sustainable, leading to calls for higher wages and better benefits. While some restaurants are implementing these changes, they aren’t without their consequences.An increase in wages needs to be <a href="https://www.nrn.com/news/chipotle-raised-its-menu-prices-offset-higher-minimum-wages?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">offset</a> somewhere, likely with an increase in menu prices and supplies. This will obviously impact the customer, driving up the overall cost of dining out. According to the BTIG survey, experts are worried these increases will cause consumers to abandon dining out altogether because they simply can’t afford it, but it seems the industry is still far away from that reality.<a href="https://www.chipotle.com/?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">Chipotle</a>, for example, is raising its average hourly pay to <a href="https://1851franchise.com/chipotle-raises-minimum-wage-to-15-ahead-of-20000-job-hiring-surge-2715694#stories">$15</a> an hour, a 15% increase from its previous $13 an hour rate. It also announced it will increase its menu prices 3.5 - 4% to offset the wage hike. <a href="https://www.mcdonalds.com/us/en-us/about-us/franchising/franchising-faq.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084#:~:text=The%20total%20investment%20necessary%20to,be%20paid%20to%20the%20franchisor." target="_blank" rel="nofollow">McDonald’s</a> also announced an <a href="https://corporate.mcdonalds.com/corpmcd/en-us/our-stories/article/.mcopco-wage-raise.html?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">hourly wage increase</a> of 10% for its corporate workers, and it’s assumed the brand’s menu prices will do the same.As two of the largest brands in quick service restaurants take this path, many are expected to follow. Although the higher wages will likely attract more job candidates, the cost will need to be passed onto the customer, and it will likely <a href="https://www.qsrmagazine.com/employee-management/higher-wages-higher-menu-prices-realities-post-covid-restaurant-world?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">never come back down</a> again. It is still up for debate exactly how this will affect inflation rates and overall standard of living rates.In order to keep the costs at a manageable level, there are several <a href="https://www.fsrmagazine.com/expert-takes/journey-next-normal-labor-shortages-and-how-overcome-them?utm_source=1851franchise.com&utm_medium=article&utm_campaign=the-long-term-effects-of-the-restaurant-industrys-labor-shortage-we-arent-thinking-about-2716084" target="_blank" rel="nofollow">long term solutions</a> that will be established in the coming years. Menu simplification would allow restaurants to avoid any unnecessary complexities in ingredients and staffing. Smaller square footage with enhanced take out options would allow restaurants to keep output high without spending more on space and wait staff. And offering lifestyle benefits such as flexibility, healthcare and professional development in addition to or instead of a higher wage can provide workers with a more positive work culture.&nbsp;It’s unclear exactly where the industry will go in the future, but the air certainly seems to be changing to reach an equilibrium between restaurants and the people who run them.

The Long Term Effects of the Restaurant Industry's Labor Shortage We Aren't Thinking About

1851 Franchise

The benefits restaurants are offering to attract more job candidates will have a ripple effect that will change the industry permanently.

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HomeTeam Inspection Service

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HomeTeam Inspection Service Builds Strong Real Estate Agent Relationships, Boosting Franchise Owners’ Success

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Father-Son Team Brings HomeTeam to Northern Virginia to Increase Impact on Real Estate Community

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Urban Bird Hot Chicken

10 Reasons to Buy an Urban Bird Hot Chicken Franchise - 1851 Franchise

10 Reasons to Buy an Urban Bird Hot Chicken Franchise

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Caring Transitions

Meet Nan Hayes: The Industry Trailblazer Strengthening Caring Transitions’ Operational Leadership

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Griswold

Griswold Celebrates Record-Breaking Best of Home Care Recognition, Including No. 1 Ranked Provider Nationwide

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KKR Nears Deal for Nothing Bundt Cakes at $2 Billion

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Prince St. Pizza Partners With Dave’s Hot Chicken Franchisee for National Growth

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KKR to Acquire Nothing Bundt Cakes in $2 Billion Deal -  1851 Franchise

KKR to Acquire Nothing Bundt Cakes in $2 Billion Deal

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FTC Settlement Puts New Focus on Franchise Disclosure Standards - 1851 Franchise

FTC Settlement Puts New Focus on Franchise Disclosure Standards

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Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units - 1851 Franchise

Applebee’s Franchisee Files for Bankruptcy as Dine Brands Moves to Acquire 53 Units

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<a href="https://princestreetpizza.com/">Prince St. Pizza</a> has partnered with a&nbsp;<a href="https://1851franchise.com/franchise-deep-dive-daves-hot-chicken-franchise-costs-fees-profit-and-data-2723529">Dave’s Hot Chicken</a> franchisee to support its national expansion,&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">Pizza Marketplace recently reported</a>. The New York-based brand has joined forces with&nbsp;<a href="https://www.linkedin.com/in/lawrencekourie/">Lawrence Kourie</a>, founder and largest franchisee of Dave’s Hot Chicken, to grow its footprint across the country. Kourie’s experience opening and operating locations in multiple markets will help the brand as it enters new territories."Lawrence has built and operated one of the fastest-expanding restaurant concepts in the country, but what stands out is his disciplined approach to growth and brand integrity," said&nbsp;<a href="https://www.linkedin.com/in/lawrence-longo-342856/?skipRedirect=true">Lawrence Longo</a>, CEO of Prince St. Pizza. "He understands how to develop a concept without losing what made it special in the first place, which is critical as we enter this next phase."The expansion will use Kourie’s existing infrastructure and operations to introduce Prince St. Pizza into new markets. Each location will aim to reflect the same experience as the brand’s original Nolita shop."I have spent years evaluating restaurant concepts, and it is rare to find one that delivers both a strong product and a clear identity," Kourie said. "What Prince St. has built is difficult to truly replicate. The focus now is on growing the brand in a way that preserves that foundation while introducing it to new communities."Kourie is a key operator within the Dave’s Hot Chicken system,&nbsp;<a href="https://1851franchise.com/daves-hot-chicken-sold-to-roark-capital-in-1-billion-deal-to-fuel-global-expansion-2729557#stories">which Roark Capital acquired in a $1 billion deal in 2025</a>. The partnership connects Prince St. Pizza to an operator with experience scaling a brand that has attracted major private equity investment.Read the full article&nbsp;<a href="https://www.pizzamarketplace.com/news/prince-st-pizza-partners-with-daves-hot-chicken-franchisee-for-national-expansion/#:~:text=Prince%20St.%20Pizza%2C%20a%20New%20York%2Dbased%20pizzeria,the%20country%2C%20according%20to%20a%20press%20release.">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Prince St. Pizza is teaming up with a leading Dave’s Hot Chicken franchisee to expand nationwide, tapping proven operator experience to drive growth.

According to a&nbsp;<a href="https://www.businesswire.com/news/home/20260312305776/en/RF-Expands-Residential-and-Commercial-Services-Portfolio-with-Investment-in-Precision-Garage-Door-Service-Franchisee">recent release</a>,&nbsp;<a href="https://rf-partners.com/">RF Investment Partners</a>, a group focused on flexible capital solutions and value-add support to lower-middle-market businesses, has teamed up with&nbsp;<a href="https://www.burlingtoncp.us/">Burlington Capital Partners</a>, a group focused on family, founder and operator-owned lower-middle-market businesses, to acquire a prominent multi-territory&nbsp;<a href="https://franchise.neighborly.com/precision-door">Precision Garage Door Service</a> franchise.The investment marks the seventh platform for RF within the service space. Precision Garage Door Service, which is part of the larger&nbsp;<a href="https://www.neighborly.com/">Neighborly</a> ecosystem, specializes in the installation, maintenance and repair of garage doors.&nbsp;“We are proud to partner with management and the Burlington team to support continued growth by investing in people and operational excellence,”&nbsp;<a href="https://www.linkedin.com/in/peter-fidler-6787143">Peter Fidler</a>, managing partner and co-founder of RF Investment Partners, said in the release. “The sector continues to present compelling opportunities given the essential nature of garage door repair, and we look forward to building on Precision’s strong foundation to drive long-term value.”This deal is part of the broader trend toward institutionalized multi-unit and multi-territory operators. Previously, franchising was largely viewed as the place for “mom-and-pop” businesses. And while franchises remain small, local businesses, the aggressive entry of private equity firms focused on operators (franchisees) rather than the brand (franchisor) is bringing new energy to small business ownership.Read the full release&nbsp;<a href="https://www.businesswire.com/news/home/20260312305776/en/RF-Expands-Residential-and-Commercial-Services-Portfolio-with-Investment-in-Precision-Garage-Door-Service-Franchisee">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

Design with Precision Garage Door Service team members

The strategic investment marks the seventh residential services platform for RF and reflects a growing institutional desire for high-potential, operator-led franchises.

RF Investment Partners and Burlington Capital Join Forces to Acquire Top Precision Garage Door Franchise

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<a href="https://kbpbrands.com/">KBP Brands</a>, the multi-brand franchisee group with over 1,100 restaurants across 32 states,&nbsp;<a href="https://www.prnewswire.com/news-releases/kbp-brands-doubles-down-on-sonic-with-78-restaurant-acquisition-302695591.html">has announced</a> its acquisition of 78 additional SONIC units. The new units are spread across Ohio, Kentucky, North Carolina, Tennessee and Virginia.This is the second SONIC acquisition KBP has completed in less than two years, and it makes KBP the fourth-largest SONIC franchisee in the system with 164 total locations across eight states.“We’ve had a successful five-year partnership with Inspire Brands and have seen strong results from our initial SONIC purchase,” KBP CEO&nbsp;<a href="https://www.linkedin.com/in/mike-kulp-820820">Mike Kulp</a> said in a statement. “We look forward to expanding that with a larger footprint and additional operational efficiencies.”KBP is one of the country’s largest franchisee groups, reporting approximately $1.5 billion in annual sales across its portfolio, which includes KFC, Taco Bell and Arby’s, another Inspire Brands franchise."Our relationship with KBP Brands continues to grow due to their operational excellence and our shared commitment to guest satisfaction and a culture that champions innovation," said&nbsp;<a href="https://www.linkedin.com/in/john-kelly-b48426b">John Kelly</a>, brand president at SONIC. "KBP's expansion with SONIC demonstrates their dedication to our vision and the brand's long-term growth."Read the full press release&nbsp;<a href="https://www.prnewswire.com/news-releases/kbp-brands-doubles-down-on-sonic-with-78-restaurant-acquisition-302695591.html">here</a>.Want to learn more about how 1851 helps franchisees find the right franchise opportunity? Visit&nbsp;<a href="http://www.1851growthclub.com">www.1851growthclub.com</a> and start your journey.

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The franchisee group, which already operates over 1,100 units, is growing its portfolio with the quick-service brand, becoming one of SONIC’s largest franchisees.

KBP Brands Acquires 78 SONIC Locations Across Five States

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The&nbsp;<a href="https://www.franchise.org/">International Franchise Association</a> has released its annual&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">Franchising Economic Outlook</a> report for 2026, painting the picture for a positive year of growth after notable economic turbulence in 2025.“The resilience of franchising has enabled our model to adapt, endure and thrive in the face of challenging macroeconomic headwinds,”&nbsp;<a href="https://www.linkedin.com/in/matthewhaller">Matt Haller</a>, IFA president and CEO, said in a release. "After a year of recalibration, franchising is better positioned to navigate an improving economic environment than independent businesses due to tax certainty, lower interest rates and investments in AI that will propel brand growth, franchisee unit-level economics and wage growth for the franchise workforce."The report features key industry projections for the year, including:<ul><li>The addition of over 12,000 new franchised businesses</li><li>The addition of over 150,000 jobs — meaning the industry will represent nearly 8.9 million jobs</li><li>An increase in total franchise GDP from $549.9 to $558.4 billion</li><li>An increase in multi-unit ownership as current single-unit franchisees pursue scale</li></ul>In addition to the strength of the industry as a whole, the organization highlighted segment-specific trends.&nbsp;<ul><li>This year, child services and commercial and residential services are recognized as top performers, expected to achieve a 3.2% year-over-year growth rate.</li><li>A focus on experiential dining, rather than value alone, may drive full-service restaurants to outpace quick-service brands in output growth.</li><li>Preventive health care has risen to be the third-largest franchised industry, and it represents strong opportunities as consumer awareness surrounding preventive health care persists.</li></ul>In terms of growth markets, Texas continues to lead the country as the fastest-growing state for franchising, followed by Florida, Georgia, Arizona and North Carolina. Michigan, Ohio and Utah have joined the top 10 this year thanks to their relative affordability and the potential they offer for market leadership and long-term growth.The outlook for 2026 is upbeat, and the drivers behind it look different than they did a few years ago. More brands are putting AI and automation to work in day-to-day operations, which helps franchisees move faster on basics like scheduling and inventory and stay tighter on margins.The growth in multi-unit ownership points to a shift in how people are approaching franchising. More operators are treating it like a scalable investment, focused on building an asset, not just buying themselves a job.As the year ramps up, IFA’s data suggests growth in 2026 will be driven by those leveraging the scale of the franchise model, embracing a tech-forward approach to business ownership, and staying agile in an evolving business landscape.Find the full 2026 Franchising Economic Outlook report&nbsp;<a href="https://www.franchise.org/franchising-economic-outlook/">here</a>.

Highlighting child services and commercial and residential services as top performers, the organization predicts the industry will add over 150,000 jobs and increase its GDP by billions this year.

IFA Releases 2026 Franchising Economic Outlook Report, Predicting Over 12,000 New Franchised Businesses This Year

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How much can franchisees make? It’s a question many prospective owners ask before investing in a franchise. While earnings tend to be driven by variables such as industry, location and general management skills, a proper understanding of the key factors driving profitability can help franchise owners develop expectations that are realistic.&nbsp;Multi-unit franchisee&nbsp;<a href="https://www.linkedin.com/in/mangesh-patel-9368569/">Mangesh Patel</a>, who’s readying the launch of six&nbsp;<a href="https://www.beefobradysfranchise.com/">Beef ‘O’ Brady’s</a> restaurant locations in the Macon, Georgia area, shares insights from his franchising experience.<h2>Understanding Franchise Income</h2>Keeping operational costs in check can have a major impact on overall earnings. Taking a proactive approach to expenses such as food and labor, as well as payroll and scheduling, can help align actual franchise income with general expectations for the business.“I just had a meeting with a couple of people, and they said, ‘You talked about a 25% profit margin, but I’m only doing 12%.’ So, I looked at the figures they sent me,” Patel said. “Their&nbsp;<a href="https://1851franchise.com/calculate-restaurant-franchise-profit-2730476">restaurant</a> food cost was running at 37%, which should be around 30%. The national average is about 32%. If I do things correctly, my average food cost needs to be at or below 30%. And payroll should run around 18%. But many people run 25 to 28%.”So,&nbsp;<a href="https://1851franchise.com/unraveling-franchise-earnings-how-much-can-you-really-make-2723935">how much can franchisees make</a>? Here are five areas to consider.<h2>Practical Tips for Prospective Franchisees</h2><ol><li>Control Costs From Day One:&nbsp;It’s important to monitor payroll, food and supply costs closely. Overstaffing and inefficiencies can quickly reduce profits.</li><li>Plan For The Opening Surge:&nbsp;Traffic within the first few months of opening is likely to be higher. It’s important to adjust staffing and inventory accordingly, and pay close attention to how those levels change as time goes on.</li><li>Invest In Training:&nbsp;Properly trained workers can help reduce waste and improve overall service, which has a direct effect on net income.</li><li>Understand Your Market:&nbsp;Each market is unique and revenue potential will vary depending upon location, demographics and competition.</li><li>Track Metrics Regularly:&nbsp;Food cost percentages, labor ratios and weekly sales data act as key indicators operations may need to be adjusted.</li></ol><h2>What Profitability Really Comes Down To</h2>Patel notes that if franchise owners manage labor and costs properly, it’s not impossible to achieve strong cash flow even in the first year, bucking some franchising trends.So,&nbsp;<a href="https://1851franchise.com/how-much-can-you-make-as-a-franchise-owner-2724761">how much can franchisees make</a>? While results tend to vary, careful planning, disciplined operations and a proactive approach to assessing initial costs are essential. But by grasping and guiding the elements that drive franchise profitability, franchise owners can maximize overall business earnings, scaling a business that’s sustainable financially over the long term.Want to learn more about franchise opportunities on 1851 Franchise? Be sure to visit our&nbsp;<a href="https://1851franchise.com/power-rankings">Power Rankings</a> to read more on brands making moves.

How much can franchisees make? This guide explains what drives franchise earnings and how to manage costs, with expert tips from multi-unit owner Mangesh Patel on maximizing your franchise income.

How Much Can Franchisees Make? A Guide for Prospective Franchise Owners

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Beef 'O' Brady's Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Beef ‘O’ Brady’s is a family sports pub concept built around community, casual dining and lifelong local loyalty.

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Franchise Opportunity Deep Dive: A purpose-driven swim instruction and aquatics management franchise offering at-home, indoor and community-based swim programs.

urSwim Franchise Costs, Fees, Profit and Data for 2026

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Amada Senior Care Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Amada Senior Care is a non-medical home care, assisted living placement, and related senior-support services with multiple revenue streams.

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Visiting Angels Franchise Costs, Fees, Profit and Data for 2026

Franchise Opportunity Deep Dive: Visiting Angels is a senior home care franchise focused on in-home support for seniors and individuals with disabilities.

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Franchise Opportunity Deep Dive: A fast-casual restaurant brand serving made-from-scratch sandwiches, salads, soups and pizzas rooted in Southern hospitality.


The Long Term Effects of the Restaurant Industry's Labor Shortage We Aren't Thinking About

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